AUTHORS' DAMAGES (original) (raw)
THE REMEDY, Appendix 2: AUTHORS' ENTITLEMENTS TO DAMAGES, by Andrew Malcolm, 1997
The fact that the current edition of McGregor (aka McMouse) on Damages (Sweet & Maxwell, £195) omits any mention whatever of Malcolm vs the Chancellor, Masters and Scholars of the University of Oxford [1990] begs further examination of the case's implications for damages law, implications which can perhaps best be regarded as an appendix to my earlier implication 5 (see The Remedy, page 146). Without contention I was held to be eligible for damages under two heads, the loss of opportunity to enhance my reputation (publicity) (1), and my loss of income from Making Names' royalties (2). I will examine these in reverse order.
Lost Royalties
The starting point is our old friend Abrahams and another vs Herbert Reiach Ltd. 1921 1 K.B. 477. Here the publisher, remember, had published Abrahams' athletics training articles, as contracted, in a magazine on fixed terms, but had then failed to publish them, as contracted, together as a book which was to have yielded the authors an agreed royalty of 4d [4 pence] per copy sold. The authors successfully sued for breach of contract and in a lower court before Sankey J they were awarded damages of £500 calculated on an imagined sale of 30,000 copies. The publisher appealed that this award was excessive. No reason is stated in the report why the publisher reneged on the agreement, and the easy assumption that it resulted from the publisher's reduced estimation of the book's likely sales may not be correct.
In the Court of Appeal Mr Jowitt, counsel for the publisher, invoked the well-established principle that in the case of a contract which affords the breaching party alternative obligations, a court cannot award damages greater than the least onerous, and argued that within the contract's terms the publisher was not obliged to publish more than one edition [copy] of the book. The court did not accept this, but sought instead to determine what in all the circumstances would have constituted "a reasonable publication", making no apparent distinction between the number of copies that would probably initially have been printed and the number that would probably have been sold. No reasoned estimate was made of the publisher's likely first print-run or of the book's likely eventual sales. It is mentioned, however, that the publication was to have coincided with the 1920 Olympic Games in Antwerp, suggesting that it was perhaps regarded by both parties as a one-off venture, with only a single "reasonable" printing being envisaged. Also, Bankes LJ invokes the principle in Reade vs Bentley (1857) 3 K&J 271 that a publisher who has agreed to publish a work must publish it, but is not bound to continue publishing it.
In Malcolm, by contrast, things are moved on quite a way. Here Reade vs Bentley is eschewed and it is accepted that a reasoned estimation was to be made of how many copies of the book would actually have been sold in different editions over a period of time. I sought the period of five years because (a) books usually sell best during their first few years, and (b) this was roughly the time that had elapsed between the original planned publication date and the damages assessment; I assumed, perhaps wrongly, that if I were to seek a longer period, McGregor would successfully be able to argue that I had by then become free to take the book elsewhere. In any event McGregor agreed without argument to my five-year suggestion.
It was agreed too on all hands - by myself, by the Court in the person of Chancery Master Barratt and generally speaking by Oxford - that the only way to arrive at such an estimation was to relate Making Names' imagined prospects to the actual sales of arguably comparable books. I say "generally speaking" because although Oxford in its pleadings did present various books' sales figures, from time to time McGregor also reverted to Mr Jowitt's initial line in Abrahams, that Making Names would nevertheless have sold zero copies, thereby perversely assessing his own clients' book evaluators and sales personnel as totally incompetent and their much-coveted imprimatur as worthless (all arguable, I suppose).
McGregor further muddied the waters by repeatedly insisting that the more appropriate precedent was Chaplin vs Hicks 1911 2 K.B. 786, an important case on the subject of damages that can be awarded for the loss of a chance. Ms Chaplin, an actress, had entered a national beauty competition organized by a theatrical manager for a London newspaper which offered substantial financial rewards to the winners. She had succeeded in reaching the final fifty selected from a national entry of about 6,000, and numerically she stood a one-in-four chance of winning a prize in the final round, but was then denied the opportunity of competing in it by the organizer's inadequate notification. She sued successfully for breach of contract and a jury awarded her damages of £100, against which the organizer appealed on the grounds that the damages were too remote and were inassessible. Their lordships embarked on some learned analyses of remoteness and inassessibility, but unanimously concluded that both the lower court's judgment on the organizer's liability and the jury's assessment of £100 should stand.
I suggested to Master Barratt, successfully I think, that McGregor's introduction of Chaplin was entirely inappropriate, for he thereby seemed to suggesting that books' sales were a matter of pure luck, and nothing whatever to do with their content - another strange position for a guardian of OUP's reputation to be adopting. If there was any analogy, I added, Oxford's nine months of refereeing Making Names by its three expert judges was my beauty contest, with their agreement to publish it being my first prize. Surely Oxford, I asked, do not choose which of four scripts to publish by tossing them in the air and seeing, say, which one lands the most prettily? If OUP had published my book, there was no chance, whatever McGregor said, of it selling zero copies, and Hardy's PPF had predicted that OUP's short initial print-run of 2,000 hardbacks would sell out.
