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FOURTH
SECTION
CASE OF FINANCIAL TIMES LTD AND OTHERS v. THE UNITED KINGDOM
(Application
no. 821/03)
JUDGMENT
STRASBOURG
15 December 2009
This
judgment will become final in the circumstances set out in Article 44
§ 2 of the Convention. It may be subject to editorial
revision.
In the case of Financial Times Ltd
and Others v. the United Kingdom,
The
European Court of Human Rights (Fourth Section), sitting as a Chamber
composed of:
Lech
Garlicki,
President,
Nicolas
Bratza,
Giovanni
Bonello,
Ljiljana
Mijović,
David
Thór Björgvinsson,
Ledi
Bianku,
Mihai
Poalelungi,
judges,
and Lawrence
Early, Section
Registrar,
Having
deliberated in private on 24 November 2009,
Delivers
the following judgment, which was adopted on that date:
PROCEDURE
- The
case originated in an application (no. 821/03) against the
United Kingdom of Great Britain and Northern Ireland lodged with
the Court under Article 34 of the Convention for the Protection of
Human Rights and Fundamental Freedoms (“the Convention”)
by four newspapers and a news agency: Financial Times Ltd (“FT”);
Independent News & Media Ltd; Guardian Newspapers Ltd;
Times Newspapers Ltd; and Reuters Group plc (together, “the
applicants”) on 20 December 2002.
- The
applicants were represented by Clifford Chance, a law firm in London.
The United Kingdom Government (“the Government”) were
represented by their Agent, Mr J. Grainger, of the Foreign and
Commonwealth Office.
- The
applicants alleged that the decision of the High Court on 19 December
2001 to order them to deliver up a leaked document to Interbrew
violated their right to freedom of expression and their right to
respect for their home and correspondence. They also alleged that
there was an inequality of arms during the court proceedings which
constituted a breach of their right to a fair hearing and of the
procedural requirements implicit in the right to respect for their
home and their correspondence and the right to freedom of expression.
- On
18 October 2005 the Court decided to give notice of the application
to the Government. It also decided to examine the merits of the
application at the same time as its admissibility (Article 29 §
3).
THE FACTS
I. THE CIRCUMSTANCES OF THE CASE
- The
facts of the case, as submitted by the applicants, may be summarised
as follows.
A. The background
- On
30 October 2001 the board of Interbrew, a Belgian brewing company,
asked its investment bank advisers, Goldman Sachs (“GS”)
and Lazard, to carry out work on a potential association between
Interbrew and South African Breweries plc (“SAB”), a
competitor in the brewing industry, with a view to a possible
takeover bid for SAB by Interbrew.
- On
18 November 2001 GS produced a document in relation to the possible
takeover. The document was confidential and contained data which were
likely to affect both Interbrew and SAB's share prices. It formed the
basis of a presentation which, on 20 November 2001, was submitted to
Interbrew's internal mergers and acquisitions department.
- On
an unknown date a person (“X”) whose identity is unknown,
even by the applicants, came into possession of a copy of the
presentation submitted to Interbrew. On 27 November 2001 X sent
copies of a document (“the leaked document”) to various
news media organisations, including the FT, The Guardian,
The Times and Reuters, from an address in
Belgium. On Interbrew's evidence the leaked document was very similar
if not identical to the Interbrew presentation, except for the
following: (a) the substitution of an offer price for SAB shares of
between 500 and 650 pence in place of the price of between 400 and
550 pence, which had apparently been in the original presentation;
and (b) the insertion of a timetable for making the offer.
B. The press coverage
- On
27 November 2001 Mr Jones, a journalist at the FT, received a
copy of the leaked document from X. At 5p.m. that day, he telephoned
Mr Van Praag of GS and told him that he had received the leaked
document and that he intended to publish it. Mr Van Praag reported
the conversation to Mr Powell, the Chief Executive Officer of
Interbrew. Mr Powell telephoned Mr Jones and told him, on the record,
that Interbrew had carried out research into SAB but that it was not
in the advanced stage of preparing an offer. At about 10p.m., the FT
published an article on its website stating that Interbrew had been
plotting a bid for SAB, that documents seen by the FT
indicated that an approach could be made on 3 December 2001 and
referring to the conversation between Mr Jones and Mr Powell. The
article did not state the proposed offer price but gave accurate
codenames used for the advisers in the presentation and quoted from
the document on the likely positive market reaction and with
reference to potential rival bids. The FT published an article
in the same terms in its newspaper the next morning.
- At
about 5.30p.m. on 27 November 2001 The Times received a copy
of the leaked document from X. In its second edition, which reached
the news stands at about 5a.m. on 28 November 2001, it published an
article referring to the “confidential” document which it
had seen, a supposed approach to SAB “this weekend”, a
plot to bid GBP 4.6 billion for SAB and an offer expected to be
pitched at up to 590 pence per share.
- At
12.51a.m. on 28 November 2001 Reuters reported the FT's
story and the rise in the share price of SAB on the Johannesburg
Stock Exchange on its wire service. Reuters received a copy of
the leaked document from X on the afternoon of 28 November 2001 and,
at 2.44p.m., published a further article referring to its receipt of
the leaked document.
- At
about 8.30a.m. on 28 November 2001 GS and Lazards contacted the
Takeover Panel, which asked Interbrew to make a statement.
In response, at about 12.15p.m., Interbrew issued a press
release confirming that it had undertaken a preliminary analysis of
SAB as part of its routine annual review of the leading brewers of
the world; that the analysis was at a very preliminary stage which
might or might not lead to an offer at some time in the future; but
that no approach had been made.
- On
28 November 2001 The Guardian received a copy of the
leaked document from X. On 29 November 2001 it published an article
referring to the “secret document” prepared by GS and
Lazards, which it stated had been “couriered” to a “large
chunk” of the business press, and mentioning the leaking of
previous bids by Interbrew.
- The
Independent did not receive a copy of the leaked document
directly from X. However, it did take steps to obtain a copy from
another source that it knew but undertook not to reveal it. On 29
November it published two articles about the leaked document, one of
which stated that the offer price and timetable appeared bogus.
- On
29 November 2001 Interbrew, in agreement with the Takeover Panel,
published a second statement to the press, alleging that the leaked
document contained fabrications. This statement was reported by each
of the applicants, who continued to publish articles on the topics of
doctored copies and a possible bid.
- The
impact of this press coverage on the market in shares of Interbrew
and SAB appears to have been significant. Interbrew's share price at
market on 27 November 2001 was EUR 29.40. By midday the next day it
was EUR 27.20. It was EUR 28.25 after the press release and at market
close. The SAB share price at market close on 27 November 2001 was
442.74 pence and at market close on 28 November 2001 was 478 pence.
The volume of SAB's shares traded on 27 November 2001 was less than
2 million. On 28 November 2001 it was more than 44 million.
- On
30 November 2001 Interbrew instructed Kroll, the security and risk
consultants, to assist in identifying X. Kroll did not identify X.
On 6 December 2001 Interbrew made a criminal complaint to
the Examining Magistrate of the Brussels Court of First Instance,
together with a claim for civil damages, against a person or persons
unknown.
