England and Wales High Court (Administrative Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		1st July 2008

MR JUSTICE EADY:

1. This case is due to be tried next week and concerns a claim for breach of confidence or invasion of personal privacy by News Group Newspapers Limited as publishers of the News of the World and of certain images also made accessible on its web site.
2. As yet Mr Price QC for the claimant has not elected whether to pursue the remedy of damages or an account of profits. Mr Warby QC for the claimant seeks an order striking out that part of the damages claim which relates to exemplary or punitive damages. Such an award could only be made if: (1) the claimant ultimately elects for damages; (2) he succeeds on liability; (3) an element of punishment is thought appropriate by the court; and (4) the amount to be awarded by way of compensation, including aggravated damages, is not sufficient to be punitive as well as compensatory.
3. Mr Warby asks me to strike out the claim partly because he says it is inappropriate as a matter of principle in a claim of this kind and partly because the claimant's pleaded case so far does not raise a sufficient foundation of fact to establish the elements generally considered essential in those areas of the law of tort where such a claim has been recognised. That is to say prior knowledge on the part of some identified individual or individuals that the conduct in question would be unlawful; and, secondly, a calculation on the part of the relevant person or persons to the effect that the gains to be made from going ahead with it, despite the supposed knowledge of illegality, would outweigh the possible detriment in terms of any damages to be awarded.
4. The first point of principle is expressed simply on the footing that exemplary damages are said to be inappropriate in a claim for infringement of privacy where this remedy has not hitherto been recognised. A second point of principle was also raised in Kuddus v Chief Constable of Leicestershire [2002] 2 AC 122, but not resolved, of whether in any type of case exemplary damages should be awarded on the basis of vicarious liability. In the criminal context at common law it was thought by Professor Glanville Williams in his Criminal Law (the General Part), 2nd edition, 1961 that contempt of court represented the only example of vicarious liability. Here the only defendant is News Group Newspapers. No individual has been joined and, accordingly, if damages of any kind are to be awarded it can only be on a vicarious footing. But Mr Warby in the course of his submissions told me that he was not pursuing this point at the moment.
5. The issues now raised are of considerable practical significance potentially because it so happens that most of the evidence to be given at trial will relate specifically to the issue of exemplary damages. It has long been recognised that exemplary damages may only be awarded in two common law categories or where expressly recognised by statute. The first category recognised by Lord Devlin in Rookes v Barnard [1964] AC 1129, of no direct relevance here, is that of arbitrary or unconstitutional conduct by a public official. It is to be noted that Lord Devlin, at page 1226, was not in favour of extending this first category to comparable conduct on the part of private individuals or corporations.
6. The second category, generally defined by reference to the law of tort, is applied where there has been conduct deliberately and knowingly carried out and where there has been a calculation on the part of some individual or individuals that more is to be gained by the wrongful act than is likely to be suffered by paying compensatory damages. In this context it is recognised that recklessness, as opposed to mere carelessness or negligence, is to be equated with deliberate conduct.
7. The underlying public policy which has been used to justify the continuance of what is widely recognised to be an anomalous remedy is that it is sometimes appropriate to show in the words of Lord Hailsham in Cassell v Broome [1972] AC 1027, 1073F that "tort does not pay". Mr Price argues that Lord Devlin's two categories have served whatever purpose they may have had in the past and are on the verge of being abandoned. He suggests that now all that is required is conduct which may be characterised as "outrageous". That is based on an observation of Lord Nicholls in Kuddus. I am not so sure, however, that the time has come when the law can be quite so loosely defined.
8. The cause of action now often referred to as breach of privacy and which involves a balancing of competing convention rights, usually those embodied in Articles 8 and 10, has recently evolved from the equitable doctrines that traditionally protected confidential information. Now and especially since the formulation by Lord Nicholls in Campbell v MGN Ltd [2004] 2 AC 457, it is common to speak of the protection of "personal information" in this context. It may not strictly be correct to speak of a "tort" of invasion of privacy or for that matter a "tort" of breach of confidence: see, eg Kite Technology v Unicor [1995] FSR 765 at 777 to 778 and Douglas v Hello! Limited (No 3) [2006] QB at paragraph 96.
9. It is nonetheless true that textbooks dealing with the law of tort such as Gatley on Libel and Slander, 10th edition, and Clerk & Lindsell on Torts, 19th edition, do address the subject. As the learned editors observe in Clerk & Lindsell at 2803:

" ... though there is some judicial support for its recognition as a tort, the most favoured basis for the action to date is that of an equitable principle of good faith. However, because of its close relationship with other torts this chapter on breach of confidence is included in this work."

