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Annex - Breach of confidence

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Introduction
 
 

1. In its report Breach of Confidence[616] the English Law Commission considered the role of the duty of confidence in protecting improperly obtained information. The Commission noted that "it is a glaring inadequacy of the present law that ... the confidentiality of information improperly obtained, rather than confidentially entrusted by one person to another, may be unprotected." The Commission recommended that this situation be redressed by treating improperly obtained information as being impressed by a duty of confidence. The Commission identified the following situations as ones where it is reasonable to impose the duty:
 
 

"(i) A person should owe an obligation of confidence in respect of information acquired in the following circumstances:
 
 

(a) by unauthorised taking, handling or interfering with anything containing the information;

(b) by unauthorised taking, handling or interfering with anything in which the matter containing the information is for the time being kept;

(c) by unauthorised use or interference with a computer or similar device in which data is stored;

(d) by violence, menace or deception;

(e) while he is in a place where he has no authority to be;

(f) by a device made or adapted solely or primarily for the purpose of surreptitious surveillance where the user would not without the use of the device have obtained the information;

(g) by any other device (excluding ordinary spectacles and hearing aids) where he would not without using it have obtained the information, provided that the person from whom the information is obtained was not or ought not reasonably to have been aware of the use

(h) of the device and ought not reasonably to have taken precautions to prevent the information being so acquired.
 
 

(ii) An obligation of confidence shall be imposed on a person who jointly participates in the acquisition of information if, though he did not use any of the improper means listed in paragraph (i) above, he personally acquired the information and he is, or ought to be, aware that the information was acquired by the use of any such improper means by his fellow participator.
 
 

(iii) An obligation of confidence should not arise in accordance with paragraph (i) above where the information has been obtained by a person in the course of the lawful exercise of an official function in regard to the security of the State or the prevention, investigation or prosecution of crime or by a person acting in pursuance of any statutory provision so far as the information has been disclosed or used for those purposes or for any purpose expressly or impliedly authorised by a statutory provision."[617]
 
 

2. The Law Commission explains that it would be beyond its terms of reference to deem unlawful the use of any surreptitious surveillance device, and such a measure would be additional.
 
 

3. Items (f) and (g) are most directly relevant to our terms of reference. The distinction is made between devices primarily designed for surveillance purposes, and those lacking that specific purpose but which may nonetheless be so used e.g. binoculars or tape recorders. In both cases, the Commission recommends that the duty of confidence apply, provided that the information would not have been acquired without the use of such a device. However, the recommendation accommodates the fact that only in the former situation should it be assumed that the person from whom the information is obtained is not aware of the device's use. Professor Wacks has identified a difficulty of the clause is that it is potentially restrictive:
 
 

"by prescribing a catalogue of specific forms of conduct there is a danger, especially in an area which is constantly undergoing technological change, of new methods of intrusion developing which call for legislative adaptation. A preferable analysis (suggested by the Scottish Law Commission) is to refer in a general manner to the acquisition by illegal means or by means which would be regarded as improper by a reasonable man."[618]
 
 

4. Whichever formulation is adopted, also relevant is the public interest defence in breach of confidence cases. Under the Law Commission's proposals: "It should be for the defendant to satisfy the court that there was a public interest involved in the relevant disclosure or use of the information."
 
 

5. On 12 March 1985 the Home Secretary announced the Government's intention to legislate:
 
 

"The Commission recommends that people who obtain information by `improper means' - which includes the use of surveillance devices, as the Hon Gentleman knows - would be subject to an obligation not to use or disclose information. If they did so, they would be civilly liable to an action for breach of confidence. That approach has, I believe, the considerable advantage of concentrating on the real mischief -that is, the use to which information obtained is put. It provides the victim with a direct means of redress. I am able to announce today that the Government intends to introduce legislation based on the Law Commission's proposals. This will offer people an important and wholly new safeguard in an area of legitimate concern."[619]
 
 