C. The Norwich
Pharmacal proceedings
- On
10 December 2001 Interbrew launched proceedings against the
applicants in the High Court following advice from Kroll that access
to the original documents might vitally assist the investigation.
Given that the applicants were not aware of the identity of X,
Interbrew lodged a claim for:
“1. delivery up of documents:
1.1 containing or relating to an analysis of [SAB]
prepared by [GS] and/or [Lazards]; and
1.2 evidencing or containing discussions with any
journalistic source in respect of the subject matter of 1.1;
2. disclosure of such documents;
3. an order that the Defendants do disclose the name and
address of:
3.1 any journalistic source who had provided them with
the documents referred to in 1.1;
3.2 any journalistic source with whom they have had the
discussions referred to at 1.2 ...”
- At
the same time Interbrew, without notice to the applicants, applied
for, and was granted, a temporary injunction from the High Court in
the following terms:
“1. The Defendants must not alter, deface, dispose
of or otherwise deal with the documents referred to in Schedule 3 at
paragraph 1 thereof
2. The Defendants must not alter, deface, dispose of or
otherwise deal with the documents referred to in Schedule 3 at
paragraph 2 thereof
3. The Defendants must within 24 hours of service of
this Order deliver up the two categories of documents referred to at
Schedule 3 ... to the custody of solicitors appointed on their behalf
to be held until further Order herein ...
4. The Defendants must within 48 hours of service of
this Order serve on the Claimant's Solicitors a list of
4.1 the Documents within their control
4.2 those of the Documents which were formerly in their
control but are no longer in their control, explaining what has
happened to them
and confirm the facts set out in this paragraph by means
of a signed witness statement containing a Statement of Truth also
within 48 hours of service of this Order
PROVIDED THAT this Order shall not require the
Defendants to provide any information which would disclose the source
of information contained in a publication for which the Defendants
are responsible.
...
SCHEDULE 3
The Documents
1. Documents including draft documents and copy
documents (whether received by the Defendants as copy documents or
copies by the Defendants) provided to the Defendants by any third
party subsequent to 23 November 2001 containing or relating to an
analysis of [SAB] prepared by [GS] and/or [Lazards].
2. Documents evidencing or containing discussions with
any journalistic source subsequent to 23 November 2001 relating to an
analysis of SAB prepared by [GS] and/or [Lazards], together with the
envelopes or packaging in which they were delivered to the Defendants
and any additional documents contained therein.”
- On
11 December 2001, Interbrew sought an order in different terms from
the one granted on 10 December 2001. Instead of the original
paragraph 4 of the order, Interbrew sought an order requiring the
applicants to serve, within 48 hours, a witness statement setting out
the names and addresses of every person who had provided them with
the Schedule 3(1) documents and every person with whom they had had
discussions evidenced or contained in the Schedule 3(2) documents
and, if these identities were not known, the circumstances in which
they received the documents, to the best of their knowledge. On 12
December 2001, the judge ordered that paragraphs 3 and 4 of the order
of 10 December 2001 be discharged in their entirety.
- An
expedited hearing on Interbrew's application for an injunction took
place on 14 and 17 December 2001 before the High Court.
Interbrew invoked the Norwich Pharmacal principle (see
paragraph 29 below) whereby if a person through no fault of his own
becomes involved in the wrongdoing of others so as to facilitate that
wrongdoing, he comes under a duty to assist the person who has been
wronged by giving him full information and disclosing the identity of
the wrongdoer.
- On
19 December 2001 the High Court (Interbrew v. Financial Times et
al. [2001] EWHC Ch 480) ordered delivery up of the documents
under the Norwich Pharmacal principle in the following terms:
“1. The Defendants must not alter, deface, dispose
of or otherwise deal with the documents referred to in Schedule 3.
2. The Defendants must within 24 hours of service of
this Order deliver up the documents and other materials referred to
at Schedule 3 ... to the Claimant's solicitor ...”
- The
judge found (at paragraph 34) that:
“What [X] has done is deliberately to admix with
that confidential information false information (a lethal concoction)
to create a false market in the shares of the Claimant and SAB, a
serious criminal offence. There must be a real risk of repetition, if
[X] is not identified. Beyond the substantial private interest of the
Claimant, there is a substantial public interest in identifying [X]
and taking all necessary steps to prevent any repetition. As it seems
to me, the circumstances of this case are exceptional: vital public
as well as individual interests are at stake in securing the
integrity of the share market. There is an overriding need for the
disclosure sought in the interests of justice and for the prevention
of crime”.
- The
judge continued (at paragraph 37):
“As it seems to me the Claimant has sufficiently
explored other avenues before having recourse to this application for
relief against the press ... There have been internal investigations
conducted at the Advisers' and the Claimant's businesses; the
Claimant is conducting inquiries further afield. The Claimant is
using investigators of the highest international calibre. The
Defendants complain that full details of all the Claimant's inquiries
are not given in the Claimant's evidence and that this is necessary
in order to establish how thorough they have been, but there is no
substance in this complaint. The evidence establishes to my
satisfaction that full and proper investigations have been made and
are continuing. To require disclosure of more details of these
investigations is unnecessary even as such a course may prejudice the
ongoing inquiries ... The evidence before me (and most particularly a
report by Kroll) establishes that the Claimant needs the information
which production of the Documents ought to provide to further and
give impetus to these investigations ... I am satisfied that the
order is required if progress is to be made whilst the trail is still
warm and if an identification is to be made within the time frame
necessary to safeguard the interests of the Claimant and the public.”
- The
applicants were granted leave to appeal by the Court of Appeal on 20
December 2001 and were required to file their written arguments with
the court by 28 December 2001. By judgment of 8 March 2002 the Court
of Appeal dismissed the applicants' appeal (Interbrew v. Financial
Times et al. [2002] EWCA Civ 274). In the leading judgment of
Sedley LJ, the Court of Appeal held that in order to justify the
exercise of Norwich Pharmacal powers to compel production of
documents or disclosure of information, Interbrew had to establish
that each defendant had facilitated a civil wrong committed by an
unknown person against whom they aimed to seek redress. The only
civil wrong on which Interbrew could rely was that of a breach of
confidence on the part of the source. While such a breach of
confidence had been made out, what had not been made out was a
“bigger and better cause of action in respect of the 'lethal
cocktail' of fact and falsehood, since the element of falsehood can
neither form part of the protected confidence nor stand on its own as
a discrete tort” (at paragraph 28).
- Sedley
LJ went on to consider the approach adopted by the High Court as
follows (at paragraphs 40-41):
“Everything proceeded below on the assumption that
crimes of forgery and market manipulation were proved. But both, or
at least the former, depend upon the falsity of the pages in the
document showing bid price and timetable. False they were if one goes
on such evidence as was before the court. But by definition their
falsity is alleged against an absent and silent accused. We have no
way of knowing, any more than – as [counsel for the applicants]
stressed – the five defendants do, whether the source, if
cornered, would demonstrate that he had simply assembled authentic
documents from different places within Interbrew, GS and Lazards.
