Case Preview: Gulati v MGN, Mirror Phone Hacking Damages Appeal – Hugh Tomlinson QC

“Personal injury awards are almost always made in actions based on negligence or breach of statutory duty rather than intentional wrongdoing. Furthermore, the damages are almost always paid out of public funds or by insurers under policies which are not very sensitive to the claims records of individual defendants. The cost is therefore borne by the public at large or large sections of the public such as motorists or consumers. The exemplary and deterrent elements in personal injury awards are minimal or non-existent [50] … 

Few of these considerations of equity and policy apply to awards in defamation cases. On the other hand, defamation cases have important features not shared by personal injury claims. The damages often serve not only as compensation but also as an effective and necessary deterrent. The deterrent is effective because the damages are paid either by the defendant himself or under a policy of insurance which is likely to be sensitive to the incidence of such claims.. .. Awards in an adequate amount may also be necessary to deter the media from riding roughshod over the rights of other citizens” [53]

Lord Hoffmann went on to hold that the Court of Appeal in Jamaica

“were entitled to hold the opinion that a conventional figure established for an award performing one social function was no guide to what should be the conventional figure for an award performing a different social function” [63].

Similar arguments could be applied in relation to awards of “privacy damages”.

In other words, the argument based on the Judge’s failure to take proper account of personal injury damages faces formidable difficulties.

Ground 2: No consistent with awards of the Court of Human Rights

Secondly, MGN contends that the awards made the Judge were disproportionate having regard to the sums awarded by the European Court of Human Rights (“ECtHR”) for invasion of privacy rights under Article 8.

There is no doubt that awards made by the ECtHR are much lower than those made by the Judge in this case.  To take only one example among many, in the case of Armoniene v Lithuania ([2008] ECHR 1526), which concerned the publication of an individual;s HIV positive status.  The ECtHR held that a low domestic limit on privacy damages was incompatible with Article 8 and awarded “just satisfaction” of €6,500.

The difficulty with the analogy with ECtHR awards is two-fold:

(1)  As in the Armoniene case the ECtHR rarely provides any explanation of the figure awarded – it is simply stated as being the assessment which the court makes “on an equitable basis”.  As the Supreme Court has pointed out

“the European court does not often articulate clear principles explaining when damages should be awarded or how they should be measured. That reflects a number of factors. One is that the court cannot replicate at an international level any one of the widely divergent approaches to damages adopted in the domestic legal systems from which its judges are drawn: the systems of 47 countries, stretching from the Atlantic to the Caspian, with diverse legal traditions. Nor is there a relevant body of principles of international law which it can apply. The court has therefore had to develop its own practice through its case law. Given the differing traditions from which its judges are drawn, and bearing in mind that the court has not regarded the award of just satisfaction as its principal concern, it is not altogether surprising that it has generally dealt with the subject relatively briefly, and has offered little explanation of its reasons for awarding particular amounts or for declining to make an award”, per Lord Reed, Regina (Faulkner) v Secretary of State for Justice [2013] 2 AC 254 [34].

In other words, it is impossible to ascertain why, in any given case, the ECtHR decided to make an award of just satisfaction in the sum that it did.

(2)   More fundamentally, the exercise being conducted by the ECtHR and the exercise being conducted by the High Court are completely different.  The ECtHR is applying Article 41 of the Convention and seeking to give “just satisfaction” to applicants.  The High Court is applying tort principles under English law – misuse of private information having been confirmed to be a tort).  There is no reason why the application of those principles should arrive at the same (or similar) result to the application of Article 41 by an international court.

As a result, the second argument also appears to me to face serious difficulties.

Ground 3: Double Counting

MGN contends that there has been double-counting in the awards of damages: first in awarding damages for the fact of hacking, having already made awards for published articles; second for awarding an additional sum for general upset and effect on relationships; and third for treating each article in isolation.

In relation to the first point, the Judge’s damages awards certainly covered both the distress and anxiety resulting from the published articles (which were either admitted or found to be the result of phone hacking) and a sum for “general hacking”. This is explained by the Judge at [230].

