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Oxford University Comparative Law Forum

Privacy, Publicity and Restitution of Wrongful Gains: Another New Economy?

by Peter Schlechtriem1

(2001) Oxford U Comparative L Forum 3 at ouclf.iuscomp.org | How to cite this article

Table of content

Preliminary remarks

Art. 8 of Schedule I to the Human Rights Act 1998 protects privacy, and it has been predicted that this will spawn an abundance of new actions and claims. The following is some speculation on the basis of continental experiences as to what the law of restitution and unjust enrichment may contribute to this coming legal wealth.

When in 1931 the amateur golfer Mr. Tolley was depicted in an advertisement by the defendant chocolate manufacturers with a packet of their chocolate protruding from his pocket, he could claim compensation, but only on the ground that this was defamatory because of the innuendo that he, an amateur, was willing to compromise his amateur status for advertising money.2 I submit that nowadays he could and should argue that although he would never have sold his fame to anyone, if it was exploited without his authorization, he should be able to claim the value of this use, i.e. what he would have obtained if he had forgone his high principles and sold himself to the highest bidder.3

Mr Tolley would have faced some problems under German law as well. Although the right to claim in restitution in case of wrongful invasion of someone's right of personality, of which privacy is but an important part, is established beyond doubt, this had not always been the case. First, the right of personality had to be invented after the Second World War by the civil law courts and to be confirmed by the Federal Constitutional Court, a right which was strongly based on the bill of rights part of the German constitution protecting the dignity and integrity of the individual.4 At first this right was used only as a basis for injunctions to suppress untrue and damaging press coverage, or to force the respective media - then mostly newspapers - to publish a correction or revocation.5 That would not have helped the German equivalent to Mr. Tolley. He came along as a gentleman horseback rider, whose photograph was taken clandestinely and used in advertising for a viagra-like drug of the sixties, much to his discomfort. Revocation would only have made matters worse. So the courts granted him damages for pain and suffering as allowed in cases of harm to body or liberty under § 847 of the German Civil Code, a doctrinal crutch which was later abandoned.6 In the meantime, however, a then famous actor had already taken the direct route of unjust enrichment law, when his picture was used without his authorization to advertise Vespa motor scooters, claiming that he licensed the right to use his picture as part of his general right of personality only in exchange for money, and that this business opportunity was taken wrongfully from him, for which he should be recompensed under the law of unjust enrichment.7 He and others after him succeeded. So did my daughter when she was 14 year old. One day, she and a classmate were riding their ponies when a man approached the two girls and asked them whether he could take pictures of them. The girls were thrilled. Some time later, someone showed my daughter a teenager magazine, with a wild story about two girls on ponies, lost in a swamp, who had been rescued by the reporter of the said magazine. Four pages of photographs depicted my daughter. It was a nice story, not in the least defamatory. And the pictures were friendly, too. But they were published without permission, to be precise: without my permission as a father. My daughter was not too enthusiastic when I told her that I intended to do something about this, but she became more sympathetic when I mentioned that she could gain some money in the process. I investigaged with someone who had knowlede of the media market and asked him about the tariffs for buying pictures. I was informed that they would depend on the photographs, their size and, most importantly, the circulation of the paper in question. My source figured that a sum in the region of DM 1000 would be the market price in the case of this teenager magazine and its rather limited circulation. I called the chief editor, introduced myself and my profession, and asked for an explanation. He said that he would investigate the matter, talk to his lawyers, and contact me again. Three days later he called back, apologized and explained that it was all the reporter's fault. I accepted his apology and asked for more. He said: "How much do you have in mind?" I brazed myself like a poker player and boldly asked for DM 3000. He answered: "Would you accept a cheque?" I said "Yes", and felt like a fool for not having asked for more. As it went the money was all spent on clothes at any rate.

The conclusion is that privacy, the right of a person to be let alone, can have a market value. This value belongs to the person, and not to the media or the public. If someone converts this right to his own use and benefit without permission of the owner, he has to surrender the proceeds, just as in the case of conversion of a chattel.