I have to say that I find this aspect of the Norwich
Pharmacal procedure troubling. A commercial enterprise which
may very well have its own reasons for denying the authenticity of a
document gets a clear run against a media defendant which can only,
save in rare cases, take a neutral stand on the question. The court
of first instance needs to be extremely circumspect before accepting
evidence, especially when, as here, it is second- or third-hand, that
goes to the heart of the case and cannot be controverted ...”
- However,
Sedley LJ concluded:
“49. ... I have come to the conclusion, though
not without misgiving, that the order for disclosure was rightly made
against all the defendants. Nothing which has been put before us
suggests that the court will be significantly better placed at an
eventual trial than it is now to decide the key issues; and there is
at least some force in Interbrew's complaint that its hands are tied
vis-à-vis South African Breweries, and possibly other targets
too, unless and until it can prevent a recurrence of this spoiling
operation.
50. ... Interbrew's prima facie entitlement to delivery
up of the documents is established because – and solely because
– it may enable them to ascertain the identity of the proper
defendant to a breach of confidence action relating to the relatively
anodyne, though not the explosive, parts of the document. From the
sweep of Interbrew's original case and the “lethal cocktail”
on which Lightman J founded his conclusions, the basis of the
application now shrinks to this little measure. But though little, it
is far from insignificant for Interbrew ...
51. With it, one turns to s.10 of the 1981 Act. The
section begins by barring any order for disclosure in circumstances
such as these, since its very object is to discover the source of
information which the defendants have published. Interbrew, however,
can invoke one of the listed purposes for lifting the bar: that
disclosure is necessary in the interests of justice. That it may also
go to the prevention of crime cannot be ruled out as irrelevant, but
it is peripheral because it is not a purpose for which Interbrew
themselves are entitled to disclosure. Then is the public interest in
the doing of justice sufficient in the particular circumstances of
this case to make disclosure necessary? Reading that question through
the lens of the Convention and its jurisprudence, as we are now
required to do, the following elements separate themselves out.
52. First, what is the nature and weight of the public
interest in the confidentiality of sources? The right of free
expression enshrined in art. 10 is undifferentiated, but as the
European Court of Human Rights said in Goodwin, 'freedom of
expression constitutes one of the essential foundations of a
democratic society', and '[p]rotection of journalistic sources is one
of the basic conditions for press freedom' (paras. 39, 40). Much
judicial authority in this country says the same. The news media, in
consequence, enjoy in s.10 of the 1981 Act a high initial level of
protection, not in their own but in the public interest.
53. The entitlement to reverse the balance is prescribed
by law, as art. 10(2) requires. A required ground for doing so,
founded on the no less important public interest in an effective
system of justice, is present. Is it then necessary to reverse the
balance? The following elements seem to me to matter here:
...
• Any invasion of the protection must meet a
pressing social need – not merely an individual one. This meets
the need to counterpose one public interest to another. Here the
need, in terms of s.10, is to enable Interbrew to restrain by court
action any further breach of confidence by the source and possibly to
recover damages for losses already sustained. In terms of art. 10(2)
it is to protect the rights of Interbrew.
• There must be no less invasive alternative. While
I would not adopt the judge's approach of simply refusing to
second-guess the view of the aggrieved parties' solicitors, I would
infer from the evidence that as much has been done as can at present
be done by the use of reputable private detectives to trace the
source. I can see that to demand particulars of the admittedly
general assertions about this could jeopardise the exercise.
...
54. It seems to me that once the legitimacy of
Interbrew's intended resort to law is accepted, the relatively modest
leak of which they are entitled to complain does not diminish the
prospective seriousness for them of its repetition. For the media, on
the other hand, the public interest in their freedom to publish is
constant, and with it the public interest in the confidentiality of
their sources. While I do not think that the character of the
material is irrelevant as a matter of law, I agree with Laws LJ in
Ashworth at least to this extent, that it cannot be for the
court to decide how interesting or important it thinks the
material is. That is for journalists and their editors. But it may
follow that the more the press decide to make of a story, the greater
will be the affected party's legitimate interest in finding and
suppressing its source.
55. What in my judgment matters critically, at least in
the present situation, is the source's evident purpose. It was on any
view a maleficent one, calculated to do harm whether for profit or
for spite, and whether to the investing public or Interbrew or both.
It is legitimate in reaching this view to have regard not only to
what Interbrew assert is the genuine document but also to the
interpolated pages; for whether they are forged or authentic,
integral or added, they were calculated to maximise the mischief. To
this factual extent the 'lethal cocktail' is material, despite its
legal irrelevance to the earlier stages of the inquiry. The public
interest in protecting the source of such a leak is in my judgment
not sufficient to withstand the countervailing public interest in
letting Interbrew seek justice in the courts against the source.”
- On
9 July 2002 the House of Lords refused the applicants leave to
appeal, following which Interbrew required the applicants to comply
with the court order for delivery up of the documents. The applicants
have refused to comply. While Interbrew has instituted enforcement
proceedings against The Guardian, it has not pursued these
proceedings.
II. RELEVANT DOMESTIC LAW AND PRACTICE
A. Duty of assistance and disclosure
- The
exercise of the power to require the delivery up of otherwise
confidential information derives from the jurisdiction established by
the decision of the House of Lords in Norwich Pharmacal v. Customs
& Excise Commissioners [1974] AC 133 at page 175:
“[The authorities] seem to me to point to a very
reasonable principle that if through no fault of his own a person
gets mixed up in the tortious acts of others so as to facilitate
their wrong-doing he may incur no personal liability but he comes
under a duty to assist the person who has been wronged by giving him
full information and disclosing the identity of the wrongdoers. I do
not think that it matters whether he became so mixed up by voluntary
action on his part or because it was his duty to do what he did. It
may be that if this causes him expense the person seeking the
information ought to reimburse him. But justice requires that he
should co-operate in righting the wrong if he unwittingly facilitated
its perpetration.”
- That
power is subject to section 10 of the Contempt of Court Act 1981
(“the 1981 Act”) which provides that:
“No court may require a person to disclose, nor is
any person guilty of contempt of court for refusing to disclose, the
source of information contained in a publication for which he is
responsible, unless it be established to the satisfaction of the
court that disclosure is necessary in the interests of justice or
national security or for the prevention of disorder or crime.”
- Prior
to the proceedings in the present case, the Court of Appeal had held
in Ashworth Hospital Authority v. MGN Ltd [2001] 1 All ER 991
that the phrase “the interests of justice”
in section 10 of the 1981 Act was wide enough to include the exercise
of legal rights and the ability to seek protection from legal wrongs,
whether or not by court action. This interpretation was later
confirmed by the House of Lords in Ashworth Hospital Authority v.
MGN Ltd [2002] 1 WLR 2003.