10. It is fair to say that part of the "judicial support" referred to is to be found in Lord Nicholls' speech in Campbell where he referred to "the essence of the tort", although he had himself been a party to the decision in Kite Technology. It would hardly be characteristic of Lord Nicholls to use language loosely and it is possible to construe his remarks in Campbell to mean that the nature of the cause of action which has long protected confidential information, and more recently personal information, has changed so fundamentally under the stimulus of the Human Rights jurisprudence that it is now to be regarded as tantamount to tort.
11. There is certainly no English authority which establishes that exemplary damages are recoverable in this newly developed form of action, although in Douglas v Hello! Limited [2003] 3 All ER 996 Lindsay J was prepared to make that assumption even before their Lordships' exposition in Campbell. For a judge now positively to hold that such damages are available on the list of remedies for infringement of privacy would involve something of a departure and, in the absence of existing authority, it would be required to be based on an extension by analogy.
12. It was held by the House of Lords in Kuddus that it is not appropriate to limit the application of exemplary damages purely by reference to what was called the "cause of action test". That is to say, merely by reference to those forms of action in which it can be established that there had been an award of exemplary damages prior to 1964, ie when Rookes v Barnard was decided. Accordingly, in Kuddus itself it was held that it had been inappropriate to strike out the claim for exemplary damages purely on the basis that the claim related to the newly developed (or newly discovered) tort of misfeasance in public office. Their Lordships recognised that the abandonment of the "cause of action test" carried with it the risk that there might be an expansion of the categories in which exemplary damages could be awarded: see eg Lord Scott at [120]. They were by no means, however, accepting or recommending that this was how the law should develop. At all events, the potential expansion under consideration itself was finite and discussed by reference to certain claims in tort, such as negligence and deceit, and of course to breaches of statutory duty.
13. Lord Scott regretted the possibility of an increase in cases where exemplary damages would be awarded since he did not consider that they served a useful function at all in our jurisprudence. That is by no means an uncommon view. He favoured a pragmatic approach on the assumption that exemplary damages had to be retained at all, such that they should not be available in cases of negligence, nuisance and strict liability or for breach of statutory duty, save where Parliament had made express provision: see [121] to [122].
14. It is to be noted, however, that his Lordship's remarks were confined fined to categories of tort. He did not suggest, nor did any of his brethren, that the potential extension he recognised (while regretting it) would go so far as to embrace breach of confidence or other equitable or restitutionary claims. It can only be a matter for speculation whether a hypothetical House of Lords would now follow Lord Nicholls' classification of invasion of privacy as a "tort" and, having done so, would regard it as one to which exemplary damages should be extended. There is a case in the New Zealand Court of Appeal in 1990 in which Sir Robin Cook, then President, said that he saw no difficulty in such an extension: see Aqua Culture Corporation [1993] 3 NZLR 299 at 301. It has to be recognised that there are arguments both ways.
15. It is also to be noted that in Cassell v Broome, at pages 1086 and 1088, Lord Reid observed:

" ... I still think it is well within the province of this House to say that that undesirable anomaly should not be permitted in any class of case where its use was not covered by authority."

And:

" ... I would, logic or no logic, refuse to extend the right to inflict exemplary damages to any class of case which is not already clearly covered by authority."

