The High Court has granted an interim non-disclosure order restraining a news agency from publishing confidential hedge fund information.
Section 12 of the Human Rights Act 1998 (section 12) applies if a court is considering whether to grant any relief which, if granted, might affect the exercise of the right to freedom of expression guaranteed by Article 10 of the European Convention of Human Rights (Article 10) (section 12(1)).
The court should not grant an injunction to restrain publication before trial where Article 10 applies unless it is satisfied that the applicant is likely to establish that publication should not be allowed (section 12(3)).
The court must have regard to the importance of the right to freedom of expression, and, where the proceedings relate to journalistic, literary or artistic material, the extent to which:
- Material has, or is about to, become available to the public (section 12(4)(a)(i)).
- It is in the public interest for the material to be published (section 12(4)(a)(ii)).
- Any relevant privacy code applies (section 12(4)(b)).
Where there is a breach of confidence, the test is not simply whether the information is a matter of public interest, but whether in the circumstances it is in the public interest that the duty of confidence should be breached (HRH Prince of Wales v Associated Newspapers Ltd, www.practicallaw.com/3-202-2881).
Newspapers and magazines that are regulated by the Independent Press Standards Organisation (IPSO) must follow the IPSO code, which includes a list of matters that are to be regarded as in the public interest.
B, a hedge fund manager, applied for an interim non-disclosure order against a news agency, R, a financial journalist, K, who worked for R, and an unknown person alleged to have leaked confidential documents provided to potential investors or information derived from those documents.
B sought to restrain the use of the documents or information. R wished to publish the information.
The court granted B’s application. Section 12 was engaged because the application sought to restrain the defendants' freedom of expression protected by Article 10. However, on the evidence, B was more likely than not to show at trial that it was entitled to restrain publication in accordance with section 12.
B was likely to show that the information R wished to publish was impressed with the quality of confidence. R and K had been on notice that the information was confidential. The information which R wished to publish, while not comprising the documents themselves, was more likely than not to have derived from the documents. In relation to any public interest defence, the starting point was that B was a large hedge fund manager and hedge funds and their effect on the economy were a legitimate matter of public interest and debate. A further factor increasing the weight of the public interest in publication was the identity of the investors in B’s funds, which included institutional investors, such as pension plan holders and public employees, who would not be provided with the information. There was a public interest in these individuals having available to them information that would permit them to influence and hold to account the institutions whose investment decisions affected their financial welfare.
However, that public interest was insufficient to show that there was a public interest in publication. There must be a public interest in breaching confidence that attached to information for publication to be permitted. That involved weighing the relative importance of the maintenance of the confidentiality against the relative importance of the public interest in publication. Maintenance of confidentiality was especially important in the context of disclosure to potential investors of material that was relevant to their decision to invest. It was highly desirable that full and candid disclosure was given for that purpose. If a hedge fund felt sensitive and confidential commercial information could be published without restraint, there would be a disincentive to make full and candid disclosure to investors who would therefore be less well informed in making their investments. The interest in protecting confidentiality was all the stronger where the investments were very valuable.
Therefore, the interest in protecting confidentiality in the information outweighed the public interest in publication. There was no question of publication being necessary to correct a false impression by B, to reveal any illegal or immoral dealing, to expose hypocrisy or to expose some improper practice or concealment, nor even to demonstrate incompetence (although these considerations were not needed to justify a breach of confidence).
Also, none of the matters listed in the IPSO code applied. In addition, it was likely that B would show that damages were not an adequate remedy.
This decision illustrates the factors the court will take into account when considering the defence of the public interest in an application for an interim injunction to restrain an alleged breach of confidence by a media outlet in a financial services context.
Case: Brevan Howard Asset Management LLP and others v Reuters Ltd and others  EWHC 644 (QB).
First published in the May 2017 issue of PLC Magazine and reproduced with the kind permission of the publishers. Subscription enquiries 020 7202 1200.