- In
Ashworth, the High Court granted an order compelling the
Mirror newspaper to reveal a source to Ashworth Hospital. The
Mirror subsequently disclosed its source as Robin Ackroyd, an
investigative journalist. Ashworth brought new proceedings to seek an
order for disclosure against Mr Ackroyd and applied for summary
judgment on the grounds that the case was indistinguishable from that
of the Mirror in the previous Ashworth case. Mr Ackroyd
submitted that the facts were materially different. The High Court
granted the order requested but it was overturned on appeal to the
Court of Appeal which held in Mersey Care NHS Trust v. Robin
Ackroyd [2003] EWCA Civ 663 at paragraph 70 that:
“Protection of journalistic sources is one of the
basic conditions for press freedom in a democratic society. An order
for source disclosure cannot be compatible with Article 10 of the
European Convention unless it is justified by an overriding
requirement in the public interest. Although there is a clear public
interest in preserving the confidentiality of medical records, that
alone cannot, in my view, be automatically regarded as an overriding
requirement without examining the facts of a particular case. It
would be an exceptional case indeed if a journalist were ordered to
disclose the identity of his source without the facts of his case
being fully examined. I do not say that literally every
journalist against whom an order for source disclosure is sought
should be entitled to a trial. But the nature of the subject matter
argues in favour of a trial in most cases ...”
B. Civil proceedings in England and Wales
- The
Civil Procedure Rules (“CPR”) govern procedure in civil
proceedings in England and Wales. Relevant excerpts of the CPR
provide as follows:
“Rule 18.1
(1) The court may at any time order a party to –
(a) clarify any matter which is in dispute in the
proceedings; or
(b) give additional information in relation to any such
matter,
whether or not the matter is contained or referred to in
a statement of case.
(2) Paragraph (1) is subject to any rule of law to the
contrary.
...
Rule 32.2
(1) The general rule is that any fact which needs to be
proved by the evidence of witnesses is to be proved –
(a) at trial, by their oral evidence given in public;
and
(b) at any other hearing, by their evidence in writing.
(2) This is subject –
(a) to any provision to the contrary contained in these
Rules or elsewhere; or
(b) to any order of the court.
...
Rule 32.6
(1) Subject to paragraph (2), the general rule is that
evidence at hearings other than the trial is to be by witness
statement unless the court, a practice direction or any other
enactment requires otherwise.
(2) At hearings other than the trial, a party may, rely
on the matters set out in –
(a) his statement of case; or
(b) his application notice, if the statement of case or
application notice is verified by a statement of truth.
Rule 32.7
(1) Where, at a hearing other than the
trial, evidence is given in writing, any party may apply to the court
for permission to cross-examine the person giving the evidence
...”
C. The Press Complaints
Commission Code of Conduct
- The
Press Complaints Commission has adopted a code of conduct which is
regularly reviewed and amended as required. The 2003 Code of Conduct
reads, insofar as relevant, as follows:
“1. Accuracy
Newspapers and periodicals must take care not to publish
inaccurate, misleading or distorted material including pictures.
Whenever it is recognised that a significant inaccuracy,
misleading statement or distorted report has been published, it must
be corrected promptly and with due prominence.
An apology must be published whenever appropriate.
Newspapers, whilst free to be partisan, must distinguish
clearly between comment, conjecture and fact.
A newspaper or periodical must report fairly and
accurately the outcome of an action for defamation to which it has
been a party.
...
15. Confidential sources
Journalists have a moral obligation to protect
confidential sources of information.”
- There
have been no significant changes to the above provisions since 2003.
III. RELEVANT COUNCIL OF EUROPE MATERIAL
- On
8 March 2000, the Committee of Ministers of the Council of Europe
adopted a Recommendation (No. R (2000) 7) on the right of journalists
not to disclose their sources of information. The Recommendation
provides, at Principle 3, as follows:
“a. The right of journalists not to
disclose information identifying a source must not be subject to
other restrictions than those mentioned in Article 10, paragraph 2 of
the Convention. In determining whether a legitimate interest in a
disclosure falling within the scope of Article 10, paragraph 2 of the
Convention outweighs the public interest in not disclosing
information identifying a source, competent authorities of member
states shall pay particular regard to the importance of the right of
non-disclosure and the pre-eminence given to it in the case-law of
the European Court of Human Rights, and may only order a disclosure
if, subject to paragraph b, there exists an overriding
requirement in the public interest and if circumstances are of a
sufficiently vital and serious nature.
b. The disclosure of information identifying a source
should not be deemed necessary unless it can be convincingly
established that:
i. reasonable alternative measures to the disclosure do
not exist or have been exhausted by the persons or public authorities
that seek the disclosure, and
ii. the legitimate interest in the disclosure clearly
outweighs the public interest in the non-disclosure, bearing in mind
that:
- an overriding requirement of the need for disclosure
is proved,
- the circumstances are of a sufficiently vital and
serious nature,
- the necessity of the disclosure is identified as
responding to a pressing social need, and
- member states enjoy a certain margin of appreciation
in assessing this need, but this margin goes hand in hand with the
supervision by the European Court of Human Rights.
c. The above requirements should be applied at all
stages of any proceedings where the right of non-disclosure might be
invoked.”
THE LAW
I. ALLEGED VIOLATION OF ARTICLE 10 OF THE CONVENTION
- The
applicants complained that the decision of the High Court on
19 December 2001 to order them to disclose the leaked document
to Interbrew violated their right to freedom of expression as
provided in Article 10 of the Convention, which reads, insofar as
relevant, as follows:
“1. Everyone has the right to freedom
of expression. This right shall include freedom to hold opinions and
to receive and impart information and ideas without interference by
public authority and regardless of frontiers ...
2. The exercise of these freedoms, since it
carries with it duties and responsibilities, may be subject to such
formalities, conditions, restrictions or penalties as are prescribed
by law and are necessary in a democratic society ... for the
prevention of disorder or crime, ... for the protection of the
reputation or rights of others, for preventing the disclosure of
information received in confidence ...”
- The
applicants also alleged that the inequality of arms during the
Norwich Pharmacal proceedings constituted a breach of the
procedural aspect of their right to freedom of expression.
Admissibility
1. The Government's preliminary objection
- The
Government submitted that the applicants' complaint regarding the
lack of procedural guarantees in the Norwich Pharmacal
proceedings was inadmissible due to the applicants' failure to
exhaust domestic remedies within the meaning of Article 35 § 1.
In the view of the Government, the applicants did not take advantage
of procedural protection available to them under domestic law. The
Government argued that it was open to the domestic court to make a
range of orders against Interbrew for disclosure of documents,
cross-examination and production of information but this would
generally only be done on the application of either party. In the
present case, there was no evidence that the applicants had made any
formal applications of this nature. The Government further relied
upon the fact that the applicants did not request a full trial of
Interbrew's claim for delivery up of the leaked document. The
Government concluded that the applicants did not argue before the
domestic courts that the procedure adopted was unfair but instead
chose to argue that Interbrew could not prove its case. Accordingly,
the applicants had not raised the substance of their complaint in the
domestic proceedings.
2. The applicants' response
- The
applicants disputed the Government's assessment of the domestic
proceedings. They highlighted the urgent nature of the proceedings
and contended that the Government's submissions did not reflect the
haste with which the applicants were required to defend Interbrew's
application.