For a court to predict with any certainty what would have happened beyond that was, as said in Master Barratt's findings, very difficult:
"Assessing damages for loss of royalties resulting from the non-publication of a book is a highly speculative exercise. By comparison with other books of similar type, it is not too difficult to ascertain the likely range of publication price for hardback and paperback copies during specific years. Even the royalty percentage that could have been expected by the author must fall within certain clear limits. Evidence given at the hearing by experts in publishing and others enables some accuracy to be achieved on both these elements of the calculation. But what is bound to remain a guess, however carefully considered, is the number of copies that would have been sold, whether in hardback or paperback...
Although publishers are experts in their own field, they, like all experts, are not necessarily infallible. Stephen Hawking's A Brief History of Time had a similar record of rejection before eventual publication as a best-seller, running into many editions, with sales of millions of copies throughout the world. The Plaintiff, in his letters to some of the publishers to whom he submitted the idea or the typescript of Making Names referred to it as "an unusual and risky project" and in one letter he even accepted "the book's apparent unmarketability" and said "It certainly does not fall into any of the presently established publishing categories" It just might have been a gamble that was destined to succeed, like Stephen Hawking's book, but the weight of expert opinion from people whose job it is to assess the marketability of books, would make an assessment of damages on such an assumption totally unrealistic."
But although Barratt talks of the book's publication being "a gamble" and his estimate of its sales as "a guess", the figures he then proposes are not the products of pure luck but are reasoned and justified. Barratt himself asked to hear not only from experts who could testify as to royalty rates and suchlike, but also from authorities who had read the book. While there are doubtless many cases in the annals in which courts have given reasoned determinations of uncertain damages, I cannot imagine that there has ever previously been such a detailed attempt to assess a work of art or literature's likely financial earnings. If so, Malcolm sets an important precedent, if only by demonstrating that such an enterprise is practicable, and it may well have provided a useful model upon which future similar claims can be based. (Or it may, on the other hand, have better demonstrated that specific performance would have been a more practicable remedy.)
It has long been established in law that the fact that the wronged party's losses in a breach of contract may be indeterminate does not render them inassessible. This ground is well covered in Chaplin, and in 1911 there was already a wealth of precedent on the principles held to be relevant. One such principle that is universally recognized is that any damages should reflect, if possible, the potential rewards that were in the contemplation of the parties at the time the contract was formed. This may not always be very easy for a court to gauge, but fortunately, I was blessed with much evidence of Oxford's high expectations in 1985 for Making Names . Not only did I have Alan Ryan's (two) and Galen Strawson's favourable reports of 11th February and 18th and 14th July, with the former's mentions of the bestsellers The Outsider by Colin Wilson and Gödel, Escher, Bach by Douglas Hofstadter, I also had all the enthusiastic written and recorded remarks of Henry Hardy, the OUP editor who was going to be responsible for the book's publication. He had written that he hoped it would be "a terrific success", confided that he had planned to launch it simultaneously in hardback and paperback - a most unusual vote of confidence - and had even spoken of its potential for adaptation as a 'tele-script'.
Here, I was less successful with Master Barratt, who in his findings quoted not a single line from Oxford's original evaluations, but preferred to rely instead upon Alan Ryan's, five-copyless-but-dispassionate-years-later judgment that "Making Names would have sunk without trace". Barratt even quoted the views of Kim Pickin, Giles Clarke and Colin Mitchell, despite the fact that none had ever opened the book. Besides Barratt's purely mathematical mistakes - his low royalty rates and so forth, his failure to place any weight upon Oxford's original contemplations would have been a major line of argument for me at the aborted damages appeal. I, of course, would never have gone ahead and spent nine months revising a book for a publisher who believed that it was destined to sink without trace.
Loss of Reputation or Publicity
In the new edition of his great textbook, McGregor writes at paragraph 55(b) [I use his numbering for the asterisked case-references]:
Loss of future reputation, of publicity, of credit.
Loss of reputation generally makes for a non-pecuniary loss but it may also involve a pecuniary one for which damages may be awarded in contract. As Hallett J. said in Foaminol Laboratories v British Artid Plastics [1941] 2 All E.R. 393 at 399-400,
"A claim for mere loss of reputation is the proper subject of an action for defamation, and cannot ordinarily be sustained by means of any other form of action... [but] if pecuniary loss can be established, the mere fact that the pecuniary loss is brought about by the loss of reputation caused by a breach of contract is not sufficient to preclude the plaintiffs from recovering in respect of that pecuniary loss."
