Philip Green and non-disclosure agreements: do we have a right to know?

30 October 2018 by

The circumstances in which a court should prevent the press from reporting information about famous people has long provoked debate. The decision of the Court of Appeal in ABC & Ors v Telegraph Media Group Ltd [2018] EWCA Civ 2329 is no exception, attracting extensive press coverage and comment from the #MeToo movement.

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In a unanimous judgment, the Court of Appeal overturned the decision of Mr Justice Haddon-Cave in the High Court and granted an interim injunction to the Appellants/Claimants.

The decision had the effect of temporarily restraining publication of certain information which was alleged by the Claimants to be confidential and disclosed in breach of non-disclosure agreements – namely allegations of sexual and racial harassment made against a well-known (and at the time unidentified) leading businessman – pending a full trial.

However, Lord Hain then went on to disclose under Parliamentary privilege that the accused businessman was Sir Philip Green. He said that given the “serious and repeated” nature of the allegations he felt under a “duty” to name him, and publication of this information was “clearly in the public interest”.

Two issues are therefore worthy of consideration: (1) why did the Court of Appeal strike the balance between the public interest in publication and maintaining confidentiality in the way that it did? (2) what is the relevance of the decision now?

 

(1) The balance between the public interest in publication and protecting the duty of confidence

The Court of Appeal noted that the interim injunction had been sought to restrain the publication of information which the Claimants alleged had been obtained in breach of confidence (at §8). Section 12 of the Human Rights Act (“HRA”) and Article 10 of the European Convention on Human Rights (“ECHR”) were therefore directly engaged.

Section 12 HRA provides that where a court is considering whether to grant any relief which, if granted, might affect the exercise of the Convention right to freedom of expression:

(3) no relief is to be granted so as to restrain publication before trial unless the court is satisfied that the applicant is likely to establish that publication should not be allowed.

The court must also have

(4) … particular regard to the importance of the Convention right to freedom of expression… and to (a) the extent to which – (i) the material has or is about to become available to the public; or (ii) it is, or would be, in the public interest for the material to be published.

The Court of Appeal considered case law laying down more detailed guidance as to what this test should mean in the present context – and in so doing, gave particular emphasis to two factors which should weigh in the balance and which appear to have influenced the outcome in this case: first, the potential consequences of adverse disclosure, and second, the public interest in the observance of duties of confidence, including by reference to the nature of the information in question and whether there is an express contractual obligation of confidence.

Firstly, the Court of Appeal noted that the test of “likely” in section 12(3) was considered authoritatively in Cream Holdings Ltd v Banerjee [2004] UKHL 44, [2005] 1 AC 253. In that case, it was held that whilst the Parliamentary intention was clearly to emphasise the importance of freedom of expression at the interlocutory stage — such that there was a “higher” threshold for the grant of injunction in the s12(3) context than would otherwise arise — there would be cases where “a lesser degree of likelihood would suffice”.

Lord Nicholls in Cream Holdings had indicated that one type of case might be

where the adverse consequences of disclosure would be extremely serious, and where the interests of justice will be best served by a restraint on publication until a disputed issue of fact can be resolved at trial (§16).

Secondly, the Court of Appeal noted that in HRH Prince of Wales v Associated Newspapers Ltd [2006] EWCA Civ 1776, [2008] Ch 57, the relevant principle was identified as whether “it is in the public interest that the duty of confidence should be breached” by reference to “all the relevant circumstances”. Ultimately, this was a “test of proportionality”.

The Court went on to stress that the weight which should attach to an obligation of confidence may be enhanced where the obligation is contained in an express contractual agreement.

This consideration would be significant “where there was an agreement to compromise or avoid the need for litigation”: provided that an agreement is

freely entered into, without improper pressure or any other vitiating factor, and with the benefit of independent legal advice … the public policy reasons in favour of upholding the obligation are likely to tell with particular force and may well outweigh the article 10 rights of the party who wishes to publish the confidential information (§24).

Applying the interim injunction test within these identified parameters, the Court ultimately concluded that publication before trial in this case would cause a “real prospect” of “immediate, substantial and possibly irreversible harm to the appellants.”

The first reason was that the Court of Appeal, when reviewing in closed judgment the available evidence, disagreed with the Judge and found that it was likely that substantial parts of the information in question had been obtained in breach of the duty confidence and that it was likely that the Telegraph had been aware of this.