- The
applicants emphasised that they had argued before the domestic courts
that no findings of fact should be made on the basis of one-sided
evidence in an interim application. They contested the Government's
suggestion that they did not ask the judge to order a full trial of
Interbrew's claim, although they accepted that a formal application
was probably not made and contended that this was because the judge
had made it clear that he would not grant such an order. The
applicants also accepted that no formal application was made for
further information, but argued that an oral application in the
course of argument sufficed when time was short. They explained that
they had orally requested further details of Interbrew's
investigations but that the judge ruled this to be unnecessary on the
basis that it might prejudice ongoing enquiries. As to their failure
to seek permission to cross-examine witnesses, the applicants pointed
out that the relevant witness statements were lodged either late on
16 December 2001 or early on 17 December 2001, in the closing stages
of the urgent application, and in any event recounted only hearsay
evidence rather than dealing with the underlying facts of the leak
and the investigation. Evidence, in the form of a letter from Kroll,
concerning the progress of the investigation was merely appended to
the witness statement of Interbrew's solicitors which meant that the
applicants were not able, under the CPR, to directly cross examine
the Kroll witness himself. They therefore contended that they had
aired the substance of their procedural complaint in the domestic
proceedings.
3. The Court's assessment
- The
Court reiterates that in assessing whether domestic remedies have
been exhausted, account should be taken not only of the formal
remedies available in the legal system concerned but also of the
particular circumstances of the case in question (see Akdivar and
Others v. Turkey, 16 September 1996, § 69, Reports
of Judgments and Decisions 1996 IV). There should be a
degree of flexibility in the application of the rule and it is not
necessary to demonstrate that the arguments were advanced in exactly
the same terms before domestic courts as before this Court, provided
that the substance of the complaint has been aired in domestic
proceedings in accordance with any formal requirements (see Fressoz
and Roire v. France [GC], no. 29183/95, § 37, ECHR
1999 I).
- The
Court notes that until 10 December 2001, when an injunction was
granted against them without notice, the applicants were completely
unaware that Interbrew was planning to take legal action to compel
them to deliver up the leaked document. The applicants thereafter
found themselves in the position of having to resist, at very short
notice, an interim application for delivery up of documents within 24
hours, where the application by its nature would be determinative of
the whole case. The Court observes that the timetable for the
proceedings before the High Court was tight and that the deadline for
lodging written arguments before the Court of Appeal was short.
- The
Court considers that the applicants argued in substance before both
the High Court and the Court of Appeal that the court should not make
findings of fact in summary proceedings and that their ability to
contest the delivery up order was hindered by the fact that they were
required to take it on trust that the leaked document had been
falsified by X and that adequate efforts had been made to investigate
the leak but had proved unsuccessful. In these circumstances the
Court finds that, having regard to the haste with which the
proceedings took place, the applicants have satisfied the
requirements of Article 35 § 1.
- The Court notes that the complaint is not manifestly
ill-founded within the meaning of Article 35 § 3 of the
Convention. It must therefore be declared admissible.
B. Merits
1. The parties' observations
a. The applicants
-
The applicants argued that as a consequence of the order of the
domestic court, their journalistic sources might be identified. They
contended that this violated their right to freedom of
expression. The applicants alleged in particular that (i)
the “interests of justice” test in section 10 of the 1981
Act did not construe sufficiently narrowly the exceptions permitted
by Article 10 § 2; (ii) it was wrong in principle to make an
order for delivery up of documents which had the certain effect of
interfering with freedom of expression when, as in this case, the
seriousness of the harm done to, and the wrong suffered by, the
claimant could not be determined; (iii) it was wrong in principle to
make an order for delivery up of documents where the pursuit of
evidence by other means had not been exhausted and/or evidence as to
the adequacy of investigations was not satisfactory; and (iv) the
domestic courts were wrong to treat the purposes of X as being
relevant and justiciable.
- The
applicants pointed to the chilling effect that disclosure of
journalistic sources had on the freedom of expression of the press in
a democracy. In this regard, there was no difference between an order
for disclosure of a source's identity and an order for disclosure of
documents which might identify a source. The applicants argued that
the courts had failed to properly balance Interbrew's interest in
finding X against the vital public interest in protecting the
applicants' journalistic source. They concluded that in the present
case, the order for delivery up was not “necessary in a
democratic society”.
- The
applicants also contended that the procedure employed for requiring
them to deliver up the leaked documents contained insufficient
procedural safeguards to constitute a fair hearing. In particular,
the applicants alleged that they did not enjoy equality of arms in
the legal proceedings because the court made important findings of
fact upon which it later relied in carrying out the balancing test
required under Article 10 § 2 without evidence being properly
tested in court. The applicants refer in particular to the following:
(i) the High Court accepted the assertion by Interbrew that the
leaked document had been falsified, an assertion which the applicants
were not able to challenge because they did not have access to all of
Interbrew's documentation; (ii) the courts took Interbrew's claim
that it had conducted an adequate investigation into the leak and
that the investigation had proved insufficient at face value, again
in circumstances in which the applicants were unable to challenge the
assertion or cross-examine relevant witnesses; and (iii) the courts
found X's purpose to have been harmful without full evidence being
heard.
- The
applicants pointed to the fact that all of the evidence adduced by
Interbrew was in the form of witness statements – four by
Interbrew's solicitors and one by Interbrew's Executive
Vice-President and Advisor to the Chairman – containing
second-hand or third-hand hearsay evidence. The statements referred
to information or belief, rather than knowledge. The applicants
alleged that inconsistencies and omissions in the witness statements
could not be properly explored in court. The applicants concluded
that the absence of procedural safeguards meant that the court did
not determine the necessity and proportionality of the disclosure
order in a properly adversarial procedure.
- The
applicants finally highlighted that failure to comply with the
delivery up order could lead to penal sanctions being imposed upon
them for contempt of court. They argued that in the circumstances, a
greater level of equality of arms than would be required in ordinary
civil proceedings ought to apply.
b. The Government
- The
Government contested the applicants' submissions, observing that
Article 10 did not require the protection of journalistic sources in
all circumstances but allowed for that protection to be circumscribed
where the conditions set out in Article 10 § 2 were met.
- The
Government argued that section 10 of the 1981 Act, as applied in the
applicants' case, was compatible with Article 10 of the Convention.
They further argued that the domestic courts were entitled to make
the findings they did on the basis of the evidence and to take those
findings into account in making the delivery up order. As to the harm
suffered by Interbrew, the Government pointed to the drop in its
share price and the rise in SAB's share price. The Government also
considered that the court was justified in reaching its conclusion as
to X's purpose given, inter alia, the anonymity, the lack of
any attempt by X to justify the leak and the absence of any evidence
to contradict Interbrew's assertion that the leaked documents had
been manipulated. Finally, the Government argued that the applicants'
contention regarding the adequacy of Interbrew's investigation into
the leak was an attempt to appeal against the Court of Appeal's
judgment, which had rationally concluded that as much as possible had
been done to track down the source of the leak.
- The
Government pointed out that the order did not require the applicants
to identify X directly. They highlighted the public interest in
finding the perpetrator of what might have been serious criminal
conduct and the risk of future harm to Interbrew. They concluded that
the order was both necessary and proportionate and that the Court
should respect the domestic court's margin of appreciation in this
regard.
- The
Government accepted that the applicants were entitled to enjoy
equality of arms in Norwich Pharmacal proceedings. However,
they argued that contracting States have greater latitude in civil
cases and that in such cases, it is important to assess the overall
fairness of the proceedings. The Government contended that the
proceedings were fair given that, inter alia, the
questions as to whether the domestic courts were justified in
concluding that X's purpose was to harm Interbrew and whether the
leaked document contained untrue material were immaterial to whether
the applicants had a fair trial; and the applicants were not being
asked to name X.
