Fighting off injunctions

The Court of Appeal recently considered whether to overturn an injunction granted to a group of companies trading under the name “Cream”, a Liverpool-based nightclub operator and events organiser. The injunction prevents the Liverpool Daily Post and Liverpool Echo from publishing information derived from Cream’s former accountant about its financial affairs.

The newspapers had put the allegations they were proposing to publish to Cream for comment. Cream applied for an injunction to prevent publication until trial, alleging breach of confidence by their accountant, a breach which they argued went well beyond the limited disclosure to regulators envisaged by the Public Interest Disclosure Act 1998, and was contrary to their right to privacy under Article 8 of the European Convention on Human Rights. The newspapers argued that the accountants’ allegations either exposed wrongdoing or a false public image created by Cream, such as to justify publication in the public interest now.

The traditional test applied by the Court when granting injunctions is whether there is a serious issue to be tried, whether damages alone would be an adequate remedy if publication took place before trial, and the balance of convenience. But now the Court must also consider the provision in Section 12(3) of the Human Rights Act 1998. This states that “no [injunctive] 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 provision had been introduced in order to provide the press with some reassurance that the Act would not easily allow privacy rights (Article 8) to trump free speech (Article 10). The Court of Appeal had to decide what “likely” meant.

The newspapers contended it meant “more likely than not”, a rigorous test which the applicant would fail if the judge took the view that Cream was was less than 50 per cent likely to succeed at trial. Lord Justices Simon Brown, Sedley and Arden disagreed. The word “likely” may cover a whole range of possibilities depending on the context. For example, someone going walking on Kinder Scout who asks whether it is likely to rain is not expecting an answer “yes” only if it is thought more likely than 50 per cent to rain. Where the Court is concerned with Convention rights to privacy (rather than a lesser right in defamation to preserve reputation, particularly for public figures) and to a fair trial, these need to be given proper weight against the competing right to freedom of expression. Here “likely” means “a real prospect of success”, which is a more flexible test and may fall some way short of 50 per cent.

How then does Section 12(3) protect the media at all? The Lord Justices said that the “real prospect of success” must be “convincingly established” after an assessment of the merits of the case on the evidence before the Court at the time. Here Sedley LJ had no doubt that the newspapers would ultimately win at trial. But Simon Brown and Arden LJ thought that Cream had met the test, so the injunction continues.

So if the media get possession of confidential information which appears to expose wrongdoing, they are again in an awkward position. If they seek to put the information to the alleged wrongdoer for comment, they run the risk of an action for an injunction. But if they fail to do so and the information turns out to be wrong, they may find it impossible to run a Reynolds qualified privilege defence to a libel action. To be on certain ground, a journalist about to publish a story based on leaked confidential information needs clear-cut evidence of iniquity or false impression.

Rupert Earle is a partner at Theodore Goddard

by Rupert Earle

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