Secondly, the Court of Appeal noted several factors going against the credibility of the information that was to be published: some of the allegations had been addressed and rejected in detail; the most serious allegations had been denied and the settlement of the Employment Tribunal claims meant that the opportunity to have these judicially determined had been lost; and the existence of non-disclosure agreements (“NDAs”) meant that the Claimants would struggle to rebut the Telegraph’s allegations were publication to be permitted, since they were also bound by the NDAs.

Thirdly, it was likely that the Claimants would establish that the confidentiality attaching to a substantial part of the information had not been lost through being released in to the public domain.

At the heart of the proportionality balance was the Court of Appeal’s view that whereas the judge had concluded that publication could significantly contribute to the public interest in debate on misconduct in the work place and outweigh the interest in protecting confidentiality, he had

left entirely out of account the important and legitimate role played by non-disclosure agreements in the consensual settlement of disputes (§41).

The Court of Appeal recognised the rise in public concern about misbehaviour in the workplace and the legitimacy of NDAs and other legal devices for “gagging” disclosure by the victims. However, it stressed that, unlike often criticised NDAs, including those referred to in the Report of the House of Commons Women and Equalities Select Committee report “Sexual Harassment in the Workplace” (HC275), there was

no evidence that any of the Settlement Agreements were procured by bullying, harassment or undue pressure by the claimants. Each employee received independent legal advice before entering in to the Settlement Agreement. They did not fall within the criticism of the WESC Report (§61).

Moreover, the Court highlighted that the report had also noted that “NDAs made as part of a settlement would often be for the benefit of all parties to it”. The Court noted that

the employee may have as much concern to maintain confidentiality as the employer. The employee may not wish details of the dispute and the terms on which it was settled to be disclosed more widely for a variety of reasons, such as to maintain personal privacy or in case it might affect future employment opportunities or for financial reasons (§63).

Two of the complainants in the present case had in fact supported the application, one giving the express reason that they wished their privacy to be protected – the court noted that

there must be a high risk that it will be possible to identify them if the Telegraph publishes particulars relating to their allegations (§64).

These twin features of the NDAs in this case – the lack of evidence that they were entered in to under undue pressure, and the fact that they were likely of mutual benefit to the parties involved – appear to have contributed significantly to the more limited weight given by the Court of Appeal to the public interest in publication, and so ultimately to the direction in which the scales tipped in this case.

Ultimately, whilst the importance of the role of the media “was not in doubt”, it was “only one side of the scales” in determining where the public interest lies (§66). Bearing in mind (and notably not wholeheartedly endorsing) Lord Nicholls’ observations about the “flexibility” of the use of the “likely” criterion (§59) in this type of case, the Court of Appeal concluded that on the information available it was unlikely that the Claimant’s enforcement of their right to confidentiality would be defeated at trial by a defence of public interest: the limited information available suggested it is likely that the Claimants will establish that the information was acquired with knowledge of the NDAs and in breach of either the NDAs or by employees who were aware of them (§66).

 

(2) What is the relevance of the decision now?

It is important to note that the findings of the Court of Appeal only apply to the decision whether or not to grant a temporary interim injunction: the Court emphasised that the policy considerations and their application in the present case would be best considered comprehensively following a trial, where evidence could be brought forward by either side (§67). Any of the court’s findings are therefore not necessarily final.

The decision of Lord Hain to name Sir Philip Green using Parliamentary privilege has been described as constitutionally improper, and attention has been drawn to the risk that it flouts or even renders useless the judicial decision. However, it is also worth remembering that the extent of “disclosure” by comparison to that which might arise following media publication is arguably more limited in scope – the detailed particulars of the allegations and the terms of the Settlement Agreements, which as the Court of Appeal noted may risk identification of complainants, have not been made public, though the risk of identification has increased.

Once the case proceeds to trial, we can likely expect further judicial comment regarding the weight to be given to public concern about misbehaviour in the workplace, the legitimacy of NDAs and other legal devices for “gagging” disclosure and whether there is a public interest in publication in this case which can outweigh the Claimant’s interest in maintaining the duty of confidentiality. For now, and perhaps more importantly, the case and the associated Parliamentary and media comment has re-invigorated this vital and challenging democratic debate.

 

Charlotte Gilmartin is a barrister at One Crown Office Row.

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