6. By 1990 legislation had still not been introduced and the Calcutt Committee declined to generally endorse the Commission's proposals, without adverting to this specific recommendation. That Committee's terms of reference were limited to "activities of the press". But other commentators have continued to urge the adoption of the draft clause quoted above. James Michael reviewed the disparate recommendations of the Younger Committee (1972), Law Commission, and the Calcutt Committee. The Younger Committee (whose terms of reference were restricted to the private sector) included a recommendation that it be a civil wrong "to disclose or otherwise use information which the discloser knows, or in all the circumstances ought to have known, was obtained by illegal means. " James Michael concluded that: "of the three proposals, the Law Commission's draft bill was the most carefully thought out [it represented 8 years of work] and the Government should not need a nudge from Sir David Calcutt to carry out the undertaking given by Leon Brittan when he was Home Secretary to legislate on the basis of it."[620]
 
 

7. Similarly, Patrick Milmo wondered:
 
 

"why the current demand for legislation to counter press intrusion on privacy cannot be met by [the Law Commission's draft] Bill rather than the vaguely formulated and controversial new law of privacy proposed by the Lord Chancellor."[621]
 
 

Recent developments in the law of confidence
 
 

8. The difficult question is whether, a third party, C, who intercepts a communication between A and B is liable to either A or B for breach of confidence. Where confidential information is acquired by the use of `reprehensible means' (electronic surveillance, spying, and other forms of intrusive conduct), the authorities suggest the third party is not liable when he uses it. The apparent explanation for this `glaring inadequacy'[622] (which means that if confidential information is obtained by improper means, it receives less protection by the law than if it were confided to a party who was under an obligation not to use or disclose it) is the absence of a relationship of confidence between the party who wishes to keep the information confidential, on the one hand, and another party, on the other.
 
 

9. But this may be a difficult position to defend. Thus, it has been argued[623] that in these circumstances the defendant, since he knew that the information was confidential (why else would he be surreptitiously obtaining it?), is under an imputed duty no different from that which applies to the ordinary recipient of confidential information.
 
 

10. Some breach of confidence cases lend support to the view that protection is not confined to consensual disclosures of confidential information. In Lord Ashburton v Pape,624 the Court of Appeal, in a decision which involved a breach of confidence by a solicitor's clerk, referred to its power to enjoin the publication of information `improperly or surreptitiously obtained'. More significantly, the Supreme Court of Queensland, in Franklin v Giddens[625] allowed an action for breach of confidence where the defendant had, in the absence of any confidential relationship, stolen genetic information in the form of cuttings from the plaintiff's unique strain of cross-bred nectarines. Dunn J said:[626]
 
 

"I find myself quite unable to accept that a thief who steals a trade secret, with the intention of using it in commercial competition with its owner, to the detriment of the latter, and so uses it, is less unconscionable than a traitorous servant."
 
 

11. A persuasive case in support of the contention that the eavesdropper may be caught by the action for breach of confidence is the important decision in Francome v Mirror Group Newspapers Ltd[627] where the Court of Appeal granted an injunction to restrain the defendants from using information that had been obtained (by parties unknown) through the use of radio-telephony. The case conflicts with the judgment in Malone v Commissioner of Police of the Metropolis (No 2)[628] in which Sir Robert Megarry VC declined to make a declaration that telephone-tapping by the police was a breach of the victim's right of confidentiality in the conversations. In his view, an individual who divulges confidential information cannot complain when someone within earshot overhears his conversation. In the case of telephone conversations:
 
 

"The speaker is taking such risks of being overheard as are inherent in the system ... In addition so much publicity in recent years has been given to instances (real or fictional) of the deliberate tapping of telephones that it is difficult to envisage telephone users who are genuinely unaware of this possibility. No doubt a person who uses a telephone to give confidential information to another may do so in such a way as to impose an obligation of confidence on that other : but I do not see how it could be said that any such obligation is imposed on those who overhear the conversation, whether by means of tapping or otherwise."[629]
 
 

12. He was in no doubt that `a person who utters confidential information must accept the risk of any unknown over-hearing that is inherent in the circumstances of the communication'.[630] Relying on this dictum, the defendants in Francome argued that the plaintiffs had no cause of action against them or the eavesdroppers for breach of an obligation of confidence. The Court of Appeal rejected this contention on the ground that in Malone the court was expressly concerned only with telephone-tapping effected by the police for the prevention, detection and discovery of crime and criminals. Fox LJ distinguished the two forms of intrusion in the following terms:
 
