Bloomberg ruling confirms high bar for publishers seeking to identify criminal suspects before charge

Caroline Henzell of Pinsent Masons was commenting after the Supreme Court confirmed on Wednesday that individuals who are subject to criminal investigations but who have not yet been charged will typically have a reasonable expectation of privacy in relation to information about their involvement in the investigation.

The Supreme Court judgment clarified the law on misuse of private information in a case involving financial journalism specialists Bloomberg and an anonymous man, referred to as ZXC.

“Although this ruling undoubtedly makes it more challenging for publishers to identify criminal suspects before charge, it still acknowledges that their reasonable expectation of privacy is a starting point and that in some circumstances that expectation could give way to overriding public interest considerations” said Henzell. “There is therefore still scope for this type of reporting to take place, albeit those publishers will need to take extra care to protect against potential misuse of private information claims.”

ZXC is a US citizen and businessman who was being investigated by a UK law enforcement body. Bloomberg published an article about him and the investigation. Details in the article were drawn from a letter of request for mutual legal assistance that had been sent by the law enforcement body to another authority abroad. It is unclear how Bloomberg obtained the letter, but it was marked as confidential and it was clear from it that the investigation was at an early stage and that the man had not been arrested.

ZXC successfully sued Bloomberg for misuse of private information before the High Court in London, where he was awarded £25,000 in damages. Bloomberg failed to overturn the High Court’s findings before the Court of Appeal and its subsequent appeal to the Supreme Court has now been unanimously dismissed.

A recap on the law

In England and Wales, claims of misuse of private information must satisfy a two-stage test.

First, an individual bringing such a claim must demonstrate that they have a reasonable expectation of privacy in the information made, or intended to be made, public, taking into account all the circumstances of the case.

A non-exhaustive list of so-called ‘Murray’ factors was developed by the Court of Appeal, in the case of Murray v Express Newspapers, to guide assessments of whether a reasonable expectation of privacy exists. The seven factors are: the attributes of the claimant; the nature of the activity in which the claimant was engaged; the place at which it was happening; the nature and purpose of the intrusion; the absence of consent and whether it was known or could be inferred; the effect on the claimant; and the circumstances in which and the purposes for which the information came into the hands of the publisher.

If a reasonable expectation of privacy in the information is found, the second stage of the test requires the individual to show that their privacy rights outweigh freedom of expression rights in favour of publication when these two competing qualified rights, provided for under the European Convention on Human Rights and enshrined in the UK’s Human Rights Act, are balanced.

The Supreme Court’s decision

The first issue

The first issue the court considered was whether there is a general rule that a person under criminal investigation has, prior to being charged, a reasonable expectation of privacy in respect of information relating to that investigation.

Much of the Supreme Court’s judgment is focused on the first stage of the legal test relevant to claims of misuse of private information.

In bringing its appeal, Bloomberg argued that the Court of Appeal had been wrong to hold that there is a general rule that a person under criminal investigation has, prior to being charged, a reasonable expectation of privacy in respect of information relating to that investigation. It submitted a series of arguments to demonstrate its point, including that the approach taken by the lower courts “significantly overstates the likelihood of publication of the information causing damage to the claimant’s reputation and underestimates the public’s ability to observe the legal presumption of innocence”.

The Supreme Court rejected the notion that the approach taken by the lower courts had been wrong, and in doing so clarified the application of the law on misuse of private information in these circumstances.

“The court held that it is a legitimate starting point to consider that a person under criminal investigation has, prior to being charged, a reasonable expectation of privacy in respect of information relating to that investigation,” said Henzell. “There may, though, be exceptions to this, as the court confirmed that determining whether this reasonable expectation of privacy arises at the first stage of the test at all does still require a fact-specific assessment of whether the suspect’s privacy rights are engaged.”

For example, the court said that, because it is already established that a person’s reputation falls within the scope of their “private life”, the potential reputational impact of the publication of information about them can be factored into any assessment of whether they have a reasonable expectation of privacy in that information.