- The
Government further argued that the applicants had available to them
further procedural remedies which they chose not to use. In the
circumstances, the Government concluded that the applicants had
received a fair trial.
2. The Court's assessment
- The
Court notes that the disclosure order of 19 December 2001 has not
been enforced against the applicants. In the Court's view, this does
not remove the harm in the present case since, however unlikely such
a course of action currently appears, the order remains capable of
being enforced (see Steel and Morris v. the United Kingdom,
no. 68416/01, § 97, ECHR 2005 II). The
Government do not argue to the contrary. It follows that the order of
19 December 2001 constituted an interference with the applicants'
right to freedom of expression. It is therefore necessary to examine
whether the interference was justified under Article 10 § 2.
a. “Prescribed by law”
- The
Court observes that the order was authorised by the common law
principle in Norwich Pharmacal and by the operation of section
10 of the 1981 Act, as interpreted in subsequent case-law. The
interference was therefore “prescribed by law” within the
meaning of Article 10 § 2 (see Goodwin v. the United
Kingdom, 27 March 1996, § 31-33, Reports of
Judgments and Decisions 1996 II). This was not contested by
the parties.
b. Legitimate aim
- The
purpose of the interference was variously suggested to be to protect
the rights of others, to prevent the disclosure of information
received in confidence and to prevent crime. The Court observes that
investigation and prosecution of crime are generally matters
conducted by the State. In the present case, the Norwich
Pharmacal proceedings were brought by a private party. The Court
further observes that in his judgment Sedley LJ emphasised that
Interbrew's prima facie entitlement to delivery up of the
documents had been established solely because it might enable them to
ascertain the identity of the proper defendant to a breach of
confidence action, thereby preventing future leaks of its
confidential information, and to take action against X to recover
damages for losses already sustained (see paragraph 27 above).
In the circumstances, the Court considers that the interference in
this case was intended to protect the rights of others and to prevent
the disclosure of information received in confidence, both of which
are legitimate aims.
c. “Necessary in a democratic society”
i. General principles
- The
Court reiterates that freedom of expression constitutes one of the
essential foundations of a democratic society and that, in that
context, the safeguards guaranteed to the press are particularly
important. Furthermore, protection of journalistic sources is one of
the basic conditions for press freedom. Without such protection,
sources may be deterred from assisting the press in informing the
public on matters of public interest. As a result, the vital “public
watchdog” role of the press may be undermined and the ability
of the press to provide accurate and reliable reporting may be
adversely affected. Having regard to the importance of the protection
of journalistic sources for press freedom in a democratic society and
the potentially chilling effect that an order for disclosure of a
source has on the exercise of that freedom, such a measure cannot be
compatible with Article 10 unless it is justified by an overriding
requirement in the public interest (see Goodwin, cited above,
§ 39).
-
The Court recalls that as a matter of general principle, the
“necessity” of any restriction on freedom of expression
must be convincingly established. It is for the national authorities
to assess in the first place whether there is a “pressing
social need” for the restriction and, in making their
assessment, they enjoy a certain margin of appreciation. In
the present context, however, the national margin of appreciation is
circumscribed by the interest of democratic society in ensuring and
maintaining a free press. This interest will weigh heavily in the
balance in determining whether the restriction was proportionate to
the legitimate aim pursued. The Court reiterates that limitations on
the confidentiality of journalistic sources call for the most careful
scrutiny by the Court (Goodwin, cited above, § 40).
- The
Court's task, in exercising its supervisory function, is not to take
the place of the national authorities but rather to review the case
as a whole, in the light of Article 10, and consider whether the
decision taken by the national authorities fell within their margin
of appreciation. The Court must therefore look at the interference
and determine whether the reasons adduced by the national authorities
to justify it are “relevant and sufficient” (Handyside
v. the United Kingdom, 7 December 1976, § 50, Series A
no. 24 and Goodwin, cited above, § 40).
- The
Court reiterates that under the terms of Article 10 § 2, the
exercise of freedom of expression carries with it duties and
responsibilities which also apply to the press. Article 10 protects a
journalist's right – and duty – to impart information on
matters of public interest provided that he is acting in good faith
in order to provide accurate and reliable information in accordance
with the ethics of journalism (Fressoz and Roire v. France
[GC], no. 29183/95, § 54, ECHR 1999 I and Bladet
Tromsø and Stensaas v. Norway [GC], no. 21980/93,
§ 65, ECHR 1999 III).
- In
the case of disclosure orders, the Court notes that they have a
detrimental impact not only on the source in question, whose identity
may be revealed, but also on the newspaper against which the order is
directed, whose reputation may be negatively affected in the eyes of
future potential sources by the disclosure, and on the members of the
public, who have an interest in receiving information imparted
through anonymous sources and who are also potential sources
themselves (see, mutatis mutandis, Voskuil v. the
Netherlands, no. 64752/01, § 71, 22 November 2007). While it
may be true that the public perception of the principle of
non-disclosure of sources would suffer no real damage where it was
overridden in circumstances where a source was clearly acting in bad
faith with a harmful purpose and disclosed intentionally falsified
information, courts should be slow to assume, in the absence of
compelling evidence, that these factors are present in any particular
case. In any event, given the multiple interests in play, the Court
emphasises that the conduct of the source can never be decisive in
determining whether a disclosure order ought to be made but will
merely operate as one, albeit important, factor to be taken into
consideration in carrying out the balancing exercise required under
Article 10 § 2.
ii. Application of the principles to the present case
- The
Court recalls that, in the Goodwin case, it was concerned with
the grant of an order for the production of the applicant
journalist's notes of a telephone conversation identifying the source
of the disclosure of information in a secret draft corporate plan of
the claimant company which had disappeared, as well as of any copies
of the plan in his or his employer's possession. The order had been
made by the domestic courts primarily on the grounds of the threat of
severe damage to the company's business, and consequently to the
livelihood of its employees, which would arise from disclosure of the
information in their corporate plan while refinancing negotiations
were continuing. The Court noted that a vital component of the threat
of damage to the company had already been neutralised by an
injunction to prevent dissemination of the confidential information
by the press. While accepting that the disclosure order served the
further purpose of bringing proceedings against the source to recover
possession of the missing document and to prevent further
dissemination of the contents of the plan, as well as of unmasking a
disloyal employee or collaborator, the Court observed that, in order
to establish the necessity of disclosure for the purposes of Article
10, it was not sufficient for a party seeking disclosure to show
merely that it would be unable without disclosure to exercise the
legal right or avert the threatened legal wrong on which it based its
claim. The considerations to be taken into account by the
Convention institutions in their review under Article 10 tipped the
balance in favour of the interest of a democratic society in securing
a free press. On the facts of that case, the Court stated (at §
45) that it could not find that the company's interests
“......in eliminating, by proceedings against the
source, the residual threat of damage through dissemination of the
confidential information otherwise than by the press, in obtaining
compensation and in unmasking a disloyal employee or collaborator
were, even if considered cumulatively, sufficient to outweigh the
vital public interest in the protection of the applicant journalist's
source”.
