Information which was sent to international news agency Reuters was protected by a requirement of confidentiality because it was almost certainly taken from documents sent to potential professional investors by a major hedge fund management company, a High Court judge has held.
The material was taken from a package of seven documents sent to the possible investors with a notice that it was private and confidential and not to be disclosed, said Mr Justice Popplewell.
He granted an application by Brevan Howard Asset Management (“BHAM”) in an action for breach of confidence for an interim injunction banning Reuters from disclosing or publishing the information it had received.
No details of the nature of the information at the heart of the case were disclosed in Mr Justice Popplewell’s public judgment, which was handed down on 28 March 2017 ( EWHC 644 (QB)). The injunction had been granted on 23 March 2017 and a press statement made the following day.
BHAM, one of the largest hedge fund managers in Europe, which currently manages more than 15 million US dollars in a range of funds, first went to court on March 10, seeking an interim injunction, after Reuters approached it to confirm the accuracy of the material it had received.
The material is said to have come from a package of seven documents which BHAM sent to 36 potential investors in electronic form.
Mr Justice Popplewell said Reuters had said it had not received the documents themselves.
“However on the evidence presently available, it is probable that the information Reuters has received is derived from those documents, most probably originating directly or indirectly from one or more of the 36 potential investors to whom they were sent in the circumstances which I have described” 
The judge said the general approach in applications of this kind was governed by section 12 (3) of the Human Rights Act 1998, and Cream Holdings v Bannerjee ( 1 AC 253), and was that the court would be “exceedingly slow to make interim restraint orders” where the applicant had not satisfied it that he or she would probably – that is, more likely than not – succeed at trial in obtaining a permanent non-disclosure order.
This was an “enhanced merits test” which reflected the importance attached to the role of an independent press in a democratic society and the European Court of Human Rights jurisprudence on the approach to prior restraint of publication by the press, the judge said.
The ingredients for an action for breach of confidence, summarised in Terry v Persons Unknown ( EMLR 16) were that the information had the necessary quality of confidence, was imparted in circumstances importing an obligation of confidence, and that unauthorised use or disclosure was threatened, the judge went on.
The evidence suggested that the information received by Reuters could only have been compiled by someone who had the documents BHAM had sent the potential investors – no other source from which the figures could have come had been identified. The Judge went on to say:
“It is also probable, on the current evidence, that the documents provided to potential investors were impressed with the quality of confidence. The confidentiality of the information supplied to the potential investors is apparent from both its nature and the circumstances in which it was conveyed to and received by them. It was sensitive commercial information not previously held in that form but created for the purposes of making candid and responsible disclosure to a limited number of potential investors; it would have the potential to be valuable to BHAM’s competitors and damaging to BHAM’s business if disseminated more widely. Although not a trade secret in the true sense, it is confidential business information which can properly be the subject matter of confidentiality.” 
Reuters had said that it had received a “third party” document from a source who had given an assurance that it was not obtained in breach of confidence.
But its journalist, Maiya Keidan, would have been aware of the likely confidentiality of the information, said the judge, adding that in any event both she and Reuters were on notice of the confidentiality of the information after contacting BHAM.
BHAM was more likely than not to establish that the information which it wanted to protect was confidential and that disclosure by Reuters would be an actionable breach of confidence.
Reuters had also argued that publication of the information would be in the public interest – but it was clear from Associated Newspapers Limited v HRH Prince of Wales ( Ch. 57) that it was not enough simply to it establish that there was a public interest in publication – there also had to be a public interest in breaching the confidence which attached to it.
In this case, maintaining confidentiality was “a weighty factor” – there was always an important public interest in observance of duties of confidence, and this was particularly important in the context of disclosure to potential investors of material which was relevant to their decision to invest – it was “highly desirable that full and candid disclosure is given for those purposes” .
The interest in protecting confidentiality was all the stronger where, as in this case, the disclosure was by a leading market participant and the investments at issue were measured in tens of millions of dollar.
There was also no question in this case of publication being necessary to correct a false impression created by BHAM, to reveal any illegal or immoral dealing, to expose hypocrisy or to expose some improper practice or concealment, or to demonstrate incompetence. The Judge said
“Material which might undermine BHAM’s public reputation is a matter of public interest but it lacks the weightier public interest which publication might carry if it were necessary to expose some behaviour on the part of BHAM which involved iniquity. In this case there has been no misleading self-promotion by BHAM which could justify a public interest in publication on the grounds that it would involve exposing hypocrisy or incompetence, still less deceit or some other form of iniquity. Publication would not be for the purposes of demonstrating any behaviour which is even arguably behaviour deserving of moral censure.” 
BHAM was more likely than not to establish at trial that it was entitled to restrain publication. As a result, the injunction was granted.
This article originally appeared on the online subscription service Media Lawyer and is reproduced with permission and thanks.