Case Summary and Outcome

The England and Wales Court of Appeal granted an interim injunction to prevent the Daily Telegraph from publishing a story that included confidential information obtained in breach of non-disclosure agreements. The case concerned five employees of a company group, which included ABC, who alleged that an executive of the group committed “discreditable” acts. The five eventually settled with the companies and signed non-disclosure agreements. In July 2018, a Daily Telegraph journalist contacted the company group for a comment on a story about allegations brought by the five employees. The call alerted the company that confidential information had been leaked, and the company subsequently sought an injunction to stop the Daily Telegraph from publishing the story, arguing that the newspaper obtained information in breach of confidence. A first instance court refused the request for an injunction. After balancing the rights to freedom of expression and confidentiality, the Appellate Court granted the injunction. It reasoned, among other things, that publishing the story would have adverse consequences and noted that the information in the story was obtained through a breach of non-disclosure agreements.

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Facts

“ABC and Others” (Claimants) represent two companies in the same group and a senior executive of the group. Five employees of the company group alleged that the executive was guilty of “discreditable” conduct. Three employees filed complaints against the executive using the companies’ confidential internal grievance procedures. When their grievance was not upheld, two of the three brought separate proceedings in the Employment Tribunal (the ET). An additional employee, who did not utilize the grievance procedure, also brought a proceeding to the ET.

All five employees entered into settlement agreements with the companies. The employees signed non-disclosure agreements (NDAs) that forbade them from disclosing the nature of the settlements. The employees had lawyers review the agreements before signing them.

On 16 July 2018, a Daily Telegraph journalist contacted the Claimants for a comment on a story about allegations brought by the five employees, settlement agreements signed by them, and the inclusion of NDAs in those agreements. Accordingly, the Claimants understood that either the five employees or someone else in the companies leaked confidential information. Immediately, the Claimants sought an injunction to stop the Daily Telegraph from publishing a story, arguing argued that the newspaper obtained information in breach of confidence.

On 13 August 2018, after a private (in camera) hearing, a judge refused to issue an interim injunction, citing five reasons:

1. The information in the Telegraph publication was reasonably credible.
2. There was little or no reasonable expectation of confidentiality or privacy in respect of the information.
3. A considerable amount of the information was already in the public domain.
4. The information was not obtained in breach of the NDAs.
5. Publication of the information was in the public interest.

The Claimants appealed the judgment on 25 September 2018.

At some stage before the Appellate Trial began, the five employees had been asked if information about their complaints should be published, even if they were not named. One said that s/he was happy for the complaint to be disclosed, provided s/he was not named. Two said that they supported the Claimants’ application for an injunction. One said they did not support the application.

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Decision Overview

The Court of Appeal issued an interim injunction and an order for a speedy trial.

The Court began by listing the relevant law and legal standards. Section 12 of the Human Rights Act 1998 (HRA) and Articles 8 (right to private life) and 10 (freedom of expression) of the European Convention on Human Rights were directly applicable here.

Under HRA’s Section 12, a court considering whether or not to grant an interim injunction to restrain a publication before trial had to consider the likelihood of success at the trial to restrict the publication. Plus, the court had to assess the extent to which journalistic material has or would become available to the public as well as the public interest in the publication.  Section 12 also required courts to consider any relevant privacy codes. The Court referenced precedent establishing that the principal purpose of Section 12 “was to buttress the protection afforded to freedom of speech at the interlocutory stage” (Cream Holdings Ltd v Banerjee).

The Appellate Court added that there was an important public interest in protecting confidentiality, and it had to be balanced against a countervailing public interest to publish. Further, according to the Court existence of a contractual agreement, provided it was entered into freely and without improper pressure, had an important role in the balancing exercise. Public policy reasons to uphold such contracts may outweigh rights protected by Article 10 of the European Convention on Human Rights. Particularly, the Court reasoned that when parties to confidentiality agreements benefited from expert legal advice before entering into a confidentiality agreement, “it would require a strong case for the court to conclude that the bargain was disproportionate and to refuse to enforce it other than on ordinary contractual or equitable principles.” [para. 26]

After laying out the applicable laws and legal standards, the Court proceeded by rebutting the five reasons offered by the first instance court, which refused to grant an interim injunction. It started with the fourth reason – the information was not obtained in breach of the NDAs. The Court concluded that it was likely that substantial and important parts of the information which the Telegraph wished to publish were passed to it in breach of a duty of confidence to the Claimants and that the newspaper was aware of the breach or the likelihood that there was a breach. The Court did not explain how it came to the conclusion, explaining that it outlined its reasoning in a closed judgment.