It is, however, difficult to see how the Judge’s awards constituted “double counting”.  As the Judge explained, for example, in relation to Mr Ashworth

“Some of the compensation attributable to [general hacking] has, to a very significant degree, been reflected in the compensation  for the articles and private investigator activities.  However, there is a significant residue which has not.  I have found that, for much of the period, there was frequent daily hacking.  Because of the nature of the messages left on the phones, it will indeed have opened a window into what Mr Ashworth called the darkest period of his life, viewed through messages left by, and for, Ms Shaw, friends, family, a therapist and others” [361] (see also .

In other words, the Judge discounted the “general hacking” award to take account of the awards made in relation to published articles.  It is, therefore, difficult to see how there was double counting under this head.

Second, the additional sum for “general upset” was added by the Judge in relation to each claimant.  This was an award of distress damages to reflect the Judge’s assessment, in each case, of the additional upset and distress caused by the admittedly unlawful activities of MGN.  This was distress which he found to be additional to that caused by specific articles.  This is a finding of fact as to distress and again, is difficult to characterise as “double counting”.

Third, MGN complains that the Judge looked at the damages on an “article by article” basis.  It appears that the contention is that the distress caused should be looked at in relation to the whole run of articles because, where there was more than one article, the distress would decrease because the claimant would, to some extent, become “battle hardened”.

There are two points here.  First, each admitted article is an admitted tort and compensation should, in principle, be assessed on an article by article basis.  This is approach taken in libel cases where there are a series of defamatory publications.  Second, insofar as the subsequent articles were less distressing than the earlier ones this should be taken into account in the damages award.  Although there is obviously substance in this point, but the Judge looked carefully at the distress caused by each article, in the context of the earlier publications and there seems to be no basis for challenging his factual assessment of the appropriate level of distress damages.

Once again, therefore, the third ground of appeal appears to involve MGN in an uphill task.

Ground 4:  Privacy damages are compensation for injured feelings

The final ground of appeal is that Judge was wrong to reject MGN’s submission that damages for breach of privacy are compensation for injured feelings and are not intended to mark wrongdoing.

This gives rise to an interesting point of principle.  There is no doubt that “privacy damages” cover distress and anxiety but it is not clear why they should be limited to this.  The Judge considered the point in some detail and concluded that

“it is not in my view apparent why distress (or some similar emotion), which would admittedly be a likely consequence of an invasion of privacy, should be the only touchstone for damages.  While the law is used to awarding damages for injured feelings, there is no reason in principle, in my view, why it should not also make an award to reflect infringements of the right itself, if the situation warrants it.  The fact that the loss is not scientifically calculable is no more a bar to recovering damages for “loss of personal autonomy” or damage to standing than it is to a damages for distress.  If one has lost “the right to control the dissemination of information about one’s private life” then I fail to see why that, of itself, should not attract a degree of compensation, in an appropriate case.  A right has been infringed, and loss of a kind recognised by the court as wrongful has been caused.  It would seem to me to be contrary to principle not to recognise that as a potential route to damages” [111].

This approach is supported by case law on breach of confidence.  Thus in Cooper v Turrell ([2011] EWHC 3269 (QB)) in which a company was awarded £10,000 general damages for breach of confidence, despite the fact that it had no feelings to injure and had suffered no financial loss.  This is analogous to Mann J’s awards of damags to reflect infringments of the rights themselves.

This is not a point which has been analysed by any appellate court and it will be interesting to see how the Court of Appeal approaches it.

Conclusion

In summary, therefore, each of the grounds relied on by MGN faces seriouis difficulties.  It will  be interesting to see to what extent the Court of Appeal are prepared to accept MGN’s challenges to Mann J’s careful conclusions on the law and the facts.

If the Court of Appeal were to hold that Mann J had erred in principle then difficult issues may arise as to the impact this would have on the damages award.  The Court of Appeal could, of course, remit the case for reconsideration to Mann J (or another judge) but this would seem hugely disproportionate after a 13 day trial.  The only alternative would then be for the Court of Appeal to substitute its own awards of damages for those made by the Judge, without having seen the witnesses at trial.  The problems with such a course are obvious.

This will be an interesting appeal and we look forward to reporting on it next week.

Hugh Tomlinson QC is an editor of Inforrm and was lead counsel for the claimants in the News of the World phone hacking litigation.