 

"Illegal tapping by private persons is quite another matter since it must be questionable whether the user of a telephone can be regarded as accepting the risk of that in the same way as, for example, he accepts the risk that his conversations may be overheard in consequence of the accidents and imperfections of the telephone system itself."[631]
 
 

13. In other words a telephone user's `reasonable expectation of privacy' may be vindicated when the eavesdropper turns out to be a private individual, but not when it is the police acting under lawful authority. And it has been suggested that this judgment suffers from a `fundamental misconception':
 
 

"That because equity acts in personam it responds to some personal dealing between the parties so that the eavesdropper is in a quite different case to the confidant. But what the maxim indicates is that equity responds to unconscionable conduct by the defendant; this may but need not flow from any consensual dealing with the plaintiff. Accordingly, it requires no great effort, no straining of principle to restrain the activities of the eavesdropper."[632]
 
 

14. The absence of a relationship between the parties has not inhibited the Hong Kong courts from imposing liability for breach of confidence. In Koo and Chiu v Lam,633 the Hong Kong Court of Appeal recently held that a medical researcher was under a duty of confidence in respect of a questionnaire that had been prepared by a `rival' research team and which, by the appellant's admission, he had used formulating his own questionnaire. It is unfortunate that there is no clear evidence as to how the appellant obtained access to the respondents' questionnaire. Penlington JA, commenting upon the trial judge's finding that the appellant had obtained the information `surreptitiously', remarked:
 
 

"He did somehow come into possession of the document, and he must have known it was confidential because of the amount of work which had gone into its preparation. It had not been given to him by the persons whose information it was and again he must have realised he was not entitled to use it."634
 
 

15. This dictum takes the law considerably further than both Franklin and Francome for in those decisions the `surreptitious taker' acted contrary to law (theft and an offence contrary to the UK Wireless Telegraphy Act 1949, respectively). In Koo, Penlington JA emphasised that the finding of `surreptitious obtaining' did not extend as far as theft which, he said `cannot be supported by the evidence'.[635] But if surreptitious taking extends to the mere fact that the appellant `did somehow come into possession' of the questionnaire with the knowledge that it was confidential, the Hong Kong Court of Appeal appears (by accident or design) to have grasped the nettle and embraced the notion of receipt-based liability, albeit under cover of surreptitiousness rather than unconscionability.
 
 

16. Some caution is, however, required. First, the actual finding, at first instance, that the information was imparted in circumstances imposing an obligation of confidence was not challenged upon appeal.[636] Secondly the rival teams of researchers worked at the same university which implied a `course of dealing' between the parties during which the appellant arguably became aware that the questionnaire was confidential. This could, to some extent, approximate to a relationship of confidence on orthodox principles.
 
 

17. The decision is plainly not one of a stranger stumbling across a diary in the street. Nevertheless, assuming it is correct, the judgement demonstrates the utility of the breach of confidence action where the strict requirement of a prior relationship is relaxed. It does not, however, remove all the obstacles in the path of the protection of `privacy', for the finding that the appellant knew that the information contained in the questionnaire was confidential was derived less from the nature of the information than from his personal experience, and the limited relationship between the parties.
 
 

18. Nevertheless, to catch the eavesdropper, the Younger Committee considered legislation necessary:[637]
 
 

"We think that the damaging disclosure or other damaging use of information acquired by any unlawful act, with knowledge of how it was acquired, is an objectionable practice against which the law should afford protection. We recommend therefore that it should be a civil wrong, actionable at the suit of anyone who has suffered damage thereby, to disclose or otherwise use information which the discloser knows, or in all the circumstances ought to have known, was obtained by illegal means. It would be necessary to provide defences to cover situations where the disclosure of the information was in the public interest or was made in privileged circumstances. We envisage that the kinds of remedy available for this civil wrong would be similar to those appropriate to an action for breach of confidence."
 