It is thus established that a plaintiff can recover for such a pecuniary loss in three particular types of case: (1) where the wrongful dismissal of an actor*75 causes him loss of future publicity*76; (2) where there has been a failure or a mismanagement of the advertising of the plaintiff's business; and (3) where the defendant fails to honour the plaintiff's drafts thereby causing him loss of credit, or otherwise fails in breach of contract to sustain the plaintiff's financial credit. This head of damage may also be recoverable in other types of case,*80 but that these are likely to be few is suggested by the fact that in the three established types of case the loss was particularly contemplated by the parties to the contract.
The type of case of interest here is clearly (1), and McGregor explores this later at paragraph 1243:
There is, however, one clear exceptional case in which damages for loss of reputation, or, as is more often put, loss of publicity, is recoverable by the plaintiff; this is where the enhancement of the plaintiff's reputation by publicity was particularly contemplated by the contract, so that it might be regarded here as a head of damage contemplated by the parties themselves when entering into the contract. This was first established with regard to actors in Marbé v. George Edwardes 1927 1 K.B. 269, which case was tested and confirmed by the House of Lords in Clayton v. Oliver [1930] A.C. 209. The main point decided in these two cases was that such a contract imposed on the defendant an obligation to allow the plaintiff to appear before the public as an actor, and not a great deal was said about damages, except that Lord Buckmaster in Clayton v. Oliver said that he thought that "loss of reputation" was not the exact expression but "loss of publicity" should be used. More assistance is given in the later case of Withers v. General Theatre Corporation [1933] 2 K.B. 536, C.A. where, the anterior point of liability being by then settled, concentration fell on the question of the basis of the assessment of the damages. The position was put most clearly by Greer L.J.
"When a proprietor of a music-hall or theatre engages an artiste to perform, he is promising two things: he is giving a consideration which consists of two different elements: first, a salary which he promises the artiste for his services, and secondly, the opportunity to play in public some part which will attract attention... For the loss of the opportunity... and so enhancing or maintaining his reputation, he is also entitled to recover damages".
It was, however, held by the Court of Appeal that no damages were recoverable where the plaintiff's only loss was injury to his already existing reputation as an actor. Yet it is submitted that this limitation should be discarded if there eventually prevailed what is thought to be the proper interpretation of Addis v. Gramophone Co.*21
This head of damage for loss of publicity was extended from actors to authors, or at least to an author of a screenplay entitled to a screen credit, in Tolnay and another v. Criterion Films [1936]*22 Goddard J. pointed out that "all persons who have to make a living by attracting the public to their works, be they... painters or... literary men... or... pianists and musicians, must live by getting known to the public". He thought that the loss of publicity to an actor, whose worth the public can only estimate by seeing him perform, is more serious than in the case of the author... The approach of the Court of Appeal suggests that damages for loss of publicity are germane only to theatrical or closely analogous contracts; Greer L.J. thought that very special considerations apply to theatrical contracts since the consideration to the artist, certainly to the artist in the early stages of his career, is as much, if not more, the opportunity to appear as it is the mere wages.
Here, of course, one may wish to protest, on behalf of authors of written works, that publicity or reputation is as important to them, and as important a part of their contracts whether specified or not, as it is for actors like Marbe, Oliver and Withers, especially when they are unknown. Writers' contracts, after all, are entered into with publishers, and with a solo literary work, unlike a complex joint venture like a film, there is no question as to who is to be identified as its creator. In Tolnay, it should be mentioned, two screenplay writers were contracted to adapt a novel and their agreement expressly stated that they were to be credited on screen as the film's joint authors; they were awarded substantial damages assessed as £100 each for their loss of publicity. Amongst Goddard J.'s concluding remarks edited out by McGregor are these:
"An unknown author, we all know, has a great struggle in the same way as an unknown musician or actor has a great struggle... One way in which they can expect remuneration and expect employment is by getting their name before the public."
Strangely, McGregor does not mention in his book another case which further extended the scope of this type of recoverable damages and which he himself invoked in court in my assessment hearing, Joseph v. National Magazine Co. Ltd. [1959] 1 Ch. 14. In summary, Joseph, an expert on jade carvings, was in 1956 contracted to write an illustrated article for the prestigious Connoisseur antiques magazine, but found his work so heavily rewritten by the magazine that he disowned the piece it intended to print and sued for the publication of his own version. In lieu of specific performance, Harman J. awarded him £200 for the loss of his opportunity to enhance his reputation as an expert on jade.
In my own case, Gavin Lightman makes this powerful statement in his Chancery Court judgment:
"I cannot think that any order for specific performance [OUP's enforced publication of Making Names ] in this case would be practicable. I would, however, have been minded to indicate that a substantial award of damages was called for to recompense Mr Malcolm for loss of the opportunity for him to enhance his reputation by securing the imprimatur of the Oxford University Press on his work."
