In the recently decided case of ZXC v Bloomberg LP (2020), the Court of Appeal considered the misuse of confidential information and the right to privacy particularly in respect of the rights of a suspect in a criminal investigation.
ZXC v Bloomberg LP
Case background
ZXC was a successful business man and CEO of a division of a successful international business.
A UK Law Enforcement Agency (UKLEB) began an investigation into suspected bribery, corruption, offences under the Proceeds of Crime Act 2002 and the Fraud Act 2006, together with conspiracy to commit offences. At an early stage of the investigation, the UKLEB wrote to a foreign Government seeking assistance with investigating the offences. This letter was marked confidential but set out evidence gathered to that point, expressly mentioned ZXC as a suspect and some preliminary conclusions based on what had been discovered. At the time that the letter was sent, ZXC had not been arrested or charged with any offence.
Bloomberg, having obtained a copy of the letter, published an article about ZXC and the investigation. Simon LJ summarised the issues in this case as follows:
“The Claimant claims that he had a reasonable expectation of privacy in relation to the following matters contained in the Article (the ‘Information’): (1) the fact that in its investigations into the Claimant the UKLEB had asked the authorities in the Foreign State to provide banking and business records relating to four companies within a specified period; and (2) the details of the matters that the UKLEB was investigating in relation to the Claimant, including that, (a) the UKLEB considered that the Claimant had provided false information to the X Ltd board on the value of an asset in a potential conspiracy, (b) the UKLEB believed that the Claimant had committed fraud by false representation by dishonestly representing that [name] was a valuable asset based on data for a 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 crime carried out by the Claimant.”
The case originally included allegations under the Data Protection Act 1998 and for breach of confidence but these were abandoned as the Claimant realised that if he failed in arguing a right to privacy, these heads of claim would also fail. The Court considered Article 8 of the European Convention of Human Rights (right to private and family life) and Article 10 (right to freedom of expression). The Judge at first instance had found in favour of ZXC and awarded him £25,000 in damages. Bloomberg appealed.
The approach when considering such issues is in two stages.
Stage one
Stage one involves an analysis of:
‘what a reasonable person of ordinary sensibilities would feel if he or she were placed in the same position as the claimant and faced with the same publicity…If there is no ‘reasonable expectation of privacy’ or ‘legitimate expectation of protection’ (the tests being synonymous) in relation to the matter of complaint, there is no relevant interference with the personal autonomy of the individual and article 8.1 is not engaged, see In re JR38 (above) Lord Toulson at [88] and Lord Clarke of Stone-cum-Ebony at [105]. If there is such an expectation, it is for a defendant to justify the interference with the claimant’s privacy at stage 2 of the enquiry’.
Simon LJ commented that ’in general, a person does have a reasonable expectation of privacy in a police investigation up to the point of charge’ and considered the various grounds of appeal submitted on Bloomberg’s part and having dismissed them all he held that he ’would conclude, in agreement with the Judge, that the threshold of seriousness was passed and 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’.
Stage two
The second stage as set out by Simon LJ as follows:
“…whether in all the circumstances the interests of the owner of the private information must yield to the right of freedom of expression conferred on the publisher by article 10? The fact that this enquiry is commonly referred to as ‘the balancing exercise’ illustrates that this is primarily a matter for assessment by the trial judge.”
In considering this balancing exercise some of the factors that the court must consider include:
“(1) contribution to a debate of general interest, see also [106] above;
(2) how well-known is the person concerned and what is the subject of the report;
(3) the prior conduct of the person concerned;
(4) the method of obtaining the information and its veracity; and
(5) the severity of the sanction imposed: the proportionality of the interference with the exercise of the freedom of expression.”
In respect of this second stage, the Judge at first instance found that ‘in considering the respective justifications for interference with the Claimant’s article 8 rights and Bloomberg’s article 10 rights, the Judge concluded that interference with the latter was necessary and proportionate to secure the legitimate aim of protecting the Claimant’s reasonable expectation of privacy in the highly confidential information concerning the UKLEB’s on-going investigation’. After considering Bloomberg’s various grounds of appeal in respect of this stage, Simon LJ agreed with the Judge at first instance and in doing so dismissed the appeal brought by Bloomberg leaving the original judgment in favour of ZXC to stand.
How Nelsons can help
Kevin Modiri is a Partner in our expert Dispute Resolution team.
If you have any questions in relation to the subjects discussed in this article, please contact Kevin or another member of the team in Derby, Leicester or Nottingham on 0800 024 1976 or via our online form.