Cyber Security / Cyber Crime, Defamation / Reputation, Press Freedom, Privacy, Data Protection and Retention
A.B. v. Bragg Communications
Closed Contracts Expression
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The Supreme Court of the United Kingdom unanimously dismissed an appeal holding the Appellant liable for violation of respondent’s right to privacy in relation to information relating to a criminal investigation into his activities. The Respondent, ZXC, and his employer were the subject of a criminal investigation by a UK Legal Enforcement Body. The Appellant, Bloomberg, obtained a copy of the confidential Letter of Request sent by the enforcement body to a foreign state seeking information and documents relating to the respondent, and published an article referring to the fact that information had been requested in respect of the Respondent and detailing the matters in respect of which he was being investigated. The Supreme Court held that a person under criminal investigation has, prior to being charged, a reasonable expectation of privacy in respect of information relating to that investigation. It reasoned that a balancing exercise must be done in such cases to determine whether respondent’s Article 8 right to privacy or the publisher’s Article 10 right to freedom of expression should prevail, with neither of the right having the right of precedence over the other.
The Appellant, Bloomberg LP, is an international financial software, data and media organisation headquartered in New York and renowned for its financial journalism and reporting, whereas the Respondent (“ZXC”) is a citizen of the United States who worked for a publicly listed company which operated overseas in several foreign countries (“X Ltd.”). The respondent was the chief executive of one of its regional divisions.
While working for the company, the respondent and his employer were subjected to a criminal investigation by a UK Legal Enforcement Body (“UKLEB”) in 2013 pertaining to the integrity of various transactions involving X Ltd. Notably, UKLEB’s investigation concerned possible offences of corruption, bribery, offences under the Proceeds of Crime Act 2002, and various offences under the Fraud Act 2006 together with conspiracy to commit certain offences. During that investigation, in 2016, UKLEB sent a confidential 15-page Letter of Request (the “letter”) to the authorities of a foreign state, in accordance with the provisions concerning mutual legal assistance under the United Nations Convention against Corruption (the “Convention”). The letter sought, among other things, information and documents relating to ZXC, including banking and business records in relation to X Ltd. and a number of individuals, one of whom was the respondent. The letter also contained a detailed assessment of the evidence the UKLEB had so far obtained together with initial conclusions the UKLEB had reached on what it believed was demonstrated by the evidence. The Letter expressly requested that its existence and contents remain confidential with the following statement under the head of “Confidentiality”:
“… In order not to prejudice the investigation, I request that no person (including any of the above named subjects) is notified by the competent authorities in your country of the existence and contents of this Letter of Request and any action taken in response to it. […]
The reason for requesting confidentiality is that it is feared that, if the above suspect [sic] or an associated party became aware of the existence of this request or of action taken in response to it, actions may be taken to frustrate our investigation by interference with documents or witnesses. […]”
A Bloomberg journalist nevertheless obtained the copy of the letter, and Bloomberg published an article in the autumn of 2016 (“autumn article”) which explained that the respondent had been interviewed by the UKLEB as part of its investigation. The article also referred to the fact that information had been requested in respect of the Respondent relating to the activities of X Ltd. in a particular country for which the respondent’s division was responsible. In particular, the article revealed confidential information on two counts:
(i) the fact that the UKLEB had asked the authorities of the foreign state to provide banking and business records relating to four companies in its investigations into the respondent (and others) and wanted the information about the respondent from the foreign government; and
(ii) the details of the deal that the UKLEB was investigating in relation to the respondent, including that: (a) the UKLEB considered the respondent had provided false information to the X Ltd.’s board on the value of an asset in a potential conspiracy to which another named officer of X Ltd. may have been complicit; (b) the UKLEB believed that the respondent had committed fraud by false representation by dishonestly representing that [name] was a valuable asset based on data for an entirely different asset; and (c) the UKLEB was seeking to trace the onward distribution of [a substantial sum of money] paid into [a bank account] as it believed that these monies were the proceeds of a crime carried out by the respondent.