 

19. One difficulty with this approach is that the Younger Committee rejected the introduction of an action for unwanted publicity; the only remedies considered necessary in cases of `public disclosure' were the action for breach of confidence and this one which will only assist the plaintiff where the information was acquired unlawfully. This means that where, say, a journalist obtains personal information lawfully, the plaintiff will have no remedy. But should unlawful means be employed, an action may lie, subject to the proposed defence of 'public interest'. In other words, in the view of the Younger Committee, the only circumstances under which a civil action would lie where there has been disclosure of personal information are where the means used to obtain the information were unlawful. And this confuses the interests in issue in `intrusion' with those that arise in `disclosure'. Since the availability of remedy is, prima facie, made dependent upon the use of illegal means, the question of whether there has been an intrusion becomes a crucial criterion in determining whether the plaintiff has a remedy at all. This factor ought not to be of primary importance in cases of disclosure. Equally, unlawful means ought not to be permitted merely because the eventual disclosure is justified. The two questions should be kept separate.
 
 

20. The Law Commission recognise that there is an important distinction between the imposition of an obligation of confidence in the normal case, and in the case of improper acquisition, when they state:[638]
 
 

"There is undoubtedly a considerable difference in nature between on the one hand the obligation imposed on a person for breaking an undertaking to another to keep information confidential and, on the other, an obligation imposed on a person as a result of his having used improper means to gain information which may, indeed, be so secret that the plaintiff has never entrusted it to anyone, not even in confidence. Nevertheless, we believe that it is possible to encompass both forms of behaviour within the framework of our new statutory tort."
 
 

21. They conclude that the common feature in both cases is that the receiver of information is in a position where it is reasonable to impose a duty of confidence upon him. They therefore propose a number of situations[639] in which the acquirer of information should, by virtue of the manner in which he has acquired it, be treated as being subject to an obligation of confidence in respect of such information acquired in the following circumstances:
 
 

(a) by unauthorized taking, handling, or interfering with anything containing the information;

 (b) by unauthorized taking, handling, or interfering with anything in which the matter containing the information is for the time being kept;

 (c) by unauthorized use of or interference with a computer or similar device in which data are stored;

 (d) by violence, menace, or deception;

 (e) while he is in a place where has no authority to be;

 (f) by a device made or adapted solely or primarily for the purpose of surreptitious surveillance where the user would not without its use have obtained the information;

 (g) by any other device (excluding spectacles and hearing aids) where he would not, without using it, have obtained the information, provided that the person from whom the information is obtained was not or ought not reasonably to have been aware of the use of the device and ought not reasonably to have taken precautions to prevent the information being so acquired.
 
 

22. This approach is potentially restrictive: by prescribing a catalogue of specific forms of conduct there is a danger, especially in an area which is constantly undergoing technological change, of new methods of intrusion developing which call for legislative adaptation. A preferable analysis (suggested by the Scottish Law Commission)[640] is to refer in a general manner to the acquisition by illegal means or by means which would be regarded as improper by a reasonable person. This has the advantage of anticipating advances in electronic surveillance technology. The English Law Commission would impose automatic liability `without qualification'[641] for the use of confidential information upon a person who obtains such information with the assistance of a device which is `clearly designed or adapted solely or primarily for the surreptitious surveillance of persons, their activities, communications or property'.[642]
 
 

23. They draw a distinction between such devices and those, such as binoculars or tape recorders, which are not in themselves designed primarily for that purpose, although they are capable of being so used. In the case of the latter, liability for the subsequent use or disclosure of the information should arise only if the subject was not or ought not reasonably to have been aware of the use of the device and failed to take precautions to prevent its acquisition.[643] This would seem to be a sensible distinction.
 
 

24. The Scottish Law Commission would impose an automatic obligation on a person not to use or disclose any information so acquired `however trivial it may seem to an outsider'.[644] The obligation is therefore not dependent on the nature of the information acquired; it is not restricted (though, in practice, will normally relate) to confidential information. While consistent with the general concern to prevent intrusive activities (and not merely their consequences), this proposal again demonstrates the different objectives of the control of intrusion, on the one hand, and the protection against the misuse of personal information, on the other. The former extends beyond (but may accommodate) the present concern with confidential information and, a fortiori, personal information, and is, of course, in any event, more satisfactorily dealt with by the criminal law or by administrative control.
 