I. Some comparative observations

How would Mr. Tolley fare today in some European countries? I will begin with Germany:

1. Although recognized as a protected right since the 1950ies, the right of personality and its main part, i.e. the right of privacy, will not always trigger unjust enrichment claims in case this right is violated. This is obvious where the invasion of privacy does not yield any economic enrichment, as in the case of a Peeping Tom. He may be subjected to an injunction, or held liable in a tort action for non-economic loss, i.e. for damages with a punitive element, but not in an unjust enrichment action. But even where and invasion of privacy had clearly a monetary motive on the side of the defendant, a Mr. Tolley as German plaintiff would be on the safe side only when suing in tort, because for unjust enrichment claims the German Federal Court of Justice has for long insisted on an additional requirement, which was absent in Mr. Tolley's case, namely that he was willing to sell his right and his reputation for money. Since the actor in the Vespa advertising case had frequently licensed the use of his picture for advertising, he met this requirement. Others failed because they never had, and never would have, allowed their picture - or their name, their likeness, their voice, their life history, all these being parts of the comprehensive right of personality - being used for advertisement or other commercial exploitation. However, a new decision seems to indicate a turn, since this decision emphasizes the economic dimension of the right of privacy by recognizing that this right can be inherited and exploited by successors. In this case, the daughter of Marlene Dietrich was allowed to sue a firm which had used the image of her mother for a musical, and which had also merchandised the musical's name "Marlene" together with pictures and the signature of Marlene Dietrich.8

The economic gains of the wrongdoer could, however, be equally skimmed off by tort claims if these gains were taken into account when assessing the damages. This is what the German Federal Court of Justice did in the famous Caroline of Monaco case, which has been frequently mentioned and analysed in English law publications.9 The lower courts had granted a modest sum for violation of the princess' right of privacy. The Federal Court of Justice reversed the Court of Appeal's decision and advised the lower court expressly to take into account the gains made by the publisher, who had printed a purely invented interview with the princess, when measuring the damages for non-economic loss, not the least in order to prevent this kind of prying and interfering with people's private lives. Most academic writers who have commented on this case have pointed out that damages which are not based on any loss suffered by the injured person but rather on the gain of the wrongdoer are just a claim for surrender of an unjust enrichment in disguise.10

2. The escape route to skim off wrongfully gained benefits by tort claims must ring a familiar note in English ears, as in 1972 exemplary damages were labelled in England as a "blunt instrument to prevent unjust enrichment by unlawful acts.11 The same approach is even more popular in other jurisdictions, in particular in France. There, the protection of la vie privée - as of one's name and pictures - is well established in the law of torts. But the gain of the wrongdoer is influential in the assessment of damages, which belongs to the discretionary power of the judge of first instance and, therefore, is rarely controlled by higher courts. In one case, the defendant had marketed perfume under the name of "Rothschild" and was sued by the American branch of the Rothschild family.12 The court of first instance had granted one symbolic franc as damages, while the court of appeal awarded damages to the amount of the proceeds from the sale of the said perfume. The singer Petula Clark received damages for the unauthorized use of her image in a newspaper approximating the price she used to obtain when she sold her pictures.13 The actor Jean-Paul Belmondo, whose picture was used to advertise clothing, was granted damages taking into account the usual royalty he charged for the use of his image.14 A model whose picture was used for a record cover without her permission was granted a share in the exceptionally rich proceeds from the exploitation of her picture.15 Caroline of Monaco has also inspired French courts.16 A paper had published pictures showing her with her lover in a rather private situation. The court of first instance granted her 80 000 Francs, but only one symbolic franc to her lover. The paper appealed, claiming that the princess had not suffered any economic loss. The Court de Cassation upheld the decision of the first instance, leaving it to the discretion of the judge of first instance to determine the damages in case of an intentional invasion of the right of privacy. It comes as no surprise tha that in France as well, academic writers argue that the right of privacy should be treated as a property right granting its owner the exclusive right of exploitation, a right which should be protected as is property in chattels.17And since an unjust enrichment claim in case of conversion or other unauthorized use of chattels is just one of many protecting remedies, it is but a small step to qualify the disgorgement of the proceeds of an unlawful infringement of the right of privacy as a claim founded in unjust enrichment.

