In an important privacy judgment handed down on Friday 15 May 2020 in the case of ZXC v Bloomberg LP ([2020] EWCA 611) the Court of Appeal upheld Nicklin J’s finding that the publication of an article containing confidential information obtained from a UK law enforcement agency which was investigating a businessman was a misuse of private information.

The judgment is an important confirmation of the approach taken in a number of first instance decisions that, as a matter of general principle, individuals being investigated by law enforcement agencies have a reasonable expectation of privacy.  Such investigations can only lawfully be reported where there is a proper public interest justification.

Background

In 2013, a UK law enforcement body (“UKLEB”) announced a criminal investigation into a company (“X Ltd”). This was reported in the media as was the continuing investigation.  In 2016, Bloomberg published two articles naming the Claimant in connection with the investigation. The second, however, was based on a “confidential law enforcement document” – a letter of request (“LoR”) for mutual legal assistance from the UKLEB to a foreign country which specified X Ltd and identified ZXC.  The article reported on what was stated in the LoR.

Nine days after publication of the second article, ZXC’s solicitors asked Bloomberg to take it down. Bloomberg declined and ZXC issued an application for an interim injunction based on misuse of private information. This application was dismissed by Garnham J concluded that the weight attached to Bloomberg’s Article 10 rights outweighed ZXC’s Article 8 rights ([2017] EWHC 328 (QB)).  ZXC nevertheless pursued his claim for damages and a final injunction to full trial which took place on 27 to 30 November 2018.

In a judgment handed down on 17 April 2019 ([2019] EWHC 970 (QB)) Nicklin J found that the publication of information in the Article that UKLEB had asked the authorities of the foreign state to provide banking and business records relating to four companies in its investigations into the Claimant (and others) and wanted the information about the Claimant from the foreign Government and details of the deal that UKLEB was investigating in relation to the  Claimant was a misuse of private information (“the Information”, see [106]).

First, he held that the the Claimant had a reasonable expectation of privacy in the Information.  He considered the various factors set out in Murray v Express Newspapers plc [2009] Ch 481 [35] holding that

“by far the weightiest factor leading to my conclusion that the Claimant does have a reasonable expectation of privacy in the Information is the final factor: the circumstances in which and the purposes for which the information came into the hands of the publisher” [125](ii).

Relying on a series of earlier first instance decisions he held that, “in general, a person does have a reasonable expectation of privacy in a police investigation up to the point of charge” [119].

Second, Nicklin J considered that the “ultimate balance” between the Article 8 rights of the Claimant and the Article 10 rights of Bloomberg, finding that the privacy rights were not outweighed by the freedom of expression rights. Although there was general public interest in corruption in the foreign country connected to the allegations against X Ltd and in X Ltd itself, but that had little or no bearing on whether there was a public interest justifying the publication of the information in the article.  The Article was not presenting the fruits of Bloomberg’s investigation into the alleged corruption, it was only reporting on the contents of the Letter (which was highly confidential) and made no criticism of the UKLEB’s investigation.

Nicklin J granted the Claimant an injunction and awarded damages of £25,000.

On 20 June 2019 Bloomberg was granted permission to appeal on 9 grounds.  The appeal was heard on 3 and 4 March 2020 by Underhill, Bean and Simon LJJ.

The Judgment

The lead judgment was given by Simon LJ. After setting out the relevant background, he set out a summary of the law on misuse of private information ([38] to [42]).  It was common ground that liability for misuse of information is determined by applying a two-stage test found in McKennitt v. Ash [2008] QB 73 (CA) [11]: Stage One, is the information private in the sense that it is in principle protected by article 8?  Stage Two, in all the circumstances, must the interest of the owner of the private information yield to the right of freedom of expression conferred on the publisher by article 10?

Simon LJ first dealt with Stage One ([43] to [103]).  After considering general principles, he considered the crucial issue as to whether a person has a reasonable expectation of privacy in relation to a police or similar inquiry.

Following consideration of a number of first instance decisions, in particular, Richard v BBC ([2019] Ch 169), he concluded

“Since the matter arises for decision in the present case, I would take the opportunity to make clear 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” [82].