-
In the Court of Appeal in the present case, Sedley LJ found that the
“relatively modest leak” of which Interbrew was entitled
to complain did not diminish the seriousness for Interbrew of its
repetition. He concluded that the public interest in protecting the
source of such a leak was not sufficient to withstand the
countervailing public interest in allowing Interbrew to seek justice
against the source (see paragraph 27 above). What was said to matter
critically in arriving at this conclusion was the evident purpose of
X, which was “on any view a maleficent one, calculated to do
harm whether for profit or for spite ...”.
- The
Court notes that in Goodwin, it did not consider allegations
as to the source's “improper motives” to be relevant to
its finding that there was a violation of Article 10 in that case,
notwithstanding the High Court's conclusion that the source's
purpose, in the Goodwin case, in disclosing the leaked
information was to “secure the damaging publication of
information which he must have known to be sensitive and
confidential” (see Goodwin, §§ 15 and 38,
where it was argued by the Government that the source had acted mala
fide and should therefore not benefit from protection under
journalists' privilege of non-disclosure of sources). While the Court
considers that there may be circumstances in which the source's
harmful purpose would in itself constitute a relevant and sufficient
reason to make a disclosure order, the legal proceedings against the
applicants did not allow X's purpose to be ascertained with the
necessary degree of certainty. The Court would therefore not
place significant weight on X's alleged purpose in the present case.
- As
regards the allegations that the leaked document had been doctored,
the Court recalls the duties and responsibilities of journalists to
contribute to public debate with accurate and reliable reporting. In
assessing whether a disclosure order is justified in cases where the
leaked information and subsequent publication are inaccurate, the
steps taken by journalists to verify the accuracy of the information
may be one of the factors taken into consideration by the courts,
although the special nature of the principle of protection of sources
means that such steps can never be decisive but must be considered in
the context of the case as a whole (see paragraph 63, above). In any
event, the domestic courts reached no conclusion as to whether the
leaked document was doctored, the Court of Appeal observing that it
had no way of knowing, any more than the applicants, whether X, if
cornered, would demonstrate that he had simply assembled authentic
documents from different places within Interbrew, GS and Lazards. The
Court likewise considers that it has not been established with the
necessary degree of certainty that the leaked document was not
authentic. The authenticity of the leaked document cannot
therefore be seen as an important factor in the present case.
- It
remains to be examined whether, in the particular circumstances of
the present case, the interests of Interbrew in identifying and
bringing proceedings against X with a view to preventing further
dissemination of confidential information and to recovering damages
for any loss already sustained are sufficient to override the public
interest in the protection of journalistic sources.
- In
this respect, the Court observes at the outset that where an
unauthorised leak has occurred, a general risk of future unauthorised
leaks will be present in all cases where the leak remains undetected
(see Goodwin, §§ 17-18 and 41). In
the present case, the Court notes that Interbrew received notice,
prior to publication of the initial FT article, that a copy of
the leaked document had been obtained and that there was an intention
to publish the information it contained. In contrast to the stance
taken by the company in the Goodwin case, Interbrew did not
seek an injunction to prevent publication of the allegedly
confidential and sensitive commercial information. Moreover, the aim
of preventing further leaks will only justify an order for disclosure
of a source in exceptional circumstances where no reasonable and less
invasive alternative means of averting the risk posed are available
and where the risk threatened is sufficiently serious and defined to
render such an order necessary within the meaning of Article 10 §
2. It is true that in the present case the Court of Appeal found that
there were no less invasive alternative means of discovering the
source, since Kroll, the security and risk consultants instructed by
Interbrew to assist in identifying X, had failed to do so. However,
as is apparent from the judgments of the domestic courts, full
details of the inquiries made were not given in Interbrew's evidence
and the Court of Appeal's conclusion that as much as could at that
time be done to trace the source had been done by Kroll was based on
inferences from the evidence before the court.
- While,
unlike the applicant in the Goodwin case, the applicants in
the present case were not required to disclose documents which would
directly result in the identification of the source but only to
disclose documents which might, upon examination, lead to such
identification, the Court does not consider this distinction to be
crucial. In this regard, the Court emphasises that a chilling effect
will arise wherever journalists are seen to assist in the
identification of anonymous sources. In the present case, it was
sufficient that information or assistance was required under the
disclosure order for the purpose of identifying X (see Roemen and
Schmit v. Luxembourg, no. 51772/99, § 47, ECHR
2003 IV).
- The
Court, accordingly, finds that, as in the Goodwin case,
Interbrew's interests in eliminating, by proceedings against X, the
threat of damage through future dissemination of confidential
information and in obtaining damages for past breaches of confidence
were, even if considered cumulatively, insufficient to outweigh the
public interest in the protection of journalists' sources.
- As
to the applicants' complaint that there was an inequality of arms
during the Norwich Pharmacal proceedings which constituted a
breach of the procedural aspect of their right to freedom of
expression, the Court considers that, having regard to its above
findings, it is not necessary to examine this complaint separately.
- In
conclusion, the Court finds that there has been a violation of
Article 10 of the Convention.
II. ALLEGED VIOLATION OF ARTICLE 6 § 1 OF THE
CONVENTION
- The
applicants further complained of the fact that there was, in their
view, an inequality of arms during the legal proceedings. They relied
on Article 6 § 1 of the Convention, which provides, insofar as
relevant, as follows:
“In the determination of his civil rights and
obligations ... everyone is entitled to a fair ... hearing ... by [a]
... tribunal ...”
- The
Court observes that these complaints raise the same issues and relate
to the same facts as those examined in the context of the applicants'
complaints under Article 10. The complaint should therefore be
declared admissible. However, the Court concludes that there is no
need to examine separately the complaints under Article 6 § 1
having regard to its conclusion under Article 10.
III. ALLEGED VIOLATION OF ARTICLE 8 OF THE CONVENTION
- The
applicants complained of a violation of their right to respect for
their home and correspondence as a result of the court order
requiring them to deliver up the leaked documents to Interbrew. They
relied on Article 8 of the Convention, which provides, insofar as
relevant, as follows:
“1. Everyone has the right to respect
for his ... home and his correspondence.
2. There shall be no interference by a public
authority with the exercise of this right except such as is in
accordance with the law and is necessary in a democratic society ...
for the prevention of disorder or crime ... or for the protection of
the rights and freedoms of others.”
- The
applicants also alleged that the inequality of arms during the
Norwich Pharmacal proceedings constituted a breach of the
procedural limb of their right to respect for their home and
correspondence.
- The
Court observes that these complaints raise the same issues and relate
to the same facts as those examined in the context of the applicants'
complaints under Article 10. The complaint should therefore be
declared admissible. However, the Court concludes that there is no
need to examine separately the complaints under Article 8 having
regard to its conclusion under Article 10.
IV. APPLICATION OF ARTICLE 41 OF THE CONVENTION
- Article 41 of the Convention provides:
“If the Court finds that there has been a
violation of the Convention or the Protocols thereto, and if the
internal law of the High Contracting Party concerned allows only
partial reparation to be made, the Court shall, if necessary, afford
just satisfaction to the injured party.”
