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16 February 2022

Bloomberg V ZXC – Privacy and Justice

Supreme Court confirms Misuse of Private Information as distinct tort, and a person who is only suspected of crime enjoys a right to privacy.

Following on from our last article on this topic (here), the Supreme Court has this morning handed down its judgment in the long-awaited decision in Bloomberg LP (Appellant) v ZXC (Respondent) [2022] UKSC 5 (here).

Background

The underlying facts of the case are that Bloomberg published an article based on a ‘letter of request’ (the ‘Letter’) from a UK law enforcement body to a foreign government. In the Letter, the enforcement body requested legal assistance with regard to a criminal investigation and referred to a company and the claimant by name. Bloomberg published the claimant’s name in relation to the investigation, even though at that point the claimant had not been charged with an offence. The claimant requested Bloomberg to take the article down, which it refused to do.

At first instance and in the Court of Appeal, the claimant was successful in arguing that his Article 8 (right to a private life) rights to privacy superseded Bloomberg’s Article 10 right to publish (freedom of expression). As Simon LJ said:

“I would take the opportunity to make clear that those who have simply come under suspicion by an organ of the state have, in general, a reasonable and objectively founded expectation of privacy in relation to that fact and an expressed basis for that suspicion. The suspicion may ultimately be shown to be well-founded or ill-founded, but until that point the law should recognise the human characteristic to assume the worst (that there is no smoke without fire); and to overlook the fundamental legal principle that those who are accused of an offence are deemed to be innocent until they are proven guilty.

Supreme Court Decision

Misuse of Private Information

It is important to note that this case involved a claim by ZXC for misuse of private information, and it was not a claim for breach of confidence. The distinction is important and the Supreme Court have confirmed an important precedent on the right to protect private information, as opposed to information that is sensitive for business reasons which confidential information is all about.

Misuse of private information was first recognised as a distinct tort in 2014, in Vidal-Hall v Google Inc[1] but it has proven its importance today. It is distinct from the equitable cause of action for breach of confidence, as misuse of private information is a civil tort. While there is overlap between the two, the main difference is the focus on misuse of private information. Private information being information which is personal and private by its very nature (such as financial information from your bank or your medical records). In distinction breach of confidence can relate to information which is sensitive or secret but which would not have to be of a personal nature (such as trade secrets, or a company’s audit documents). A company could bring an action for breach of confidence, but not for misuse of private information, the latter is linked to the rights of the person.

There are also now clear distinctions in the legal tests for each tort:

The test for misuse of private information was laid out by the Court of Appeal in Vidal-Hall v Google Inc[2], and approved today. The court considers two steps:

  • Is the information in question information over which the Claimant had a reasonable expectation of privacy? (An Article 8 right)
  • If so, does the Claimant’s Art. 8 right to privacy outweigh the Defendant’s Art. 10 right to freedom of expression?
  • The ‘misuse’ element of the tort is very far reaching, and WM Morrison Supermarkets Plc v Various Claimants[3] offers the very clear example of publication of material online, but an action could cover simply discussing the information with another party, the accessing of such information, or the threatened use of such information. The one area the Supreme Court has not given real guidance that could be important in future is on the word ‘misuse’ and what amounts to misuse.

The tripartite test for claims of breach of confidence remain unaffected per Coco v AN Clark (Engineers) Ltd[4]:

  • Does the information have the necessary quality of confidence?
  • Was the information imparted in circumstances importing an obligation of confidence?
  • Has there been an unauthorised use of the information causing detriment?

What the private misuse of information line of authorities show is that the key area for argument now is how the courts will address the competing interests in Art. 8 and Art. 10.

To decide whether Bloomberg had misused ZXC’s private information, the question for the Supreme Court was, in simple terms, whether a person under investigation by a law enforcement body had, before being charged, a reasonable expectation of privacy with regard to the investigation. If so, was this expectation outweighed by the published right to freedom of expression. Therefore the focus was on whether there was a reasonable basis for the privacy right, the misuse was accepted if the right to privacy was established. On this issue the Respondent was successful, as the Supreme Court unanimously dismissed Bloomberg’s appeal. The decision confirming that a person under criminal investigation has, prior to being charged, a reasonable expectation of privacy in respect of information relating to that investigation, and that right took precedence over Bloomberg’s right to freedom of expression.

Arguments and Reasoning

General Position

The Court set out the circumstances that would affect whether an individual would have a reasonable expectation of privacy (the so-called ‘Murray factors’[5]). The Murray factors (which are not exhaustive) are as follows:

  1. The attributes of the claimant;
  2. The nature of the activity in which the claimant was engaged;
  3. The place at which it was happening;
  4. The nature and purpose of the intrusion;
  5. The absence of consent and whether it was known or could be inferred;
  6. The effect on the claimant; and
  7. The circumstances in which and the purposes for which the information came into the hands of the publisher.

