ZXC v Bloomberg LP

Reference: [2022] UKSC 5

Court: Supreme Court

Judge: Lord Reed, Lord Lloyd-Jones, Lord Sales, Lord Hamblen, Lord Stephens

Date of judgment: 16 Feb 2022

Summary: Misuse of Private Information – Breach of Confidence – Data Protection Act 1998 – Article 8 – Article 10 – criminal investigations – letter of request – journalism

Download: Download this judgment

Appearances: Clara Hamer (Appellant) 

Instructing Solicitors: Reynolds Porter Chamberlain LLP

Facts

The Claimant/Respondent (“ZXC”) was the chief executive of a division of “X Ltd”, a major international business. The Defendant/Appellant (“Bloomberg”) is an international financial software, data and media organisation based in New York, well-known for its financial journalism and reporting.

A UK law-enforcement body (“UKLEB”) began a criminal investigation into X Ltd, investigating possible offences of corruption, bribery, offences under the Proceeds of Crime Act 2002 and the Fraud Act 2006, together with conspiracy to commit offences. The UKLEB sent a formal letter of request (“LoR”) to a foreign government seeking its assistance in the investigation. The LoR, which was stated on its face to be confidential, identified ZXC as a suspect. The LoR also set out the evidence the UKLEB had so far obtained, together with its initial conclusions.

Bloomberg had previously published an article which explained that ZXC had been interviewed by the UKLEB as part of its investigation. Although highly displeased at its publication, ZXC had not taken any legal action over this article. Instead, acting through his solicitor, ZXC had provided a comment for publication. The trial Judge described this as being an understandable media strategy in the circumstances.

Bloomberg obtained a copy of the LoR and published an article based largely on its contents, at a time when ZXC had not been charged with any offence. This was the article complained of. ZXC brought a claim for misuse of private information, breach of confidence and breach of the Data Protection Act 1998.

In essence, ZXC complained about (1) publication of the fact that in its investigations into ZXC the UKLEB had asked the foreign state to provide certain banking and business records, and (2) publication of details of the matters that were being investigated. This included a complaint that Bloomberg had published that the UKLEB considered that ZXC had given false information to the board of X Ltd as part of a potential conspiracy, that the UKLEB believed ZXC had committed fraud by false representation, and that the UKLEB was seeking to trace money which it believed was the proceeds of crime carried out by ZXC.

Bloomberg denied that ZXC had a reasonable expectation of privacy in respect of the Information such as to engage his rights under Article 8 ECHR, and argued that any privacy interests that ZXC could demonstrate were outweighed by Bloomberg’s Article 10 ECHR rights of freedom of expression.

Following a four-day trial, in April 2019 Mr Justice Nicklin upheld ZXC’s claim for misuse of private information and awarded him £25,000 in damages.

Bloomberg appealed the finding on liability. In May 2020, the Court of Appeal (Underhill V-P, Bean LJ and Simon LJ) dismissed the appeal, holding 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.” [2020] EWCA Civ 611 at [82]. A 5RB case report on the decision of the Court of Appeal is available here.

Bloomberg obtained permission to appeal to the Supreme Court.

Issue

The Supreme Court identified the issues as follows:

  • Whether the Court of Appeal was wrong to hold that there is a general rule, applicable in the present case, that a person under criminal investigation has, prior to being charged, a reasonable expectation of privacy in respect of information relating to that investigation.
  • Whether the Court of Appeal was wrong to hold that, in a case in which a claim for breach of confidence was not pursued, the fact that information published by Bloomberg about a criminal investigation originated from a confidential law enforcement document rendered the information private and/or undermined Bloomberg’s ability to rely on the public interest in its disclosure.
  • Whether the Court of Appeal was wrong to uphold the findings of Nicklin J that the claimant had a reasonable expectation of privacy in relation to the published information complained of, and that the article 8/10 balancing exercise came down in favour of the claimant.

At [78] the Court made clear that “This appeal does not concern the publication of information about an individual’s wrongdoing resulting from Bloomberg’s own investigations. Accordingly the appeal is confined to the impact of information derived from an investigation of a person by an organ of the state rather than the distinct and separate situation that might arise if Bloomberg wished to publish information as to the results of its own investigations”.

Held

In a judgment by Lord Hamblen and Lord Stephens, with which the other Judges agreed (Lord Reed, Lord Lloyd-Jones and Lord Sales), Bloomberg’s appeal was dismissed.

The focus of the Supreme Court’s judgment was on Issue 1. As to this, the Court confirmed (at [49]-[50]) that the question of whether a person enjoys a reasonable expectation of privacy in respect of any particular information is an objective one, having regard to the expectation of a reasonable person of ordinary sensibilities placed in the same position as the claimant and faced with the same publicity, and in light of all the circumstances, including the so-called “Murray factors” (after Murray v Express Newspapers Ltd [2009] Ch 481).

