Dodd & Hanna: McNae’s Essential Law for Journalists, 24th edition

Additional Material for Chapter 26: Breach of confidence

Section numbers from the book are used when relevant. Its content provides fuller
explanations and context.

26.1.1 Information already in the public domain

Case study: In 1982 the Court of Appeal lifted an injunction, granted under the law of
confidence, which had stopped the Watford Observer publishing information about Sun
Printers, a local company. In 1981 the company launched a ‘survival plan’, reducing its
workforce from 1,800 employees to 1,300. It was chaired by the magnate Robert
Maxwell, and had been making losses. Later in 1981 Maxwell appointed ‘an independent
commission’ to prepare a report to make recommendations about the company’s future,
and asked the workforce to give it information, saying he would make a copy of its report
available to the ‘the trade union side’. When the report was finished, Maxwell arranged
for six copies of it to be sent to general secretaries of trade unions, six to union branch
secretaries, 10 to union officials among the workforce, 28 to directors and senior
managers, with 60 copies going to middle and junior managers. The idea was that trade
union officials would discuss the report’s findings with the company’s workforce – which
meant the company expected information in the report to be shared with the workforce,
so they could put their views to Maxwell. He had, on the basis of the report, already told
managers and trade union officials that there needed to be a further 338 job losses at Sun
Printers. Someone gave a copy of the report to the Watford Observer. After Maxwell
heard that the newspaper planned to publish extracts, Sun Printers obtained a High Court
injunction to stop it from doing so from a judge who ruled that the report had been
passed on in a breach of confidence. The newspaper appealed and the Court of Appeal
lifted the injunction, allowing the newspaper to publish the extracts. The Master of the
Rolls, Lord Denning said in the decision that the commission’s report was so widely
circulated by Sun Printers that it could not be regarded as confidential. ‘It was for
circulation amongst such a large number of people that it had not a sufficient degree of
confidence to entitle it to the protection of the law’. So whoever handed a copy to the
Watford Observer had not breached any confidence, and the newspaper did not take it
knowing that there was a breach of confidence. Lord Denning also said that publishing the
information would be in the public interest, because the matters in the report were of
great interest to ‘all the many people in the Watford area’ who were concerned with
printing. ‘They were fit to be discussed, not only with the immediate workers in the Sun
Printing works, but also those outside connected with the printing industry or interested
in it’. By saying this, he was presumably referring to the prospect raised by Maxwell of
hundreds of jobs being lost at Sun Printers (Sun Printers v Westminster Press Ltd, [1982]
IRLR 292).

26.5.1 Damages
The legal battle which was the Douglas case lasted for seven years, and showed that breaching the
law of confidence can be very costly.

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 Dodd & Hanna: McNae’s Essential Law for Journalists, 24th edition

Case study: In 2000 the actors Michael Douglas and Catherine Zeta-Jones and the publishers
of OK! magazine sued rival Hello! magazine in the High Court for breach of confidence after it
published unauthorised photographs of the couple taken at their wedding reception in a New
York hotel. The couple had an exclusive £1 million deal with OK! under which their wedding
pictures would be taken by their own photographer and only images which they approved
would be published. But Hello! obtained unauthorised pictures from a paparazzi photographer
who managed to get into the hotel and take the pictures covertly. Hello! rushed its next
edition into print to publish his photos and so spoil the commercial impact of the OK!
‘exclusive’ pictures. Mr Justice Lindsay, ruling that Hello!’s publication of the unauthorised
pictures infringed the couple’s privacy, ordered it to pay them £14,600 in damages, as well as
damages of £1 million damages to OK! magazine. Hello! appealed against the £1 million
award, but in 2007 it was upheld by the House of Lords (Michael Douglas, Catherine Zeta-
Jones, Northern and Shell PLC v Hello! Ltd, Hola SA, Eduardo Sanchez Junco (4), Marquesa de
Varela, Neneta Overseas Ltd and Philip Ramey [2007] UKHL 21).

In Douglas it was ruled that Hello! magazine knew when it bought the unauthorised pictures that the
‘information’ they contained – images of the couple - was regarded as private and confidential, and
was also capable of commercial exploitation, and therefore Hello!’s conscience was touched - it was
bound by the duty of confidentiality. It was noteworthy as regards the development of privacy law,
and – for some in the media, controversial - that the decision in Douglas was that the couple’s
wedding was a private occasion, although there were 350 guests and the couple were exploiting it in
the picture deal with OK! The ruling was that the security measures the couple took against
intruders, and their insistence on approving which images were published, made it private.