16. What Mr Price seeks to do is to extend the scope of exemplary damages beyond any point hitherto recognised. What is more, he does so in a context which engages freedom of expression and the balancing of rights enshrined respectively in Articles 8 and 10 of the European Convention on Human Rights and Fundamental Freedoms. Accordingly, I need to ask myself whether the chilling effect brought about by the availability of a claim for exemplary damages, having regard specifically to Article 10.2, could be described as (a) prescribed by law and (b) necessary in a democratic society. Would it be proportionate to the public policy objectives underlying a claim of the present kind? Is it necessary to punish as opposed to merely compensating for infringement of privacy?
17. In particular, it is necessary to have regard to the fact that aggravated damages, being part of the compensatory function, can sometimes go to the "top of the bracket" to reflect the court's disapproval: see eg the remarks of Lord Reid in Cassell at page 1085 and those of Lord Scott in Kuddus at [108].
18. The desirability of maintaining exemplary damages has often been considered academically and also in a number of official reports. For example, the Neill Committee in 1991 recommended the abolition of exemplary damages in the field of defamation, although the Law Commission in 1997 was apparently in favour of their retention and, indeed, on a broader basis. Parliament has so far not legislated to take account of either of these recommendations.
19. It is trite knowledge that punitive damages are anomalous in civil litigation in a number of respects. First, they bring notions of punishment into civil litigation when damages are usually supposed to be about compensation. Secondly, the defendant's means can be taken into account because these damages are in some ways analogous to a fine: see eg the remarks of Lord Reid in Cassell at page 1086. Thirdly, despite that, every such sum awarded goes not to the state itself, as is the case with a fine, but to the claimant in the litigation. It represents to that extent a windfall. Fourthly, in the context of those civil claims where a jury is still available, it is the jury rather than the judge which determines the amount of the appropriate penalty.
20. Mr Price argues that it would be inconsistent to acknowledge the possibility of exemplary damages for libel but not for invasion of privacy, since both causes of action are directed to protecting rights now enshrined in Article 8. So it may be, but claims for exemplary damages in libel, albeit awards are very rare, have long been recognised. It is a different matter now to make an extension by judicial intervention.
21. Mr Warby argues with cogency that since the invasion of privacy now involves a direct application of Convention values in English law, it would be somewhat eccentric to graft on to Convention jurisprudence an alien anomaly from the common law in the shape of exemplary damages, not apparently known in Strasbourg.
22. I rather agree. If left to my own devices I would determine the point of principle in favour of the defendant in this case. I do not consider it necessary in a democratic society that the scope of exemplary damages should be extended into the process of finding the right balance between competing rights under Article 8 and Article 10. There is no warrant for doing so in the common law and I see no justification for extending this anomaly, having taken into account the relevant considerations arising under the Human Rights Act 1998. With great reluctance, however, I have come to the conclusion that I cannot in this instance be left to my own devices. I need to bear in mind the matters conveniently summarised in the White Book in the notes at paragraph 3.4.2. The point is there made that "it is not appropriate to strike out a claim in an area of developing jurisprudence, since, in such areas, decisions as to novel points of law should be based on actual findings of fact: see eg Farah v British Airways, The Times, January 26th 2000 (CA), referring to Barrett v Enfield Borough Council [1999] 3 WLR 83 (HL) [1999] 3 All ER 193.
23. A statement of case, it is said, is not suitable for striking out if it raises serious live issues of fact, which can only be properly determined by hearing oral evidence. Moreover, an application to strike out should not be granted unless the court is certain that the claim is bound to fail. Reference is made in that context to Hughes v Colin Richards & Co [2004] EWCA Civ 266.
24. It is necessary also to remember what was said in Douglas v Hello! Limited in the Court of Appeal: [2006] QB 125 at [256] to [257]. That lends some support to Mr Price's argument that civil damages alone might not vindicate Article 8 rights sufficiently. My own view would be, as I have said, that there is no need to go beyond that (and, of course, the grant of an injunction in appropriate cases). In the right case, and this for all I know may be an example, a serious intrusion might merit an award of damages on an altogether higher scale than anything we have seen so far in the limited number of privacy cases reported, but I have to recognise that the appellate authorities are as yet not dispositive of this point. If I strike out at this stage without having found the facts, it might not serve the interests of the parties or the administration of justice. I, therefore, for the time being at least, reject Mr Warby's first basis for a strike out of the plea.