Simon LJ went on to say that this reasonable expectation of privacy was not, in general,

“dependant on the type of crime being investigated or the public characteristics of the suspect (for example, engagement in politics or business). The crime need not be sexual … and I see no good reason why suspicion relating to a crime concerning business dealings should be an exception to a salutary general approach which is founded on the preliminary stage of a state enforcement agency enquiry into what may or may not lead to a charge. To be suspected of a crime is damaging whatever the nature of the crime: it is sensitive personal information and there can be little justification for a hierarchy of offences giving rise to suspicion” [84]

He accepted however, that there were cases in which the public nature of the activity under consideration (rioting or electoral fraud) would significantly reduce or even extinguish the reasonable expectation of privacy.

As a result, Simon LJ rejected the first five grounds of appeal and concluded, in agreement with Nicklin J that a reasonable person of ordinary sensibilities, placed in the position of Claimant, would have had a reasonable expectation of privacy in relation to the Information [102].

Stage Two was dealt with more briefly ([103] to [140]).  Simon  LJ described Nicklin J’s analysis of the factors weighing in favour of the Claimant’s Article 8 rights and Bloomberg’s countervailing Article 10 rights as “thorough and nuanced” ([117]).  He considered and rejected Bloomberg’s four grounds of appeal in relation to the weighing of Articles 8 and 10.

Underhill LJ gave a concurring judgment, specifically agreeing with [82] and [84].  He said that the balance at Stage two may have been a fine one but the Court could not interfere with how it was struck by the Judge as he did not misdirect himself.

He emphasised the importance of the distinction between publishing allegations of misconduct and information that an individual is the subject of a formal criminal investigation.  The former does not attract a reasonable expectation of privacy whilst the latter does.

“information that an individual is the subject of a formal criminal investigation is genuinely of a of different character from allegations about the conduct being investigated” [150]

Bean LJ agreed with both judgments.

The appeal was, therefore, dismissed with costs. Bloomberg applied to the Court of Appeal for permission to appeal to the Supreme Court and the decision is awaited.

Comment

This is the most important privacy decision of 2020 so far.  It confirms that an individual who is being investigated by a law enforcement body has a reasonable expectation of privacy in the fact and details of such an investigation.  This provides a crucial extra level of protection for the rights of criminal suspects whose lives have, in the past, often been several damaged by media reporting of what has turned out to be unfounded police suspicions.

This is an issue which has been disputed between claimants and the media since the decision in Hannon v. News Group Newspapers Ltd ([2015] EMLR 1).  By this decision the Court of Appeal has confirmed, for the first time, the general rule developed in a series of first instance decisions over the past six years.  The position is summarised at [82] cited above.  Although not the subject of argument (because it was not an issue) the Court proceeded on the basis that this reasonable expectation came to an end on charge.

In addition, to establishing the general principle of the privacy of law enforcement investigations, the case also disposes of another argument frequently relied on by defendants.  For the purposes of the law of privacy, no distinction can be drawn between “private” criminal offences (such as the one in issue in the Cliff Richard case) and “business” offences (in issue in the present case).  There is no “hierarchy of offences”: all criminal investigations are, prima facie, private.  The only possible exception is where the activity which gave rise too the suspicion was irreducibly public (see [84]).

It is important to note that the “general principle” confirmed by the Court of Appeal does not mean that the media cannot report on criminal investigations, it simply establishes a presumption of privacy that can be displaced by “public interest” considerations. Thus, for example, if the individual under investigation is a politician or someone with weighty and immediate public responsibilities then the “stage two” considerations may favour publication.

There are two other kinds of publication, which are closely related to but crucially different from reports of criminal investigations or arrests.

First, there is the reports of allegations of criminal wrongdoing. The fact that an individual is alleged by someone else to have committed a crime is not in general private (though, in may be, depending on the alleged circumstances of the offence).  As a result, “public interest justification for the publication of such allegations is not required (although it may, of course, give rise to a risk of a defamation claim).

Second, there is the reporting of the actions of law enforcement authorities. The law of privacy does not protect the activities of public authorities. Provided that they do not identify individuals, such reports are not affected by the decision.

The decision will not please everyone: The Society of Editors has complained about a “chilling effect” and a “fog of confusion”.  Nevertheless, most practitioners will welcome this clear ruling on an important area of privacy law.  Both suspects and the media now know where the lines are drawn.

Hugh Tomlinson QC is a member of the Matrix Chambers media and information practice group.