Bloomberg had also made contact with UKLEB prior to publication and was informed by the enforcement body that “the publication of material pertaining to a LoR will pose a material risk of prejudice to a criminal investigation” [para. 18-20].
The respondent sought an interim injunction restraining publication of the article but was refused by a judgment dated February 2, 2017. The reserve judgment specifically noted that it was likely that any infringement of the respondent’s privacy rights under Article 8 of the European Convention on Human Rights (“ECHR”) would be held to be outweighed by Bloomberg’s right to freedom of expression under Article 10 of the ECHR [ZXC v. Bloomberg LP  EWHC 328 (QB)].
However, the respondent’s application for damages and injunctive relief on the grounds of misuse of private information was successful in a subsequent decision by Nicklin J. dated April 17, 2019 [ZXC v. Bloomberg LP  EWHC 970 (QB)]. The judge in that case found that contrary to the 2017 decision, a person does have a reasonable expectation of privacy in a police investigation up to the point of charge. He also noted that the issue of corruption in the foreign state and possible involvement in that corruption by X Ltd. and its employees/officers was a matter of “high public interest”, and thus, a balancing exercise between the respondent’s Article 8 right to privacy and the publisher’s Article 10 right to freedom of expression was required. Having carried out this balancing exercise, the judge concluded that Bloomberg had not (either individually or collectively) provided sufficient countervailing justification to outweigh the respondent’s reasonable expectation of privacy. On the contrary, “the public interest clearly favoured upholding and maintaining the confidentiality of the information in the LoR” [para 32]. The view of Nicklin J. was upheld in the judgment delivered by the Court of Appeals which dismissed all grounds forwarded by the appellant.
Bloomberg thus appealed to the Supreme Court.
Lord Hamblen and Lord Stephens (with Lord Reed, Lord Lloyd-Jones and Lord Sales concurring) delivered the judgment of the UK Supreme Court. The principle issue before the Court was whether, and to what extent, a person who has not been charged with an offence can have a reasonable expectation of privacy in relation to information that relates to a criminal investigation into their activities.
Article 8 of the ECHR provides for a right to respect for private and family life, subject to certain restrictions. Article 10, on the other hand, grants everyone the right to freedom of expression, including freedom to hold opinions and to receive and impart information and ideas without interference by public authority. Section 12 of the Human Rights Act 1998 (“HRA”) contains specific provisions regarding journalistic material, requiring courts to give regard to the right to freedom of expression in ECHR, to the extent to which the material has, or is about to, become available to the public; or is, or would be, in the public interest for the material to be published.
The Court cited Murray v Express Newspapers plc  EWCA Civ 446 to reiterate the well-established two-stage test to determine if there has been a misuse of private information. According to it, at stage one, the question is whether the respondent has a reasonable expectation of privacy in the relevant information considering the circumstances of the case. Such circumstances are likely to include, but are not limited to, those identified in the Court of Appeal’s decision in Murray (“Murray Factors”). If so, at stage two, the question is whether that expectation is outweighed by the countervailing interest of the publisher’s right to freedom of expression. This involves a balancing exercise between the respondent’s Article 8 ECHR right to privacy and the publisher’s Article 10 ECHR right to freedom of expression, having due regard to section 12 of the U.K. Human Rights Act 1998.
Stage 1 Analysis:
The court first considered whether the decision of the Court of Appeal was correct in holding whether a person under criminal investigation has, prior to being charged, a reasonable expectation of privacy in respect of information relating to that investigation. It affirmed that certain types of information can be regarded as giving rise to a reasonable expectation of privacy, including inter alia, personal financial and tax related information; personal communications and correspondence; past involvement in criminal behaviour; and involvement in crime as a victim or a witness. Whereas, some other types of information will not normally trigger reasonable expectation of privacy, such as for instance, corporate information, involvement in current criminal activity, a person’s mis-performance of a public role, information deriving from a hearing of a criminal case conducted in public, and the identity of an author. The court also noted that a relevant circumstance will be the extent to which the information is in the public domain [para. 52-55].