The Court held that in a case concerning the disclosure, at the pre-charge stage, of information relating to a criminal investigation into an individual, the “legitimate starting point” (as opposed to any legal presumption) is that the individual will have a reasonable expectation of privacy: [144]. That is essentially because, regardless of the status of the individual or the nature of the potentially criminal conduct under investigation, “the person’s reputation will ordinarily be adversely affected causing prejudice to personal enjoyment of the right to respect for private life such as the right to establish and develop relationships with other human beings”: [108].

In reaching its conclusion on this point, the Court rejected 4 key submissions advanced by Bloomberg. First, the Court rejected Bloomberg’s submission that the “legitimate starting point” overlooks the public’s ability to observe the presumption of innocence, so as not to assume guilt. Second, the Court rejected Bloomberg’s submission that, to assume that some readers will think “no smoke without fire” when reading a report of an investigation, is contrary to the established approach in defamation law, which looks only at the understanding of the hypothetical reasonable reader. The Court held that the suggested analogy with defamation claims was inapt. Third, and perhaps most importantly, the Court rejected Bloomberg’s submission that whether a reasonable expectation of privacy arises in respect of reports of an investigation into suspected criminal conduct depends on whether the conduct alleged falls within the sphere of the claimant’s private life and that it is insufficient for that purpose that publication simply harms the claimant’s reputation or otherwise impacts upon the claimant’s enjoyment of his private and family life. Fourth, the Court rejected Bloomberg’s submission that the courts below had failed to apply, as required, an “all the circumstances” test, and that it had only given weight to the effect of publication of the claimant, to the exclusion of any real consideration of the other circumstances.

In reaching its decision on Issue 1, the Court had regard to: various policy concerns, articulated at a high level in, for example, the Leveson Report and the College of Policing guidance, about the potential negative effect on an innocent person’s reputation of reporting that he or she is the subject of a criminal investigation; court decisions reflecting these concerns; and the case law of the ECtHR. Critical to the Court’s finding on Issue 1 was its assessment that “information may be characterised as private because it is reputationally damaging provided it attains a certain level of seriousness and consequentially impacts on the personal enjoyment of the right to respect for private life”: [125].

Issue 2 was dealt with shortly by the Court at [147]-[156]. In summary, the Court held that the confidentiality of the Letter of Request was a relevant factor to be considered when assessing whether ZXC had a reasonable expectation of privacy and that the courts below had not gone further by, e.g., considering that factor to be determinative. The Court did not specifically address, but implicitly rejected, Bloomberg’s case that ZXC’s privacy claim must fail in circumstances where he had not pursued his claim for breach of confidence and where (according to Bloomberg) no claim for breach of confidence had been open to be asserted by him.

Issue 3 did not arise for determination, given the Court’s conclusions that there had been no errors of approach as asserted in Issues 1 and 2.

The Court noted, at [77], that it was common ground that no reasonable expectation of privacy could arise once a suspect is charged with a criminal offence, and endorsed the view that this was so.

The Court also noted that the quantum of damages was not disputed in the appeal, but commented, somewhat cryptically, that “The applicable principles as to damages formulated in this case and in Sicri v Associated Newspapers Ltd may merit consideration in a case in which the issues arise for determination. We have reservations about the extent to which quantification of damages for the tort of misuse of private information should be affected by the approach adopted in cases of defamation…”: [79].

Comment

Claimants will welcome this judgment as the ultimate confirmation of the correctness of the principles laid down in a recent line of privacy cases (see e.g. Hannon v News Group Newspapers Ltd [2015] EMLR 1, Richard v BBC [2019] Ch 169 and Sicri v Associated Newspapers Ltd [2021] 4 WLR 9) to the effect that reports of a criminal investigation into an individual are actionable in the tort of misuse of private information, whether or not they might also properly be the subject of a defamation action. Claimants may well seek to build on this judgment to assert privacy rights in respect of similar reputationally harmful investigations e.g. by tax authorities or regulators.

Defendants, meanwhile, may well complain that the decision introduces uncertainty and incoherence into the law. An article that simply alleges reasonable grounds to suspect that a claimant has acted criminally will, it seems, remain actionable only in defamation, and a defendant will have a complete defence of truth if there is evidence that the claimant conducted themselves in such a way as to bring suspicion upon themselves. By contrast, a similar article which adds that the claimant is also now the subject of a police investigation will generally give rise to a claim in misuse of private information, requiring the defendant publisher to prove an overriding public interest in disclosure of the fact of the investigation regardless of the accuracy of the article. However, the decision is clear and authoritative. Absent a successful application by Bloomberg to the European Court of Human Rights or legislative intervention by Parliament reversing the effect of the decision, publishers will in the future need to identify features of a case which indicate that the “legitimate starting point” does not apply, or which demonstrate an overriding public interest in publication, before they can safely report on criminal investigations prior to charge.