Reputation management during investigations: ZXC v Bloomberg LP

The Court of Appeal has upheld the decision of Nicklin J which found that Bloomberg had breached the privacy rights of a US businessman when it published an article containing confidential details about a UK criminal investigation which he was subject to. This decision confirms that in general a person has a reasonable expectation of privacy about the fact that they are subject to a police investigation unless and until that person is charged with an offence.

Summary of Facts

The Claimant was the Chief Executive of one of the regional divisions of X Ltd. A UK legal enforcement body (the UKLEB) began an investigation into X Ltd following concerns about the integrity of various transactions involving the company in various jurisdictions.

The UKLEB made a letter of request (LOR) to the competent authority in another jurisdiction under the mutual legal assistance scheme. Despite being highly confidential, somehow this LOR made its way into the hands of a Bloomberg employee. Bloomberg went on to publish an article containing information drawn almost exclusively from the LOR. The article contained details about the investigation and in particular about the role of the Claimant in a number of possible offences including corruption.

The Claimant claimed that he had a reasonable expectation of privacy in relation to the information in the article. Bloomberg was asked by the Claimant’s solicitors to take the article down from their website. Bloomberg declined to do so and the Claimant applied for an injunction. At a hearing in February 2017, Garnham J refused to grant an injunction.

The Claimant issued a claim for misuse of personal information and the trial took place in November 2017 before Nicklin J. It became clear at this trial that Bloomberg had failed to disclose to the court and the Claimant in February 2017 that they had a copy of the LOR and that the UKLEB had protested about the publication of the contents of the LOR. Nicklin J commented that had Garnham J been provided with this information he would likely have granted the injunction. Nicklin J found for the Claimant that the Defendant had misused his private information and granted an injunction and an award of damages of GBP25,000. Bloomberg appealed to the Court of Appeal.

The decision

The leading judgment of Simon LJ set out the familiar two stage test from McKennitt v Ash [2008] QB 73 (CA) at [11] for a misuse of private information claim:

• First, is the information private in the sense that it is in principle protected by article 8?
• Second: in all the circumstances, must the interest of the owner of the private information yield to the right of freedom of expression conferred on the publisher by Article 10?

Stage 1: general and reasonable expectation of privacy

In relation to stage 1, the principal issue was: whether a person can have a reasonable expectation of privacy in the fact and the details of a police investigation, or an equivalent enquiry by an authorised prosecuting authority into what was essentially a business transaction.

Simon LJ agreed with Nicklin J that the Claimant had a reasonable expectation of privacy in the information contained in the LOR. This is in line with a general and reasonably founded expectation of privacy which applies to all who are under investigation and this is not dependent on the type of crime being investigated: there is no ‘hierarchy of offences’ and no distinction can be drawn between “private” criminal offences and “business” offences.

There may be exceptions to this general principle but in this case the following factors confirmed that this general expectation of privacy did apply:

• Although he held a senior position in X Ltd, the Claimant was not a director and, on the evidence, did not have a particular prominence in his role within the company.
• The UKLEB was investigating whether the Claimant had been involved in corruption in relation to X Ltd’s activities in another country. The Claimant accepted that Bloomberg could report on this but the Claimant reasonably expected privacy over the confidential details of this investigation and in particular the UKLEB’s suspicions about his conduct in the light of the evidence it had obtained.
• None of the confidential details in question had been made publicly available by the UKLEB.
• The Claimant had not consented to the publication by Bloomberg.
• The most significant factor was the circumstances in which and the purposes for which the information came into the hands of Bloomberg. This was a preliminary criminal investigation which the Claimant was a suspect in. College of Policing guidance states that suspects in criminal investigations should not be identified prior to charge. Simon LJ also referred to ‘the human characteristic to assume the worst’ which means that it is very damaging for an individual to be revealed as a suspect even if they are later not charged with any offence. It was also very clear in the LOR that its contents were highly confidential.

Stage 2: the balancing act

The second question to be considered was: 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?

Simon LJ started by pointing out that as this is a balancing exercise, it is primarily an exercise for the trial judge. Notwithstanding this observation, Simon LJ considered whether the right assessment of the contribution which Bloomberg’s publication would make to a debate of general interest had been made.

Simon LJ agreed that the UKLEB investigation into X Ltd was a matter of public interest but he did not agree that this conferred the right to reporting on confidential information contained in the LOR. Bloomberg’s appeal included the argument that Nicklin J had failed to attach sufficient weight to “the issue of corruption in the Foreign State and possible involvement in that corruption by X Ltd and its employees/officers”. As Simon LJ pointed out, arguments about the weight attached to different factors are not attractive appeal arguments. There is a clear distinction between investigating and reporting on corruption and simply publishing highly confidential information relating to an investigation. It was the latter and not the former which Bloomberg had done.

Nicklin J had concluded that interference with Bloomberg’s Article 10 rights 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. Simon LJ agreed and found that Nicklin J’s assessment had been ‘thorough and nuanced’.

Practical points

This judgment confirms that in general all suspects under investigation have a reasonable expectation of privacy in relation to the fact and details of such an investigation until they are charged.

• There could be circumstances in which the public interest in reporting outweighs the suspect’s privacy rights but those circumstances will be the exception to this general rule.
• Those under investigation can therefore reasonably expect the details to be kept private until they are charged with an offence unless there is a strong public interest argument in favour of publication. For example, a politician suspected of a crime of public interest might find that the article 8/article 10 balancing exercise results in publication of the details being favoured.
• Media organisations should also be careful, when reporting on criminal investigations, not to publish confidential details of these investigations unless there is a strong public interest in doing so.

Finally, there is a distinction between reporting about alleged conduct, which was not in issue in this judgment, and reporting about a criminal investigation into that conduct which this judgement was concerned with and which should be done by media organisations with care.