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Irish news publisher loses High Court battle to halt inspectors probing affairs after suspected data breach

A major Irish news publisher has lost a High Court battle to block inspectors from probing the company’s affairs following a suspected data breach.

It was revealed in March that Irish corporate watchdog the Office of the Director of Corporate Enforcement was investigating Independent News and Media after a suspected data security incident from 2014 came to light.

The ODCE applied to the High Court to allow inspectors to probe INM’s affairs, but the publisher tried to have the watchdog’s decision to make the application overturned on the basis it was in breach of its rights to fair procedures.

INM publishes seven national titles including the Irish Independent, Sunday Independent, Belfast Telegraph and The Herald, as well as 12 regional newspapers.

Mr Justice Noonan today dismissed INM’s case, saying the idea the company should have been given the chance to respond before the ODCE’s application was “novel and without precedent”.

The ODCE’s investigation into INM began after former chief executive Robert Pitt made an allegation in November 2016 that he had been put under improper pressure by the company’s then chairman Leslie Buckley to influence the price to be paid to acquire Newstalk, a radio station owned by Communicorp.

In August last year, Pitt made a further protected disclosure to the ODCE alleging a large quantity of tapes containing data had been removed from INM’s IT system at the behest of Buckley so they could be subjected to analysis by an external company.

Pitt claimed Buckley had explicitly told INM’s head of IT not to tell him what had happened, according to the High Court judgement.

Buckley later told the board the data had been removed as part of a cost saving exercise in relation to one specific contract for the supply of legal services.

However, during the ODCE’s investigation, it obtained a spreadsheet which suggested targeted searches of the data in question had been conducted in relation to 19 individuals, including several journalists, identified as “persons of interest” – showing Buckley’s earlier explanation was wrong.

The Data Protection Commissioner in Ireland is also investigating the data interrogation incident at INM.

In its argument against the ODCE’s decision to apply for inspectors, INM said it had already suffered reputational damage, which led to its share price falling, since news of the investigation broke.

In INM’s affidavit, its director, Leonard O’Hagan, said: “In circumstances where INM is a media organisation, its ability to control and protect data is hugely important to its reputation and the fact that it was deprived of the opportunity to address these issues in advance of the inspectorate application being made has had damaging consequences for its reputation.”

Mr Justice Noonan said the damage INM claimed to have suffered as a result of being sued “is not damage of which the court may take cognisance”.

“Every party exposed to litigation suffers to a greater or lesser extent damage in the form of inconvenience and expense,” he found.

“The most serious allegations may be levelled against parties to litigation which may or may not ultimately be proven but the mere making of such allegations can have a very significant adverse impact on the reputation of the party against whom they are made.

“…however, the law cannot take account of such damage, being as it is the unavoidable consequence of the administration of justice in public mandated by the Constitution. This is part and parcel of the legal system the people have chosen.”

In a statement today INM said its board will consider the terms of today’s decision and any further action the company might take in its interests.

INM chairman Murdoch MacLennan said last month that the board was “horrified” by the prospect that third parties may have had access relating to INM employees for an improper purposes, especially that relating to journalists’ work.

“The board considers the integrity and protection of journalist sources and inquiries a foundation stone of the operation of a free and effective press and is committed to protecting those fundamental principles,” he said.

Buckley has previously said he would “robustly defend” any allegations against him.

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