II. Counter-arguments

1. The Human Rights Act 1998 not only protects the right of privacy but also - in Schedule I Art. 10 - the freedom of expression. A clash between these two rights seems to be inevitable, because every newspaper or television station charged with a violation of the right of privacy will claim immunity under the freedom of expression guaranty. The conflict is familiar to German jurists, because many cases of alleged violations of the right of personality involve the defence of freedom of the press to inform the public, or of freedom of the arts to use persons as objects of artistic creations, in other words the defence that publishers, reporters and artists simply publish their findings, pictures etc. on the basis and within the limits of the human right of freedom of expression. In particular, where pictures of so-called public figures, i.e. persons who are exposed to the limelight of public interest because of their standing as politicians, star artists and sportsmen, members of the high society of nobility and business high-rollers etc., were published, the defence could be raised that these persons were public figures and therefore formed part of a public domain. German copyright law even contains an exception from the consequences of unauthorized use of pictures in case of such figures of "contemporary history", as they are called by the statute.18 The German courts and in particular the Federal Constitutional Court have continuously attempted to strike a balance between the legitimate interest of the public to be informed - this interest being the main basis for the protection of the freedom of the media - on the one hand, and the equally legitimate interest of public figures to secure at least a core of privacy on the other.19 As decisions such as those in the case of Caroline of Monaco and her children show,20 the results are sometimes very finely spun, because the outcome of a litigation may depend on whether the princess moved within a public space, visible with unarmed eyes by any curious spectator, or in a more or less secluded area such as a private swimming pool, or the backroom of a fashionable restaurant. False statements are not covered by freedom of expression, unless they are clearly recognizable as being without substance,21 nor are defamatory or insulting language to express a value judgement protected.

This problem, e.g. the necessity of balancing conflicting rights, which will certainly come up as a clash between Art. 8 and 10 of Schedule I to the Human Rights Act, is, however, not one of unjust enrichment claims alone, but concerns any remedy granted or proposed to protect the right of privacy, such as an injunction to stop certain publications, or a damage claim for an asserted violation of this right. I would even dare the provocation of suggesting that unjust enrichment claims in these cases may somewhat facilitate the balancing and finding a solution. Let us assume that there are rumours that a member of the political establishment is consorting with figures of dubious reputation; Christine Keeler's recently published biography,22 or Jeffrey Archer's woes may serve as a model. In this situation, the public has a legitimate interest in knowing all about these rumours, which extends to seeing pictures which prove the allegations or accusations made by a newspaper. But why should the use of these pictures be free? This resembles claiming my land for the construction of a motorway - the public represented by the state may have the right to confiscate my land as public domain, but not without compensation. If and in so far as Caroline of Monaco has to put up with pictures of herself in various tabloids, why should she not be entitled to the same compensation which she would have obtained had she sold these pictures? We are concerned with the freedom of expression, but not with freedom from having to pay for the material used for this expression. And where the infringement of the right of privacy is not in conflict with the freedom of press, such as in cases of unauthorized use of pictures or of a name for advertising or marketing of products, it is obvious that the right of privacy cannot be regarded as a kind of common property which is free to be exploited like the air by anyone who intends to make a profit by its use.

2. There are other counter-arguments to my thesis. A right to be compensated under unjust enrichment principles for the exploitation of the right of privacy tends to favour the rich and famous, because their publicity increases the value of their right of privacy considerably in comparison to ordinary people such as this author and most of his readers. Tony Weir has phrased this concern acidly in the following words: "...to give a right of privacy whichcan be vindicated only publicly will benefit maily publicity-seekers ... who are indignant that vulgar exposure by others has prevented their making a profit by vulgar self-exposure".23 That is true, but letting aside the vulgarity aspect, which does not really add to the issue,24 the circumstance that some people are better of than others, i.e. that some people have more valuable assets than others and therefore get higher compensation for an unauthorized conversion or use of their assets than others, is a fact of life. The law of privacy in general and the law of unjust enrichment in particular are not tools of social engineering to be used to soften inequalities in wealth and sources of wealth such as fame.

3. Tolley, as mentioned before, would not have succeeded in the German Federal Court of Justice with an unjust enrichment claim based on exploitation of his image, because he himself had never and would have never marketed his image himself. It is only - thus goes the argument of Germany's highest court in civil matters25 - if the owner of the right of privacy had himself already marketed his right of privacy , or if he at least was willing to do so, that he could he claim compensation for its unauthorized use. This requirement is an unnecessary, and self-imposed obstacle. If we place the economic value of the right of privacy on the same footing with the economic value of, say, a chattel, it becomes clear that this economic value, which belongs exclusively to the owner, is independent of the owner's intention to exploit this value on the market. If I own a portrait of one of my ancestors, an heirloom which I would never sell, and someone converts it, I surely can claim the proceeds of this conversion. Why should it make any difference if it is my picture that someone converts into money, which I myself would never have done?