25. I turn now to the specific criticisms of the pleading. When I read and heard Mr Warby's submissions, I found them persuasive. It is undoubtedly important to discourage formulaic allegations in the context of exemplary damages, or as Stuart Smith LJ put it in AB v South Western Water mere "incantations", just as it is important to discourage such pleas in the context of malice. The essential point is that the burden lies on the claimant to establish a case for exemplary damages and there is a requirement, now reflected in CPR 16.4(1)(c), to set out the facts relied upon. These must identify a specific rather than a merely formulaic case. It is certainly not enough, for example, to allege that newspapers are published for profit. It is generally necessary, where it can be done, to identify the individual or individuals who made the necessary calculation, weighing the possibility of having to pay damages against the profit or other material damages to be gained from the wrongful act.
26. Nevertheless, it was recognised in Riches v News Group Newspapers Limited [1986] QB 256 and in John v MGN Limited [1997] QB 586 that there does not have to be a precise calculation. The case can be pleaded as a matter of necessary inference from such matters as an eye catching headline, an "Exclusive" caption or a front page presentation or, nowadays, from equivalent promotional material on a website. Moreover, the fact-finding tribunal should be entitled to have regard to the realities of life in weighing up and possibly rejecting evidence from a newspaper editor or executive as to public interest motives.
27. It was held in John that prominence of presentation can be enough and should not be equated to pleading merely that newspapers are published in general terms for profit. I have to accept that these questions are fact sensitive and cannot easily be disposed of without reference to the evidence and the circumstances of the particular case. The editor in this case, along with others, has produced evidence to say that there was no such calculation. I cannot assume at this juncture without its being tested in cross-examination, as happened, for example, in Richards v News Group Newspapers, that such evidence, despite its being all to the same effect, is bound to be accepted. So much for the "calculation" element.
28. As to knowledge or recklessness as to illegality, the issue falls into two parts. First, there is the matter of whether the material on the website and in the newspaper relating to intimate sexual acts from photographs taken by a hidden camera at the newspaper's instigation could be said to engage Article 8 rights at all. Mr Warby asks how a lay newspaper editor is supposed to make a judgment about that. He is not, he observed rhetorically, the editor of the Law Quarterly Review, but of the News of the World. That is undoubtedly so, but he has experienced legal advice always to hand. Moreover, if close-ups of sexual activity taken clandestinely do not engage privacy rights, what, one may ask, does? If the journalists say that they did not have a clue about this, at least the claimant should have the opportunity of testing it and trying to persuade the court to reject it.
29. The other aspect of this part of the case is knowledge or recklessness as to whether there would or might be a defence (on the assumption that privacy rights are engaged) on the basis of some overriding consideration, such as the public interest or prevention of the public from being misled.
30. Here the case seems to be put on the footing that the public are entitled to know that there was Nazi or concentration camp role play involved. Whether there was is a hotly disputed question of fact. Mr Price goes so far as to argue that no reasonable person could, prior to publication, have believed that to be the case. What is more, there had been no investigation apparently of the taped material or discussion with the woman carrying the hidden camera which could possibly have justified that notion. It is said that there are so many features inconsistent with Nazi role play that this simply could not be made to stand up at trial.
31. The News of the World wanted Woman E, as she is known, to photograph the claimant doing a Nazi salute. That did not happen. Yet they did not enquire into what had gone on sufficiently to establish whether, despite that, the Nazi role play could still be justified. That is Mr Price's case.
32. The newspaper, on the other hand, suggests that there were features about the orgy which could be and were taken to represent such activities. Again, in the end, I have come to the conclusion that this needs to be explored and tested in evidence.
33. Several times during Mr Price's submissions, Mr Warby interjected that his case had not been pleaded in that respect or another. Mr Price argued that some material he relied on had only emerged from the defendant's witness statements served on 20th June and he was merely, in the light of their contents, expanding upon allegations already pleaded in general terms, most recently in his updated case on exemplary damages served on 17th June. Whatever the explanation, I think he should plead any amendments he wishes to make in reliance upon the witness statements so that Mr Warby knows where he stands. I say that with some hesitation in view of the imminence of trial and other pressing commitments, but I think nonetheless these allegations should be crystallised as they involve quite serious allegations of dishonesty, recklessness or sloppy journalism.
34. Subject to this, I decline to strike out the pleading, even though it does contain some apparent eccentricities such as, for example, that the claimant was not contacted in advance of publication. That is not normally to be considered to be the stuff of exemplary damages. Nor is the allegation, taken by itself, that the defendant did not give any advance publicity to the project because there was a risk that a judge might grant an interim injunction in accordance with recently established principle, which of course is not the same as knowing of illegality.
35. Despite this, I believe that I should let the claimant put the case forward to be tested at trial.