While, in his findings, upon which I should not comment, Master Barratt writes:
2. Loss of opportunity to benefit reputation
The other head of damages which can be awarded in this action is for loss of opportunity for the Plaintiff to establish or enhance his reputation. Making Names would have been the Plaintiff's first published book. If it had borne the imprimatur of O.U.P. it would have been launched under the most favourable circumstances possible for a work of philosophy intended for both academic and general readers. The benefit to be derived from the O.U.P.'s imprimatur could have been counteracted by adverse reviews and it is clear that O.U.P. has chosen to incur considerable expense and trouble to withhold its imprimatur from Making Names and to avoid any responsibility for the book. The conclusion to be drawn from the reluctance of so many publishers to accept this book is that they did not consider it to be of outstanding quality.
Even if Making Names had been published by O.U.P. and had achieved sales comparable to those of Colin Wilson's The Outsider, it could well have brought the Plaintiff no greater future benefits than had been achieved for Colin Wilson. However, if the Plaintiff's first book had been published by O.U.P. and had achieved even modest success, the text of his second book would have been considered more favourably than is now likely. Even the prospect of academic employment might have been improved for him. Such benefits, dependent as they would be on a favourable reception for his book, would be spread over many years and would only arise if the Plaintiff's subsequent endeavours provided suitable circumstances.
Guidance from reported cases as to the scale of compensation appropriate to such loss of opportunity to enhance an author's reputation is rare. The amounts awarded in the Tolnay case in 1936 and the Joseph case in 1958 are both equivalent to only about £2,000 in present money. Any figure selected can be no more than a guess. However, on the basis of two other assumptions, namely that 15,000 copies of the book would have been sold and that its reception would have been reasonably favourable, the damages for loss of beneficial publicity are assessed at £6,000.
It therefore at the very least seems clear that Malcolm has extended the scope of such 'lost publicity' awards markedly further, firstly by now including a purely literary work, a text, and to boot a philosophical text, and secondly with respect to the £6,000 awarded, three times the inflation-adjusted equivalents of the Tolnay and Joseph awards of £100 and £200 sought at my hearing by McGregor.
Why then does McGregor not mention Malcolm (or even Joseph) in the new edition of his great textbook? Authors and lawyers advising authors could easily get the impression from it that damages for loss of publicity are rarely if ever recoverable in law and that at best they can only be modest, when in fact it now seems perfectly certain that they are recoverable in reasonable measure, especially by first-timers. Even the comparatively slim textbook Treitel now mentions Malcolm and paints a different, rather more straightforward picture:
"An actor or author can recover damages for 'loss of publicity', that is for loss of the chance to enhance his reputation." (my italics)
McGregor might, I suppose, try to claim that neither the Joseph nor the Malcolm award was argued at sufficiently senior level (he says, remember, that "the approach_of the Court of Appeal_ suggests that damages for loss of publicity are germane only to theatrical or closely analogous contracts"), but he himself never disputed my entitlement to recover damages under this head, and Oxford's pleadings, which he drafted, expressly concede the point.
In a recent interview for The Times (20/1/98), after a cabaret rendering of Noel Coward's frightfully witty song A Bar on the Piccola Marina, McGregor assures us of "his logical mind and very good memory", and certainly it cannot be that the great man has allowed his distasteful experiences of 10th and 11th July 1991 to cloud his judgment and thereby mislead his £195-a-go clientele. He, like Treitel, notes that damages are not yet held to be recoverable for injury to an (actor's or author's) existing reputation, so where, I wonder, does this mysterious omission leave his own?
*Case References
75 And similar persons, such as the author of a screenplay: Tolnay v. Criterion Films [1936] 2 All E.R. 1625. So too a dismissed apprentice can recover for his loss of training: Dunk v. George Waller & Son [1970] 2 Q.B.163, C.A.
76 Marbe v. George Edwardes [1928] 1 K.B. 269, C.A.; approved and applied in Clayton v. Oliver [1930] A.C. 209.
80 See, e.g. Anglo-Continental Holidays v. Typaldos [1967] 2 Lloyd's Rep. 61, C.A., where travel agents were awarded damages for loss of goodwill when the shipowners with whom they had arranged a cruise substituted a smaller and less attractive ship with a less attractive timetable of stopovers at ports en route; and Barrow v Chappell & Co. [1976] R.P.C. 355, where the award in respect of the defendant's delay in publishing a musical work composed by the plaintiff may be attributable to this head of damage...
21 [1909] A.C. 488. The submission in the text is, since its completion, now justified by the House of Lords' overruling of Withers in Malik v. BCCI [1997] 3 All E.R. 1, H.L.
22 [1936] 2 All E.R. 1625. Similarly in Ackland v. World Screenplays, The Times February 23, 1950.
For a subsequent author's case with important damages implications, proceed to Myers v. Macmillan, QBD, 1998.
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