ZXC v Bloomberg, and Fortescue v Argus Media Ltd – lessons on privacy based injunctions

Privacy

In May of this year, two important decisions were handed down regarding privacy and breach of confidence disputes against media outlets. Shortly after the Court of Appeal handed down its breach of privacy decision in ZXC v Bloomberg, the High Court released a judgment regarding the use of confidential information by the media in (1) Fortescue Metals Group Ltd (2) Chichester Metals Pty Ltd v (1) Argus Media Ltd (2) S&P Global Inc. The two cases concerned claimants seeking an injunction and a restraining order, respectively, against media organizations. Both cases illustrate that where claimants bring actions based on their right to privacy and/or confidentiality, the court must balance these rights against the media’s right to freedom of expression and the general public interest.

The decision in ZXC v Bloomberg is of particular significance, as it is the first time since the landmark decision of Sir Cliff Richard v BBC [2019] Ch. 169, that the Court of Appeal has weighed in on the privacy rights of suspects under criminal investigation who have not yet been charged. In Bloomberg, the Court of Appeal held that individuals under criminal investigation who have not been charged have a reasonable expectation of privacy. Conversely, in Argus Media, it was held that despite the relevant information having a ‘quality of confidence,’ the high threshold for restraining the publication of such confidential information was not met.

ZXC v Bloomberg

On May 15th, the Court of Appeal handed down judgment in the case of ZXC v Bloomberg. The case concerned whether suspects in criminal investigations have a reasonable expectation of privacy, and if so in what circumstances. The Court of Appeal upheld the trial decision of Mr. Justice Nicklin finding that Bloomberg’s publishing of an article, which featured confidential information gleaned from a UK law enforcement body letter, amounted to a misuse of private information. The article concerned an ongoing criminal investigation regarding bribery and corruption allegedly carried out by a major international corporation.

Background

In 2013, a UK law enforcement authority announced a criminal investigation into the company in question (which was not named in the case). Bloomberg published two articles in 2016 which named the Claimant, a chief executive of a division of that company, in connection with the investigation. A ‘letter of request’ from a UK law enforcement authority to a foreign government, in which it requested legal assistance and referred to the company and Claimant by name, formed the basis of one of Bloomberg’s articles. Roughly a week after publication, the Claimant’s legal representatives requested Bloomberg to take down the article, which Bloomberg declined to do. The Claimant then applied for an interim injunction, based on a misuse of private information. While the interim application was dismissed, the Claimant pursued a claim for damages and a final injunction.

In his first instance judgment, Nicklin J. held that the publication of the information from the letter of request amounted to a misuse of private information, stating that; “In general, a person does have a reasonable expectation of privacy in a police investigation up to the point of charge.” Second, in balancing the European Convention of Human Rights (ECHR) Article 8 rights of the Claimant and Bloomberg’s Article 10 ECHR right to freedom of expression, the judge found that the Claimant’s privacy rights were not outweighed. While there was a general public interest in investigating the corruption allegation (which took place in a foreign country) this had little to no bearing on whether there was a public interest in publishing the article. Therefore, the judge granted the injunction and awarded damages of £25,000.

The decision

The Court of Appeal upheld the decision, and stated in its judgment 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.” Furthermore, the Court held that the reasonable expectation of privacy generally is not dependent on the type of crime under investigation, or the suspect’s public characteristics (for example, involvement in business or politics).

Comment

This judgment confirms that those facing law enforcement investigations therefore have a reasonable expectation of privacy, particularly when they have yet to be charged. Importantly, the case establishes that, with respect to privacy law, no distinction ought to be made between private criminal offences and those occurring in a business context. Therefore, there is no hierarchy of offences when considering an individual’s reasonable expectation of privacy, save for those where the activity in question was irreducibly public. It is also important to note that the type of crime is not a strong reason in favour of publication. Though the ruling does not mean that articles discussing criminal investigations cannot be published, it does affirm a presumption of a right to privacy. Outweighing that privacy right by public interest considerations is no longer an easy hurdle. Notably, Bloomberg applied for permission to appeal the Court of Appeal’s decision to the United Kingdom Supreme Court, so this is not yet the final word and end of the dispute.

FMG and anor v (1) Argus Media Ltd (2) S&P Global Inc.

The second decision, handed down a week after the Court of Appeal’s decision, was in the case of FMG and another v Argus Media Ltd and S&P Global Inc., which concerned a breach of confidence, not a privacy dispute.

Background

In this case, the High Court was asked by the claimants to continue an interim restraining order against two price reporting agencies (PRAs) from publishing pricing data protected by contractual confidentiality obligations, but which had frequently become available to PRAs, and were made available on social media. Specifically, FMG sought to prevent, until trial, Argus and S&P from publishing stories concerning monthly discount rates used by FMG to price sales of iron ore.
FMG submitted that the discount it used on dry metric tonne units (DMTUs), the internationally recognised iron ore measurement, which they applied in dealings with customers, constitutes confidential information which FMG has a commercial interest in protecting. FMG explained that long-term and prospective customers are contractually prohibited, through confidentiality obligations, from disclosing FMG’s DTMU discount rates.

The defendants (as well as other PRAs) had, since 2014, published analysis referring to FMG’s monthly discounts, comparing them with discounts from prior months, in order to assess the global supply and demand dynamics of the iron ore market. Beginning in late 2019, FMG sought to enforce the confidentiality obligations which, they argued, covered the discount rate figures.

To that end, FMG asserted that, beginning in 2018, their final pricing formulae included the DMTU discount. Furthermore, beginning in December 2019, FMG took steps to safeguard what they argued was the confidential nature of the DMTU discounts, notifying existing and prospective customers of their confidentiality, and incorporating confidentiality provisions into their contracts. These steps culminated in April of this year, when the claimants sought and were granted an interim restraining order against Argus and S&P’s publishing of their discount figures going forward, beginning in May 2020.

The decision

In his decision, Mr. Justice Miles found in favour of the defendants, refusing an extension of the interim restraining order. The decision, in large part, is explained by the high burden of proof required for extending interim relief where freedom of expression issues arise. The Judge noted that PRAs are ‘publishers of journalism’ under EU law, and therefore any duty to treat FMG’s discounts with confidence must be balanced against the defendants’ Art. 10 rights to freedom of expression.
Regarding the burden of proof, FMG was required to show the court that it probably would obtain a permanent injunction at trial; but it failed to do so. Importantly, just because the interim order was lifted, this does not mean that permanent relief could not eventually be granted at trial. However, it has been reported that FMG has abandoned its claim, making this a moot point.

Lastly, regarding the confidential nature of the discount figures, the judge found it more likely than not that, at trial, FMG would be able to show that the discounts had a ‘quality of confidence.’ However, he also found that any corresponding duty of confidentiality would be relatively weak in the circumstances, as FMG had allowed the publication of the discounts since 2014 without taking any action.

Comment

While the decision was highly dependent on the facts (particularly the parties’ history and prior publication of the discount information) the case provides a useful reminder of the considerable threshold which a party must satisfy when seeking an order to restrain the publication of confidential information, particularly when issues of freedom of expression exist.