Bloomberg advanced four arguments challenging the general rule or “legitimate starting point” (as Court of Appeals had noted) that a person under criminal investigation has, prior to being charged, a reasonable expectation of privacy in respect of information relating to that investigation.
Presumption of innocence:
Bloomberg submitted that given the public’s ability to observe the presumption of innocence, the application of a general rule is not proper as it exaggerates the extent to which publishing the information can cause damage to the respondent’s reputation. Consequently, Bloomberg argued that lower courts significantly overstated the capacity of publication of the information to cause damage to the respondent’s reputation given the public’s ability to observe the presumption of innocence.
In this regard, the Supreme Court underscored that presumption of innocence was a legal presumption applicable to criminal trials, where the presumption weighs heavily in the directions that a jury is given or in the self-directions that a judge sitting alone applies. However, in this case, the context was different: the question being how others, including a person’s inner circle, their business or professional associates and the general public, will react to the publication of information that that person is under criminal investigation. Relying on jurisprudence, the court concluded that 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. Accordingly, the court rejected the appellant’s submission. [para. 100-109]
Bloomberg argued that the lower courts’ reasoning to uphold the general rule of privacy, namely the “human characteristic” to equate suspicion or investigation with guilt on the assumption that there is “no smoke without fire” [para. 74] was contrary to established principles of defamation law which states that an ordinary individual is not unduly suspicious and is capable of distinguishing suspicion or investigation from guilt. As a result, Bloomberg argued that the court incorrectly applied the test of an unduly suspicious hypothetical reader, who always adopts a “bad meaning”.
On this front, the court noted that since ZXC did not bring a claim for defamation, the case did not stand. The respondent’s claim pertained to the tort of misuse of private information which was a separate tort with different constituent elements and a distinct purpose, unlike in defamation where the purpose of the tort of misuse of private information is not only to protect an individual from the publication of untrue information but also to protect an individual’s private life in accordance with Article 8 ECHR, regardless of the truth or falsity of the information. The court considered it inappropriate to read across the concept of a hypothetical reader from the tort of defamation into the tort of misuse of private information and thus, rejected this submission [para. 110-113].
Bloomberg submitted that the lower courts were incorrect to hold that information of an individual being subject to criminal investigation is private because it is potentially damaging to his/her reputation. On the contrary, it argued that such information is not protected because of its effect on a person’s reputation, rather it is protected since it belongs to a part of the respondent’s life which is of no-one else’s concern.
However, the court considered this view of the protection afforded by Article 8 of the ECHR as “unduly restrictive”. Relying on Denisov v Ukraine (Application No. 76639/11) (unreported) 25 September 2018, S and Marper v United Kingdom (Application Nos. 30562/04 and 30566/04) (2008) 48 EHRR 50, Gillberg v Sweden (Application No. 41723/06) (2012) 34 BHRC 247 and Bărbulescu v Romania (Application No. 61496/08) (2017) 44 BHRC 17, it held that the term “private life” can also include principle activities of a professional or business nature. Thus, publication of information about an official criminal investigation into a person’s business activities can fall within the concept of “private life” under Article 8 ECHR. In holding this, the court also concluded that the notion of “private life” should cover a right to respect for reputation, and thus Article 8 applies, provided the attack on reputation attains a certain level of seriousness and prejudices a person’s right to respect for private life [para. 114-125].
Bloomberg also argued that while private life can include activities of a professional or business nature, the private character of those activities did not extend to a businessman who is actively involved in the affairs of large public companies, such as the respondent (relying on Fayed v United Kingdom (Application No 17101/90) (1994) 18 EHRR 393). This is because such individuals are not in that sector of their lives private “individuals”, but rather they knowingly lay themselves open to close scrutiny of their acts by the media. The court, however, noted that while the respondent’s status meant that the limits of acceptable criticism of him were wider than in respect of a private individual, there is nevertheless a limit. The factor is not determinative in itself and should only form part of the stage one analysis. The Supreme Court emphasized that consideration of “the attributes of the claimant (respondent)” must be balanced against the effect of publication of the information on him [para. 136-141].