To summarize, unjust enrichment claims seem to me to be an almost ideal legal instrument not only to protect the right of privacy, but also to cope with the necessary weighing and balancing of counter-rights such as the right of freedom of expression. If one has to surrender the profits from the unauthorized use of pictures, even if their publication may be qualified as a protected expression, the incentives for the more outrageous examples of prying and spying into other people's lives might be somewhat reduced.

Endnotes

1 Dr.iur. Dr.h.c. Prof. em. University of Freiburg, Germany. This paper is based on a lecture given at the University of Oxford on February 23, 2001. The author wishes to express his deeply felt gratitude for the invitation to hold the Heather Grierson Visiting Professorship in European and Comparative Law during the academic year 2000-2001, which allowed him to lecture and conduct research in Oxford during Hilary Term 2001.

2 Tolley v J.S. Fry and Sons, Ltd., [1931] AC 333.

3 But see House of Commons Library Research Paper 98/25 of 13.02.1998.

4 The leading case is BGH 25.5.1954, BGHZ 13, 334 (Schacht), reproduced in translated form in Lawson/Markesinis, Tortions Liability for Unintentional Harm in the Common Law and the Civil Code, vol. II (1982), pp. 105-110; also in Markesinis, The German Law of Obligations, vol. II (Torts), 3. ed. 1997, p. 376 et passim.

5 The development is analyzed and illuminated by Markesinis, The Right to Be Let Alone Versus Freedom of Speech, in: Foreign Law & Comparative Methology, Oxford 1997, pp. 382-397; see also Stoll, The General Right to Personality in German Law: An Outline of its Development and Present Singificance, in: Markesinis (ed.), Protecting Privacy, Oxford 1999, pp. 29-47.

6 BGH 14.2.1957, BGHZ 26, 349 (English translation in Markesinis, The German Law of Obligations, vol. II, pp. 380 et seq.

7 BGH 8.5.1956, BGHZ 20, 345.

8 BGH 1.12.1999, BGHZ 142, 214.

9 BGH 15.11.1994, BGHZ 128, 1; see Schlechtriem, in: Markesinis, Protecting Privacy, Oxford 1999, pp. 131 et seq.

10 See Seitz, NJW 1996, pp. 2848-2850; Canaris, Gewinnabschöpfung bei Verletzung des allgemeinen Persönlichkeitsrechts, in: Festschrift Deutsch, 1999, pp. 85-109 at 88 for a classical example for the analysis of unjust enrichment claims in these cases.

11 Cassell & Co. Ltd. v Broome [1972] AC 1027, 1130 (Lord Diplock).

12 Trib.gr.inst. Paris 4.July 1984, D.S. 1985. J. 293; Cour d'Appel Paris 10. July 1986, J.C.P. 1986.II.20721 (note Agostini).

13 Cour d'Appel Paris 1.Dec. 1965, J.C.P. 1966. II.14711 (note Lindon).

14 Cour d'Appel Paris 13. Feb. 1971, J.C.P. 1971.II.16774.

15 Cour d'Appel Paris 19. Sep.1985, D. 1986 IR 189.

16 Civ.1re 5. Nov. 1996, D. 1997, 403 (note Laulom).

17 Saint-Panu, D. 1999, pp. 541 et seq., 543.

18 § 23 Kunsturhebergesetz (Law Concerning Copyright on Works of Art and Photography) of 9.1.1907.

19 See Markesinis, The Right to be Let Alone (supra note 5); the latest "balancing"decision of the Federal Constitutional Court (BVerfG 9.10.2000, NJW-RR 2001, 411) dealt with a (false) statement by the defendant that the plaintiff, a CEO of a company, had defrauded the company. The court emphasized that "the result of the balancing is based on the concrete case and cannot be generally and abstractly anticipated"; in case of factual statements, true statements must besuffered, while false statements need not.

20 BVerfG 15.12.1999, NJW 2000, 1021; see also et seq. BVerfG 31.3.2000 and 13.4.2000, NJW 2000, pp. 2191-2194.

21 See BVerfG 9.10.2000, NJW-RR 2001, 411.

22 Christine Keeler, The Truth at Last (2001).

23 Weir, A Casebook Tort, 9th ed. (2000), p. 331.

24 One might for instance wonder whether this verdict applies to my daughter.

25 See BGH 14.2.1958, BGHZ 26, 349, 353.

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