Johnson v Medical Defence Union (No.2) (CA)
Reference:  EWCA Civ 262; (2007) 96 BMLR 99; The Times, 10 April 2007
Court: Court of Appeal
Judge: Buxton, Arden and Longmore LJJ
Date of judgment: 28 Mar 2007
Summary: Data protection - Personal data - Selection of information from manual and electronic files - Whether “processing” of data - Whether processing unfair - Damages - Causation - Quantum - Damage to reputation - ss 1(1), 13, Sch 1, Pts 1, II, Data Protection Act 1998
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Instructing Solicitors: Withers LLP for J; Fladgate Fielder for M
J brought an action against his old insurer M for compensation under s.13 of the Data Protection Act 1998 for unfair processing of his personal data. The processing in question had been the selection of material for the risk review of J’s professional indemnity arrangements which resulted in his cover being terminated. J’s case was that the materials prepared for consideration by the risk assessment group had been unfairly selected and that M’s subsequent decision to terminate cover had caused great damage to his professional reputation.
Rimer J held that the risk manager’s activities constituted ‘processing’ and that parts of this had been unfair, but that overall the processing had been fair and the unfair parts had not caused J any loss. If it had, the Judge would have awarded damages for pecuniary loss and distress but not damage to reputation.
J appealed against the finding that the processing was fair. M cross-appealed on, inter alia, the issue of ‘processing’.
(1) Whether there was processing of data in the terms of the 1998 Act;
(2) If so, whether that processing was unfair;
(3) If so, whether that unfairness had affected M’s decision;
(4) If so, what damages J should recover.
Dismissing J’s appeal and allowing M’s cross-appeal:
(1) The manual selection of the data prior to its automatic processing did not amount to processing of data in the terms of the 1998 Act. If it did it would lead to a very wide range of situations and decision making procedures becoming justiciable under the Act purely because a computer had subsequently been used (Arden LJ dissenting: these manual parts of the procedure were ‘processing’ under the Act)
(2) There was no reason to interfere with the Judge’s findings on fairness.
(3) The assertion that a different (fair) policy would have led to a different decision by M was not sufficiently pleaded or proven and so was not a conclusion even open to the Judge.
(4) J had not suffered pecuniary loss and so could not recover damages for distress under s.13.
This decision provides important guidance on the scope of the DPA, the majority rejecting the assertion that it applies to the manual selection of data prior to its automatic processing.
The Court also confirmed that damages for distress are available under s.13 only where pecuniary loss has been proven, contrary to the wider interpretation urged by the Claimant. The discussion of damages is also notable for Buxton LJ’s comments that an award of £5000 for the Claimant’s distress would have been “plainly too high”, and that any claim for damage to reputation should be made as a claim for defamation and not under the 1998 Act (the laws of defamation in this jurisdiction being “less exacting” than those of other member states).