Notes of Cases
| Published date | 01 January 1968 |
| DOI | http://doi.org/10.1111/j.1468-2230.1968.tb01175.x |
| Date | 01 January 1968 |
NOTES
OF
CASES
PROFESSIONAL
ETHICS
AND
RESTRAINT
OF
TRADE
EVERY professional body has its own ethical code which seeks,
inter alia,
to promote its welfare, interests and status. The rules
or
principles which aim at achieving these objectives very often
involve restraints of trade. Thus, among the most common bars
to
a profession are advertising and undercutting-these activities
which are indeed laudable in the business world
(so
much
so
that
their restraint is prima facie contrary
to
public policy) are, whether
rightly
or
wrongly, considered offensive and disgraceful profes-
sionally. Can an ethical rule which is arbitrary and capricious
be
challenged by a declaration and an injunction
?
Does the doctrine
of restraint of trade apply to professional bodies? These two
questions were considered in
Dickson
V.
Pharmaceutical Society
of
Great Britain.’
In
the instant case, the plaintiff, a retail director
of
“
Boots,”
challenged by a declaration and an injunction a proposed rule of
the Pharmaceutical Society of Great Britain
a
which sought
to
limit the range of non-pharmaceutical goods sold in chemists’ shops
on
the ground that
it
was in unreasonable restraint
of
trade and
Con-
trary to public policy. Pennycuick
J.
in
the court
of
first instance
granted a declaration and an injunction
on
the ground that such
a rule would operate as an unjustified restraint of trade. The
appeal was dismissed by the Court of Appeal.
Lord Denning
M.R.
considered the main point whether the
issue was a justiciable one
for
the purpose of the remedies of
declaration and injunction. It
is
clear that the said remedies
are available where there is a justiciable issue,
viz.,
an infringement
of the right of property
or
contract.’
Is
a matter which concerns
a rule of professional conduct a justiciable issue? This question
was considered in
Cox
v.
Green.‘
There, the plaintiff and the
defendant were medical practitioners. The plaintiff had previously
acted as a
Zocurn
tenens
for the defendant’s then partner, a Dr.
Killen. The defendant complained that the plaintiff had acted
contrary to
6‘
Medical Ethics
”
in respect of setting up a medical
1
[1967 Ch.
708;
[1967]
2
W.L.R.
718; 19671 2
All
E.R.
558.
a
The Bociety is incorporated
by
Roya
\
Charter in 1843,
now
replaced
by
a
Royal
Charter
of
December 31, 1953. The Society controls the professional
activities of pharmacists.
3
See
Nison
v.
Att.-Gen.
[1930]
1
Ch. 666; Guaranty
Trust
Co.
of
New
York
v.
Hannay
$
Co.
[1915] 2
K.B.
686.
4
[1966]
1
Ch.
2l6.
5
The particular rule
of
conduct relating
to
the settin up
of
medical praotice
was
contained in the British Medioal Association
Han%book
1863
at
pp. 59-60.
The particular section provides
inter
olio
n
restrictive covenant precluding
practice for
an
agreed time
in
a
defined area
by
n
partner, assistant or
locum
tenens
after the termination
of
the contract.
70
JAN.
1968
NOTES
OF
CASE8
71
practice and brought the issue to the attention of the Central
Ethical Committee of the British Medical Association. But, before
the matter could be considered by the Committee, the plaintiff
applied to the court for a declaration
inter
alia
that he had been
acting in accordance with those rules. The defendant took out a
summons to strike out the statement of claim as disclosing
no
cause
of action. Plowman
J.
decided in favour
of
the defendant
on
the ground that therk was
no
justiciable dispute between the parties.
He said:‘
‘‘
The issue between them does not concern any right
of
property;
it
does not concern any right of contract; it does
not concern any legal right. The question is purely whether the
plaintiff, as the defendant alleges, has been guilty of unethical
conduct in a professional way.”
It
would appear that rules of professional conduct are analogous
to a
‘(
gentleman’s agreement
”
and cannot be sued upon as a
contract since there is
no
“
intention to create legal relations.”
Let
it
be supposed that a pharmacist
or
a particular chemist
chooses to ignore the rule
if
implemented and sells non-traditional
pharmaceutical goods.
If
according to the Pharmaceutical Society,
he has breached a professional rule
it
would seem,
on
the authority
of
Cam
v.
Green,
that the courts would leave the matter to be
decided by the disciplinary body
of
the Pharmaceutical Society
subject
to
appeal to the High Court. Courts, however, have not
pursued the notion
of
‘c
gentleman’s agreement
”
to its logical
conclusion. They have, for example, held that a rule which pur-
ports to oust the jurisdiction
of
the courts is invalid
’
on
the ground
of public policy even though this might be considered analogous to
a
“
gentleman’s agreement.” Again, courts have declared that they
have jurisdiction to declare a rule invalid if
it
is
“
arbitrary and
capricious.”
In
Nagle
v.
Feilden,O
for
example, the Court
of
Appeal, taking a very liberal view, indicated that the remedies
of
declaration and injunction might lie against the stewards
of
the
Jockey Club who refused to grant a licence to a woman horse-
trainer because she was a woman. The case is particularly
significant because the plaintiff,
Mrs.
Nagle, did not stand in
contractual relationship with the stewards
of
the Jockey Club.
The basis
of
the court’s intervention rested
on
a very broad principle
that
it
affected a person’s
‘‘
right to work.”
Whatever may be the position of the plaintiff in the instant
case had he breached the particular rule when implemented, it
seems clear that the court has jurisdiction to inquire into the
validity of the rule even at the stage before implementation and to
[l966]
1
Ch.
216
at
p.
221.
1
Lee
v.
Showman’e
Guild
[1952] 2
Q.B.
329;
Baker
V.
Jones
[l954]
1
W.L.R.
1005.
8
[1966]
2
W.L.R.
1027.
See
also,
Boultin
v.
Association
o
Cinematograph
[1963] 2
Q.B.
606;
Eaatham
v.
Newcastle
dnited
Football
Clu6
[1964]
Ch.
413.
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