 

25. No obligation of confidence should be imposed upon a `surreptitious taker' by virtue only that he used illicit means to obtain the information. Liability should always rest upon general principles of unconscionability; the fact that improper means were necessary to acquire the information is persuasive in deciding whether the defendant had constructive knowledge, but is not an inexorable rule of law.

26. To what extent, if at all, is the fact of intrusion punished by the action for breach of confidence? As in the American jurisprudence, the English case law suggests a tendency to confuse intrusion and disclosure. In Malone, the plaintiff's telephone had been tapped by the Post Office under a warrant signed by the Secretary of State; Malone being under suspicion of handling stolen goods. In the course of his judgment, Sir Robert Megarry VC, having adverted to Lord Denning's `just cause or excuse' formulation for the public interest defence,[645] remarks that `the question is ... whether there is just cause or excuse for the tapping and for the use made of the material obtained by the tapping'.[646] This is to confuse the two issues.

27. In Francome, the Court of Appeal upheld the granting of an interlocutory injunction to prevent the defendants from disclosing information concerning the jockey Peter Francome which had been obtained by telephone tapping. An important distinction between this decision and Malone is that in the latter the defendant was both the intruder and the potential discloser, whilst in Francome the intruders were not a party to the proceedings. Thus, maintaining the rigid and logical distinction suggested above, the only pertinent question here is whether the Daily Mirror received the information subject to an obligation not to disclose it to others. Again, the fact of the tapping does figure in this assessment, but only in so far as it might determine what reasonably constitutes unconscionable behaviour.
 
 

28. The analysis of Sir John Donaldson MR is in this respect correct. That he realised that intrusion was not in issue is clear from his comment that the question at trial `is likely to be whether the defendants can make any, and if so what, use of the fruits of [the illegal tapping]'.[647]

Reforming the law

29. In its Report on Breach of Confidence, the Law Commission advocated the creation of a statutory tort of breach of confidence. Having concluded that, under the existing principles of the equitable action for breach of confidence,[648] the plaintiff has no protection where information is surreptitiously taken from him (as opposed to his having imparted it to another in circumstances imposing an obligation of confidentiality[649]), the Commission proposed that if information were so acquired, the `surreptitious taker' and any person obtaining the information from him, with knowledge, was under an obligation of confidence by virtue solely of that surreptitious taking.[650]
 
 

30. This approach conflates disclosure and intrusion; the fact of intrusion is the basis upon which disclosure is to be prevented or compensated. And the Law Commission propose no separate sanctions against intrusion itself.[651] In clause 14(1)(b) of their draft bill, the Commission define recoverable damages to include those in respect of `any mental distress, and any mental or physical harm resulting from such distress' in consequence of the defendant's breach of confidence. This explicit restriction of those damages to distress suffered in `consequence of the breach'[652] suggests that, along with the narrowness of the Commission's terms of reference mentioned above, it is highly unlikely that the Commission envisaged an enhancement of these damages by virtue of additional distress caused by the intrusion.[653] The Law Commission Report proposed no sanction for the act of intrusion per se, preferring, as is logically consistent with its terms of reference, to use the intrusion as a springboard from which to attach an obligation of confidence to prevent or compensate disclosure.
 
 

31. In its report, the Calcutt Committee recommended that three forms of physical intrusion should be criminal offences, namely:
 
 

(a) Entering private property, without the consent of the lawful occupant, with intent to obtain personal information with a view to its publication;

 (b) Placing a surveillance device on private property, without the consent of the lawful occupant, with intent to obtain personal information with a view to its publication;

 (c) Taking a photograph, or recording the voice, of an individual who is on private property, without his consent, with a view to its publication with intent that the individual shall be identifiable.[654]
 
 

It proposed a public interest type defence to these offences.[655]
 
 

32. Just as the Law Commission concentrates exclusively on disclosure, so the Calcutt Committee directs its legislative recommendations at intrusion, leaving disclosure to the regulation of a newly formed Press Complaints Commission.[656] The prospect of confusion between the two issues is thus obviated.