Incorrect application of legal text:
Bloomberg claimed that the lower courts failed to apply the correct legal test at stage one analysis, which involved a consideration of “all the circumstances of the case” as against grant of pre-ordained weight to one circumstance (i.e. the effect on the respondent). Bloomberg argued that the lower courts incorrectly confined the Murray factor of “the nature of the activity in which the respondent was engaged” to the respondent being the subject of the UKLEB’s investigation. However, this analysis should have included other circumstances such as the activity in which ZXC was engaged, namely allegations of corruption in relation to ZXC’s company’s activities in a foreign country.
On this point, the court concluded that the application of a general rule did not mean that the lower courts did not give due consideration to the applicable Murray factors in their multi-factorial analysis, including ZXC’s status as a businessman involved in the affairs of a large public company. In fact, the nature of the activity in which ZXC was engaged was not a factor of particular significance in this case. The court held that lower courts were thus, correct to identify the activity as the criminal investigation in circumstances where the information which the respondent sought to characterise as private was the outcome of that investigation [para. 126-135].
Based on a consideration of all the circumstances and the weight attached to it, the Supreme Court held that there was a reasonable expectation of privacy in respect of information relating to that investigation.
Stage 2 analysis:
With respect to stage 2, the court considered 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 Bloomberg published information originating 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. As stated earlier, the court considered it a balancing exercise in order to determine whether Article 8 or 10 of the ECHR should prevail, with neither of the right having the right of precedence over the other. In doing so, the extent to which publication is in the public interest is of central importance, and is determined by looking at the contribution that publication will make to a debate of general interest.
The judge was right to treat the Letter’s confidentiality as a relevant and important factor at both stage one (in determining whether there was a reasonable expectation of privacy) and stage two (by placing reliance on the public interest in the observance of duties of confidence when carrying out the balancing exercise). However, neither the judge nor the Court of Appeal held that the Letter’s confidentiality itself rendered the information private or prevented Bloomberg from relying on the public interest on its disclosure. The court further held that while there is no necessary overlap between the distinct actions for misuse of private information and for breach of confidence, confidentiality and privacy will often overlap, and if information is confidential that is likely to support the reasonableness of an expectation of privacy [paras. 147-156].
Whether the Court of Appeal was wrong to uphold the findings of lower court that the respondent 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 respondent.
Given that the appeal was dependent upon Bloomberg establishing that the Court of Appeal erred in law on stage 1 and/or stage 2 analysis which was not the case, the court held that there was no grounds for intervening with the judge’s decision in relation to the balancing exercise [para. 157]. Accordingly, the appeal was dismissed.
Decision Direction indicates whether the decision expands or contracts expression based on an analysis of the case.
As held in Campbell v MGN Ltd  UKHL 22, the right to freedom of expression enshrined in Article 10 of the European Convention and the right to respect for a person’s privacy enshrined in Article 8 are vitally important rights. Both lie at the heart of liberty in a modern state and neither has precedence over the other. Bloomberg LP v ZXC is a landmark case in determining when a reasonable expectation of privacy arises in criminal investigations and the right balance that can be struck between protecting an individual’s right to privacy and preserving free expression. The case also touches on the crucial issue of the interplay between the torts of defamation and misuse of private information, specifically concerning use of misuse of private information claims as a vehicle for claiming damages for harm to reputation. Another important consequence of the case is the effect it will have on freedom of press – unlike Khuja v Times Newspapers Ltd  UKSC 49 where the Supreme Court strived to achieve a balance between Article 8 and Article 10 rights – the court in this case sought to lean in favour of the individual’s rights while under criminal investigation, in cases of an apparent conflict between right to privacy and right to freedom of expression.
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