No anonymity for bankers involved in Libor scandal

30 January 2013 by Rosalind English

Graiseley Properties Ltd and others (Claimants) v Barclays Bank Plc (Defendant); Various employees and ex-employees of Barclays Bank plc and Telegraph Group and others (interveners) [2013] EWHC 67 (Comm) 21 January 2013 – read judgment

The Commercial Court has resisted an application to anonymise those individuals at Barclays involved in the LIBOR scandal.

In his firm dismissal of the arguments Flaux J has confirmed the principle that anonymity orders will only be made in cases where the applicant for the order has established that it is strictly necessary for the proper administration of justice. The employees’ claim they should remain anonymous until trial failed at the first hurdle, “because they had simply not established by clear and cogent evidence, or at all, that the order they seek or any aspect of it is strictly necessary for the proper administration of justice.”

Background

The main action concerned allegations by the claimants that they had been induced to enter the loan agreements and related hedging transactions by fraudulent misrepresentations by the defendant (Barclays); that the respective interest rates under those contracts were being set by reference to LIBOR, an independent benchmark of the British Bankers Association, whereas Barclays was in fact making false and misleading submissions to the BBA and was manipulating or attempting to manipulate LIBOR.

In one of the interlocutory hearings, to ensure that the issues of disclosure were properly ventilated, the judge ordered Barclays to use its best endeavours to disclose to the court and the claimants’ lawyers two lists: (a) the so-called Short List identifying and stating the position within Barclays of the 25 people that Barclays believed were the ones being referred to in the Notices in respect of Libor and (b) the so-called Long List identifying and stating the position within Barclays of the 207 people (which included the 25 on the Short List) of employees whose emails had been called for and reviewed by the various regulators.

David Pannick QC, representing the employees concerned, argued that publication of names would prejudice those individuals who were at risk of becoming subject to regulatory and criminal proceedings here or in the United States and that it would be unfair for the individuals to be named particularly in circumstances where the regulators have taken care to avoid this. He therefore sought an order that the names of the individuals and particulars of any individual which might lead to his or her identification, together with the two lists and the code or key to be used at any hearing should not be published other than to the parties and their legal advisers and any actual or potential witness or expert. Anonymity of the individuals was sought to be preserved by orders that they only be referred to in open court by a code or key or numbering

Legal Framework

The law in this area is underpinned by the fundamental principle  of open justice, a general rule (now reflected in CPR 39.2)  that all hearings, whether interlocutory or at trial, are public. The principle is included in the constellation of fair trial rights contained in Article 6 of the Convention. Some uncertainty has hovered over the application of this rule to interlocutory hearings, with the Strasbourg Court in some cases disapplying the principle on the basis that such interim procedures do not “determine civil rights and obligations” of the applicant.  But Article 6 does apply when the character of the interim decision “exceptionally requires otherwise because the measure requested was drastic, disposed of the main action to a considerable degree, and unless reversed on appeal would have affected the legal rights of the parties for a substantial period of time”. The media interveners referred to the recent decision of Micallef v Malta (2010) 50 EHRR 37 where the Strasbourg Court seemed to be “rowing back”  from the position in the earlier cases that Article 6 was not engaged in interlocutory proceedings. But Flaux J was not convinced of the relevance of this:

I agree with [counsel for the interveners] that this is of little if any significance, since the exception to open justice set out in the closing lines of Article 6.1 is essentially the same exception as applies at common law.

In any event, the judge could “see no principled basis” for distinguishing interlocutory hearings from trials and for applying some less stringent and vigilant approach to interlocutory hearings.

The European Convention

The interveners also argued  that individuals could not invoke Article 8 rights in this context because the case concerns their professional activities rather than their private lives.

As for Article 10, the importance of the press being able to report details of trials on matters of public interest such as the operation of the secret service and the Thalidomide case has been underlined in two early Strasbourg rulings (The Sunday Times v United Kingdom (No.2) (1991) 14 EHRR 229 “Spycatcher”and Times Newspapers Ltd v UK  (1979) 2 EHRR 245). The right includes being able to name individuals involved in the proceedings rather than simply referring to anonymous people in a disembodied way. This is an aspect of the right of freedom of expression which is recognised by the Supreme Court in Re Guardian News and Media [2010] UKSC 1 in which Lord Rodger of Earlsferry asked the question, “What’s in a name?” A lot, the press would answer:

This is because stories about particular individuals are simply much more attractive to readers than stories about unidentified people. It is just human nature. And this is why, of course, even when reporting major disasters, journalists usually look for a story about how particular individuals are affected. Writing stories which capture the attention of readers is a matter of reporting technique….A requirement to report it in some austere, abstract form, devoid of much of its human interest, could well mean that the report would not be read and the information would not be passed on

The Court’s reasoning

There is not some general exception to the principle of open justice, to protect non-parties from identification in proceedings to avoid the risk of reputational harm. The cases advanced on behalf of the individuals seeking anonymity were an “unreliable foundation” for such an exception:

Indeed, the sort of anonymisation for which Lord Pannick appeared to be contending would subvert the normal process of open justice in many different types of case where allegations of wrongdoing are being made. In the context of cases in the Commercial Court an obvious example would be the marine insurance case where the insurers’ defence is that the ship was scuttled at the behest of the owners by some of the crew. Lord Pannick’s approach would enable the crew (both those implicated in wrongdoing and those innocent of wrongdoing) to obtain an anonymity order in circumstances where they were saying that it was unfair that they should be named without an opportunity to respond. If that were the correct approach such orders would soon become the norm at least at the interlocutory stages in very many cases in the Commercial Court and other courts for that matter and the principle of open justice would soon be subverted.

and indeed,

the involvement of Barclays in manipulation of LIBOR is only one part of a much bigger picture concerning the manipulation of LIBOR by a substantial number of banks. Contrary to Lord Pannick’s submission that there is no competing public interest capable of justifying the prejudice and unfairness which the individuals assert they would suffer, there is a legitimate public interest in the true picture in relation to the manipulation of LIBOR by banks generally, not just Barclays, being brought fully to light.

In Flaux J’s judgment, fair and accurate media reporting of all aspects of LIBOR manipulation, including the involvement of employees and ex-employees of Barclays and their identity, is an important aspect of the public obtaining that true picture.

So now we know:  the proper administration of justice does not include protecting people from reputational harm emerges from a number of authorities, nor does the proper administration of justice encompass the private welfare of those caught up in that administration. This was a point made by Lord Atkinson in  Scott v Scott [1913] AC 417 at 463:

“The hearing of a case in public may be, and often is, no doubt, painful, humiliating, or deterrent both to parties and witnesses, and in many cases, especially those of a criminal nature, the details may be so indecent as to tend to injure public morals, but all this is tolerated and endured, because it is felt that in public trial is to found, on the whole, the best security for the pure, impartial, and efficient administration of justice, the best means for winning for it public confidence and respect. …

The public has a legitimate interest in learning who in the banking community is alleged to have been implicated in the manipulation of LIBOR.  There is “simply no justification” for saying that the disclosure of that information to the public should have to await the conclusion of a trial.

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