Costs and expenses
1. The applicants' claims
- The
applicants claimed reimbursement of costs and expenses incurred in
the proceedings before the domestic courts and before this Court,
together with sums paid to defray the costs of Interbrew in the same
proceedings. The applicants calculated the total value of their claim
to be GBP 766,912.62, composed as follows.
a. The Financial Times
- The
FT claimed a total of GBP 141,853.12 in costs and expenses.
This sum included:
GBP 72,855 in
respect of professional fees;
GBP 42,211.88 in
respect of counsel's fees;
GBP 2,966.01 in
respect of disbursements;
GBP 2,943.38 for
work by Clifford Chance in connection with the proceedings before
the Court; and
GBP 20,876.85 in
respect of costs ordered to be paid to Interbrew.
- The
above sums were inclusive of VAT.
b. The Independent
- The
Independent claimed a total of GBP 105,120.73 in costs and
expenses. This sum included:
GBP 81,738.88 in
respect of professional and counsel's fees and disbursements;
GBP 2,505 for work
by Clifford Chance in connection with the proceedings before the
Court; and
GBP 20,876.85 in
respect of costs ordered to be paid to Interbrew.
- The
above sums were exclusive of VAT, with the exception of the sums paid
to Interbrew which were inclusive of any VAT applicable.
c. The Guardian
- The
Guardian claimed a total of GBP 194,820 in costs and expenses.
This sum included:
GBP 151,837.68 in
respect of professional fees;
GBP 17,425 in
respect of counsel's fees;
GBP 2,175.47 in
respect of disbursements;
GBP 2,505 for work
by Clifford Chance in connection with the proceedings before the
Court; and
GBP 20,876.85 in
respect of costs ordered to be paid to Interbrew.
- The
above sums were exclusive of VAT, with the exception of the sums paid
to Interbrew which were inclusive of any VAT applicable.
d. The Times
- The
Times claimed a total of GBP 58,349.02 in costs and expenses.
This sum included:
GBP 20,075.01 in
respect of counsel's fees in the domestic proceedings;
GBP 400 in respect
of disbursements;
GBP 16,997.16 for
work by solicitors and counsel in connection with the proceedings
before the Court; and
GBP 20,876.85 in
respect of costs ordered to be paid to Interbrew.
- The
above sums were exclusive of VAT, with the exception of the sums paid
to Interbrew which were inclusive of any VAT applicable.
e. Reuters
- Reuters
claimed a total of GBP 266,769.75 in costs and expenses. This sum
included:
GBP 128,878.76 in
respect of professional and counsel's fees in the domestic
proceedings;
GBP 44,277.68 for
work by solicitors and counsel in connection with the proceedings
before the Court;
GBP 72,736.46 in
respect of costs incurred in connection with the investigation by
the Financial Services Authority; and
GBP 20,876.85 in
respect of costs ordered to be paid to Interbrew.
- With
the exception of the sums paid to Interbrew, which were inclusive of
any VAT applicable, it is not clear whether the above sums were
exclusive or inclusive of VAT.
2. The Government's submissions
- The
Government considered the sums claimed to be excessive. They pointed
to the large and unexplained discrepancies between the sums claimed
by each of the five applicants. They further submitted that the work
carried out by numerous lawyers on behalf of the applicants resulted
in unnecessary duplication.
- The
Government also pointed to the inclusion in the applicants' claim of
sums incurred in respect of a separate investigation by the Financial
Services Authority (“FSA”). They highlighted that the FSA
was concerned, in pursuance of its regulatory functions, with the
determination of whether an offence had been committed under the
Financial Services Act 1986. This was a separate matter from the
legal proceedings which formed the basis of the applicants' claim
before this Court. Such expenditure was therefore, in the
Government's view, irrecoverable. The Government highlighted the
failure of the applicants, with the exception of Reuters, to
specify how much of their costs and expenses were incurred as a
result of the FSA investigation. On the basis that 27 per cent of the
sum claimed by Reuters related to the FSA investigation, the
Government invited the Court to make a corresponding reduction to the
sums claimed by the other applicants, with the possible exception of
The Times.
- The
Government also complained that the applicants had failed to provide
adequate details of the breakdown of work carried out and had further
failed to explain invoices which related to periods long after
domestic proceedings had finished. It was apparent that some items
included in the invoices submitted were in respect of work which was
unrelated to the legal proceedings. The Government therefore invited
the Court to make a further reduction to the sums claimed.
- Finally,
the Government disputed the level of costs claimed for the
application to this Court. They pointed out that the two applicants
which had separately listed all costs incurred in the present
application had incurred GBP 64,787.32 between them, which the
Government considered to be excessive.
3. The Court's assessment
- According
to the Court's case-law, an applicant is entitled to the
reimbursement of costs and expenses only in so far as it has been
shown that these have been actually and necessarily incurred and were
reasonable as to quantum (see, for example, Roche v. the United
Kingdom [GC], no. 32555/96, § 182, ECHR 2005 X).
- In
the present case, the Court considers that the sums claimed by the
applicants are unreasonably high and that a significant reduction is
accordingly required. First, the Court agrees with the Government
that sums related to the FSA investigation are not recoverable in the
present proceedings. Second, in respect of the number of hours billed
and the general rates charged by solicitors and counsel in the
applicants' case, the Court finds these to be excessive. In Reuters'
case, for example, the Court notes that a significant amount of work
was charged at GBP 475 per hour. The Court further observes that
there are significant and unexplained discrepancies between the sums
claimed by each of the five applicants. Finally, the Court considers
that there has been unreasonable duplication of work in the
instruction of numerous solicitors, both domestically and in the
proceedings before the Court. However, the Court also observes that
the sums claimed by the applicants include a total of GBP 104,384.25
paid in respect of Interbrew's costs in the domestic legal
proceedings.
- Regard
being had to the information in its possession, the Court therefore
considers it reasonable to award to the applicants the sum of
EUR 160,000 in total, inclusive of any tax that may be
chargeable to the applicants, covering costs under all heads.
B. Default interest
- The
Court considers it appropriate that the default interest should be
based on the marginal lending rate of the European Central Bank, to
which should be added three percentage points.
FOR THESE REASONS, THE COURT UNANIMOUSLY
- Declares the application admissible;
- Holds that there has been a violation of Article
10 of the Convention;
- Holds that there is no need to examine the
complaint under Article 6 § 1 of the Convention;
- Holds that there is no need to examine the
complaint under Article 8 of the Convention;
- Holds
(a) that
the respondent State is to pay the applicants, within three months
from the date on which the judgment becomes final in accordance with
Article 44 § 2 of the Convention, EUR 160,000
(one hundred and sixty thousand euros) in total, inclusive of any tax
that may be chargeable to the applicants, to be converted into pounds
sterling at the rate applicable at the date of settlement, in respect
of costs and expenses;
(b) that
from the expiry of the above-mentioned three months until settlement
simple interest shall be payable on the above amount at a rate equal
to the marginal lending rate of the European Central Bank during the
default period plus three percentage points;
- Dismisses the remainder of the applicants' claim
for just satisfaction.
Done in English, and notified in writing on 15 December 2009,
pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.
Lawrence Early Lech Garlicki
Registrar President