33. The National Heritage Committee recommend the introduction of a Protection of Privacy Bill, one part of which concerns what the Committee call `the main civil offence', namely infringement of privacy and it is clear from the definition of that offence that liability attaches to both `obtaining and/or publishing' personal information.[657] Here, however, intrusion and disclosure are entirely separated, each, independently, giving rise to a cause of action. But, again, it is to be regretted that a public interest defence is proposed to apply both to acts of publication and to the obtaining of the personal information.[658] The bill includes provisions along the lines of the Calcutt Report for the introduction of criminal sanctions against certain intrusive techniques.[659]

[616] Law Commission Report No. 110 (Cmnd 8388)

[617] The Law Commission No 110, at para 6.46.

[618] R Wacks, Personal Information, at p 263.

[619] Quoted by James Michael in New Law Journal, May 4 1990 p 635.

[620] Solicitor Journal, 31 July 1992 p 744.

[621] New Law Journal, November 19 1993 p 1647.

[622] Law Commission Report (note 1 above), paras 5.5 and 6.28. See generally R Wacks, Privacy and Press Freedom (London: Blackstone Press, 1995), Chapters 3 and 5.

[623] G Jones, `Restitution of Benefits Obtained in Breach of Another's Confidence' (1970) 86 LQR 463.

624 [1913] 2 Ch 469, 475; approved in Commonwealth of Australia v John Fairfax & Sons Ltd (1980) 147 CLR 39, 50.

[625] [1978] 1 Qd R 72.

[626] Above, 80.

[627] [1984] 1 WLR 892.

[628] [1979] 2 All ER 620.

[629] Above, 376.

[630] Above, 376.

[631] [1984] 1 WLR 892, 900.

[632] Meagher et al , p 827.

633 Civil Transcript No 116 (1992).

634 Above, 30.

[635] Above, 29.

[636] One is bound to ask `why not?' The decision of the trial judge represents a significant divergence from existing authority.

[637] Younger Report, para 632.

[638] Law Commission Report, para 6.30.

[639] Above, para 6.46.

[640] Scottish Law Commission, Breach of Confidence (Scot Law Com No 90, 1984), paras 4.36-41.

[641] Law Commission Report, para 6.35.

[642] Above.

[643] Above, para 6.38.

[644] Scottish Law Commission, para 4.38.

[645] See Fraser v Evans [1969] 1 QB 349, 362.

[646] [1979] Ch 345, 377.

[647] [1984] 1 WLR 892, 895.

[648] See Saltman Engineering Co Ltd v Campbell Engineering Co Ltd [1963] 3 All ER 413.

[649] In Para 5.5 of the Report, the Law Commission states: `It is a glaring inadequacy of the present law that ... the confidentiality of information improperly obtained, rather than confidentially entrusted by one person to another, may be unprotected'. The reasoning by which the Commission reaches this conclusion is set out in paras 4.7-4.10.

[650] This proposal is embodied in clause 5 of the draft bill (ibid, Appendix A).

[651] Though this may be readily explained by reference to the terms of reference of the Commission's enquiry. The relevant term asks the Commission to : `consider and advise what remedies, if any, should be provided for persons ... who have suffered loss or damage in consequence of the disclosure or use of information unlawfully obtained and in what circumstances such remedies should be available'. (ibid, Para 1.1)

[652] Clause 14(1)(b) of the draft bill.

[653] This view is supported by para 6.106 of the Report where the Commission confine its analysis to `mental distress' suffered as a result of the breach of confidence.

[654] Calcutt Report, para 6.33.

[655] Above, para 6.35. The defences are : `(a) for the purpose of preventing, detecting or exposing the commission of any crime, or other seriously anti-social conduct; (b) for the protection of public health or safety; or (c) under any lawful authority'. This approach was again proposed by the Calcutt in his Review, with minor alterations (paras 7.1-7.26).

[656] Above, paras 15.1-15.31.

[657] Above.

[658] Above, and see para 55.

[659] Above, para 52


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