26.6.2 Publication in the public interest

Case study: In 2017 the Court of Appeal upheld a High Court decision which stopped
international news agency Reuters from publishing information believed to have been
taken from confidential documents sent to potential professional investors by a major
hedge fund management company. The central issue in the legal battle between
Reuters and Brevan Howard Asset Management (BHAM) was whether the public
interest in publishing the material outweighed the public interest in protecting the
duty of confidentiality which attached to it. The Court of Appeal ruled that the High
Court judge was entitled to find that the balance came down in favour of restraining
publication. Reuters and financial journalist Maiya Keidan had wanted to publish an
article based on material it received which was thought to be based on documents
BHAM had sent to potential professional investors. The package of seven documents
was sent to the possible investors with a notice that it was private and confidential
and not to be disclosed. No details of the nature of the information at the heart of the
case were ever disclosed by Reuters. BHAM, one of the largest hedge fund managers
in Europe, went to the High Court on March 10, 2017, seeking an interim injunction,
after Reuters approached it to confirm the accuracy of the material it had received.
Mr Justice Popplewell granted an injunction restraining publication, pending trial, and
Reuters appealed. The Court of Appeal - the Master of the Rolls, Sir Terence

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 Dodd & Hanna: McNae’s Essential Law for Journalists, 24th edition

Etherington, sitting with Lord Justice Longmore and Lady Justice Sharp - rejected the
appeal in a decision on July 7. Sir Terence said that Guy Vassall-Adams QC, for
Reuters, had argued that the High Court judge had wrongly adhered to the law pre-
dating the Human Rights Act in believing that the paradigm case of public interest was
where publication would correct a false impression or reveal wrongdoing or
hypocrisy, and that, in the absence of such a factor, disclosure would only be
permitted in the public interest if that was ‘vital’ and the case was ‘exceptional’. Sir
Terence went on: ‘The legal principles applicable to the present case are well
established. In applying them, the judge made no error of principle or law. His
conclusions that the balance came down in favour of the preservation of the
confidentiality of BHAM's information and that the grant of an injunction is a
proportionate exception to Reuters' right to freedom of expression under Article 10
are ones he was entitled to reach.’ The judge had applied the principles laid down by
the Court of Appeal in Associated Newspapers Limited v HRH Prince of Wales ([2006]
EWCA Civ 1776, [2008] Ch 57), which post-dated the Human Rights Act and was
centrally concerned with the issue whether the common law of confidence had to be
revised in order to give full effect to rights under Article 10 of the European
Convention on Human Rights, which guarantees freedom of expression, Sir Terence
said. The Court of Appeal had said in that case that in a privacy case, where no breach
of a confidential relationship was involved, a balance had to be struck between the
right to freedom of expression and the right to respect for privacy and family life
under Article 8, which would usually involve weighing the nature of and
consequences of the breach of privacy against the public interest, if any, in the
disclosure of private information. But this was a case where the information was
imparted and received in confidence. The Court of Appeal had addressed the
principles in such a case in the Prince of Wales judgment, observing (in paragraph 66)
that the fact that information related to information received in confidence was a
factor recognised under Article 10 (2) as being of itself capable of justifying
restrictions on freedom of expression. ‘There is nothing inconsistent between the
approach in the Prince of Wales case and the jurisprudence of the European Court of
Human Rights,’ Sir Terence went on. ‘The Strasbourg court expressly recognised in
Markt Intern and Beerman v Germany ((1990) 12 EHRR 161, at paragraph 35) that
even the publication of items which are true and describe real events may have to be
prohibited in order to respect the confidentiality of certain commercial information.’
This consistency of approach was confirmed in domestic jurisprudence, he added,
citing Attorney-General v Times Newspapers Ltd ([1990] 1 AC 109). Reuters had
criticised Mr Justice Popplewell for having quoted from the judgment of Lord Justice
Griffiths in Lion Laboratories Ltd v Evans ([1985] 1 QB 526) and his use of the
expression ‘vital in the public interest’ as the touchstone for justifying publication in
breach of confidence. But that criticism was misplaced, Sir Terence said. Mr Justice
Popplewell had noted that the passage containing that expression was cited, without
any disapproval, in the Court of Appeal judgment in the Prince of Wales case, Sir
Terence went on. ‘That expression is no more than an indication that, in carrying out
the necessary balancing exercise, there must be sufficiently significant matters of

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 Dodd & Hanna: McNae’s Essential Law for Journalists, 24th edition

public interest in favour of publication to outweigh the public interest in the

observance of duties of confidence,’ he said. ‘It is entirely consistent with the
statements in the Court of Appeal's judgment in the Prince of Wales case that there is
an important public interest in the observance of duties of confidence and that it is
not enough to justify publication that the information in question is a matter of public
interest…The importance of Lion Laboratories was that it made clear that such
significant matters of public interest are not confined to the disclosure of iniquity.’ Sir
Terence added: ‘The only question which the judge had to address, and which he did
address, was whether the important public interest in the observation of obligations
of confidence was outweighed by sufficiently significant matters of public interest in
favour of publication. Unless his conclusion on that issue was one which no judge
could properly reach, or he was swayed by matters he wrongly took into account or
by failing to take into account matters he should have considered, his decision cannot
be disturbed on appeal’ (Brevan Howard Asset Management LLP v Reuters Limited &
another [2017] EWCA Civ 950; Media Lawyer, July 13, 2017). For an outline of the
Prince of Wales case in the context of copyright issues, see the Additional Material for
ch. 29 on www.mcnaes.com. The Lion Laboratories case is outlined in 26.6.2 of
McNae’s.

© National Council for the Training of Journalists, 2018