The “attributes of the claimant” can also be considered but are not determinative. In this regard, the Court confirmed that: “The ordinary conclusion in relation to the effect of publication of information that an individual is under criminal investigation is that damage occurs whatever his characteristic or status. Indeed, ordinarily we would anticipate greater damage to a businessperson actively involved in the affairs of a large public company than to a private individual.”

Henzell said: “This wide interpretation of the right to a private life is perhaps the most troubling part of the judgment for publishers. The fact that the Court concluded that revealing the existence of a criminal inquiry into a businessman’s activity would cause ‘greater damage to a businessperson actively involved in the affairs of a large public company than to a private individual’ is out of step with normal public interest reasoning. Typically, someone in the public eye, such as a businessman who is actively involved in the affairs of a large public company – as the judgment agrees ZXC was – is held to a higher standard of public scrutiny, not afforded more protections. Privacy rights have therefore been bolstered by this judgment and it will be interesting to see how public interest rights will be balanced against them in future cases.”

The Court was not required to explore when a publisher’s right to freedom of expression and the public interest in publication might outweigh a suspect’s privacy rights in this appeal. Publishers will therefore have to turn to existing precedent for guidance on striking this balance. For example, the judgment notes that public rioting of the nature considered in the case of JR38, which we analysed previously, is the kind of activity in relation to which the legitimate starting point can be departed from and a reasonable expectation of privacy will not arise.

More guidance on how to strike this balance could stem from the government’s plans to reform the Human Rights Act. The most recent consultation explains how the government plans to create new protections for freedom of speech and intends to provide more general guidance on how to balance the right to freedom of expression with competing rights, such as the right to privacy and wider public interest.

“Ultimately, although this ruling raises the bar for publishers, it does not preclude their identification of suspects before charge if they can either show on the facts that the starting point that a reasonable expectation of privacy arises should be displaced or, if it does arise, if they can show that it is outweighed by their own rights to freedom of expression.” Henzell concluded. “It is not a complete death blow to this type of reporting.”

The second issue

The second issue the Supreme Court had to consider was whether the fact that Bloomberg published information originating from a confidential law enforcement document rendered the information private and/or undermine Bloomberg’s ability to rely on public interest in its disclosure.

The Supreme Court said that, despite Bloomberg’s claims otherwise, the Court of Appeal had correctly distinguished between what is confidential information and private information and that “neither the judge nor the Court of Appeal held that the fact that the information originated from a confidential document rendered the information private or meant that Bloomberg could not rely on the public interest in its disclosure”.

It acknowledged, however, that there is an overlap between confidential information and private information and said that it was legitimate of the lower court to factor in the confidentiality of the information when assessing both whether a reasonable expectation of privacy in the information existed and then whether the privacy rights outweighed Bloomberg’s freedom of expression rights.

White collar crime expert Fiona Cameron of Pinsent Masons said the ruling has potential implications for the use of deferred prosecution agreements (DPAs) in the UK. DPAs are available to prosecutors in England and Wales and are designed to encourage businesses to self-report wrongdoing in the hope of more lenient treatment, including the possibility of avoiding a criminal investigation and potential prosecution if strict conditions set by a judge are met. These conditions can include payment of substantial penalties, the need to compensate victims and submission to regular reviews and monitoring.

Cameron said: “The Supreme Court’s confirmation that the reasonable expectation of privacy for those under suspicion but not charged applies regardless of the type of crime being investigated or the public characteristics of the suspect could impact how DPAs are worded in future, as we have seen cases in the past where the finger is pointed at senior individuals who are not yet charged, though this has been less prevalent recently. The ruling provides significant protection for the rights of individuals potentially implicated in corporate wrongdoing, as we have seen reputations damaged by reporting of what has turned out to be unfounded suspicions.”

Olga Tocewicz, also of Pinsent Masons, said: “The ruling confirms the presumption of innocence in criminal proceedings. Whilst Bloomberg argued that the general public, on learning that an individual was subject to criminal investigation, was able to differentiate between that and a decision charge an individual with a criminal offence, the reputational damage of this information being in the public domain remains very real. The impact of a criminal investigation – where allegations have been made, but not yet fully investigated, tested or corroborated – can often be life changing. This is an important step to maintain and protect privacy rights.”

Additional reporting by Lottie Peach of Pinsent Masons.