Despite Bloomberg arguing that the public understand the concept of ‘innocent until proven guilty’ and so will not draw negative inferences form the article, the Court was clear; that it is widely accepted as a matter of public policy, there is a negative effect on an innocent person’s reputation by publishing that they are under investigation by law enforcement (‘no smoke without fire’ as the Court of Appeal put it). This is why state investigatory bodies do not identify those they are investigating prior to charge. The Letter that formed the basis of the article had also been clearly marked as being confidential and requiring it to be treated as such. The Supreme also noted the case concerning Sir Cliff Richard where the early reporting of a person later confirmed to be innocent was very harmful, and this is not surprising given other judgments have accepted such information is private and that publishing would ordinarily cause substantial damage to reputation.[6]

Bloomberg’s Arguments

Bloomberg advanced four arguments to challenge this general rule, all which were rejected by the Court:

  1. The public have the ability to observe the presumption of innocence, and this is how they are able to sit on juries. Therefore the presumption of damage due to the publication was unsound. The Court rejected this on the ground that the question was how other people, including the person’s inner circle, would react to the information that they were under criminal investigation. This would be different to the detachment that juries would have from a defendant. This damage to the person’s reputation with their inner circle impacts their Art. 8 right to private life to establish relationships with other people.
  2. On the concept of ‘no smoke without fire’ leading to a presumption of damage was contrary to well-established principles of defamation law. However, this was not a defamation action, and the Court emphasised the difference between misuse of private information and defamation. Misuse of private information is not only to protect the individual from the publication of untrue information, but to protect their private life under Art. 8.
  3. There should be a distinction between private life and business information concerning an individual. The argument was that information that is reputationally damaging but not part of the claimant’s personal private life should not be protected under the tort of misuse of private information. The Court rejected this as an unduly restrictive reading of Art. 8 rights, which can include an individual’s professional or business activities.
  4. Bloomberg argued that the lower courts had failed to take into account ‘all the circumstances’ of the case’ including the activity in which ZXC was engaged, namely ‘alleged corruption in relation to ZXC’s company’s activities in a foreign country.’ The Court disagreed, and said that the lower courts gave due consideration to the applicable Murray factors, including ZXC’s status as a businessman involved in the affairs of a large public company, and had not made them determining and the allegation of corruptions was considered, but did not overcome the analysis in favour of privacy.

For all these reasons, the Supreme Court found that the lower courts were correct to hold that, as a legitimate starting point, a person under criminal investigation has, prior to being charged, a reasonable expectation of privacy in respect of information relating to that investigation and that in all the circumstances this is a case in which that applies and there is such an expectation.

Public Interest

Bloomberg also appealed the Court of Appeal decision on the relevance of a claim for breach of confidence which was not pursued. The importance being that Bloomberg published information originating from a confidential law enforcement document, and they argued that this was permitted on a basis of public interest which could have been successful as a defence to a confidential breach argument. Unfortunately for them that was not the ultimate focus of the case, and focus on misuse of private information private undermined Bloomberg’s ability to rely on the public interest argument in its disclosure. Consequently, the Court dismissed this appeal point, because the lower courts did not find that the Letter’s confidentiality in and of itself rendered the information private or prevented Bloomberg from relying on the public interest in its disclosure. Although, the Letter’s confidentiality was a relevant and important factor for deciding whether there was a reasonable expectation of privacy in the information and balancing that expectation against Bloomberg’s freedom of expression, it was not determinative.

Commentary

The Supreme Court has fully endorsed all the findings of the judge at first instance and the Court of Appeal. It has made it clear in no uncertain terms that, prior to being charged, an individual has a reasonable expectation of privacy in information about a criminal investigation into them or their activities. Such an expectation is highly likely to trump a media organisation’s right to freedom of expression. The tug of war between a right to private life (Art. 8) and the right to publish (Art. 10) is therefore where the marginal cases will now be fought. This case also shows the growing support for privacy across judicial decisions. There is clearly a societal shift, that whist many choose to share much about themselves online, the essential right to privacy remains and will be afforded protection. Misuse of personal data or personal information is therefore an area where the rights only continue to grow. It means all uses of personal information should consider carefully if they can justify how they source and use personal information.

 


1. [2014] EWHC 13 (QB).
2. [2015] EWCA Civ 311.
3. [2020] UKSC 12
4. [1968] F.S.R. 415
5. See Murray v Express Newspapers plc [2008] EWCA Civ 446 at para 36
6. See for example R (Rai) v Crown Court at Winchester [2021] EWHC 339 (Admin) at para. 49 in which the Court said that ‘in general, a suspect in a criminal investigation has an expectation of privacy up to the point of charge; not thereafter.’

Authored by James Tumbridge

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