Then, the Court rejected the first reason – the information was reasonably credible. The Court did not go into the factual details, but explained that:

1. some of the allegations made by the Telegraph had been rejected by the Claimants;
2. the Claimants denied the most serious allegations brought by the employees, and employees lost the opportunity to have the veracity of their complaints determined by an independent tribunal since they had proceedings in front of the Employment Tribunal; and
3. the Claimants were also bound by the NDAs, making it difficult to respond to allegations made by the Telegraph.

Concerning the second reason, that there was little or no reasonable expectation of confidentiality or privacy in respect of the information, the Appellate Court found it was irrelevant. The real issue was whether, in light of the relevant facts, the public interest value of the information justified breaching confidentiality.

The Appellate Court also rejected the first instance court’s third reason, that a considerable amount of information was already publicly available. The Court felt that information in the public domain did not concern the most serious allegations brought by the five employees.

On the final reason – the publication was in the public interest, the Appellate Court explained that the first instance judge concluded that the information in question was capable of significantly contributing to a current debate of general public interest on misconduct in the workplace. The first instance court grounded its conclusions in jurisprudence of the European Court of Human Rights on political debate in a democratic society, especially when exercised by the media, and the essential role played by the press in a democratic society. (Gaweda v. Poland App no 26229/95, Hannover v. Germany (No 1),  Axel Springer AG v. Germany (No.2) and Hannover v. Germany (No 2)) The Appellate Court fully endorsed the first instance court’s position on the “the importance of freedom of political debate, the right of freedom of expression, the essential role played by the press in a democratic society, including contributing to debate on a matter of general interest, and the important public concern about misbehaviour in the workplace as well as the legitimacy of non-disclosure agreements and other legal devices for “gagging” disclosure by victims.” [para. 40]

However, the Appellate Court found that the first instance court failed to consider the important and legitimate role played by non-disclosure agreements in the consensual settlement of disputes. The Appellate Court conceded that some employers use NDAs unfairly to silence victims of sexual harassment. Here, however, the Court saw no evidence that any of the Settlement Agreements were procured by bullying, harassment or undue pressure by the Claimants. Plus, the employees had independent legal advisers who assisted them during the settlement process. Further, at least two of the five employees also wished to maintain confidentiality offered by the NDAs.

Following the rebuttal of the first instance court, the Appellate Court held that the proper course of action was to issue an interim injunction and an order for a speedy trial for the following reasons.

First, the Court explained that when considering the likelihood of success of the trial for the purposes of section 12(3) of the HRA, it had to assess the seriousness of the possible adverse consequences of disclosure prior to a disputed issue of fact being resolved at the trial. Here the Court found that there was a real prospect that the publication by the Telegraph would cause immediate, substantial and possibly irreversible harm to all of the Claimants.

Second, The Court concluded that according to available evidence, it was likely that the Claimants would establish at trial that a substantial part of the information was obtained through breach of duty of confidentiality to the Claimants, including in breach of the NDAs.

Third, the Claimants denied the most serious allegations, and their veracity could not be established prior to trial. Thus, if the Telegraph published the information, then the Claimants would have to challenge the allegations through the media, while constrained by the NDAs.

Fourth, there was no evidence that any of the Settlement Agreements were procured by bullying, harassment or undue pressure by the Claimants. The Court also noted that NDAs made as part of a settlement of a dispute benefited all parties to it. Here, two employees supported the Claimants’ application, and one expressly wished their privacy to be protected. If the Telegraph proceeded to publish the information, there was a high risk that it would be possible to identify these employees.

Fifth, the Court explained that it never doubted the importance of the role of the media but that it was only “one side of the scales in determining where the balance of the public interest lies on the particular facts of the present case.” [para.66]

On the basis of the above, the Court of Appeals found that there existed a sufficient likelihood of the Claimants defeating a public interest defense at trial, to justify the grant of an interim injunction.

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