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Bloomberg vs ZXC: Implications for individuals under investigation

Posted on 17 February 2022

On 16 February 2022, the Supreme Court dismissed the appeal in the long running case of Bloomberg v ZXC [2022] UKSC 5. The issue in the case was whether individuals under investigation who have not been charged with an offence can have a reasonable expectation of privacy. The Supreme Court found in favour of the claimant ZXC, confirming that, in general, individuals under investigation do have a reasonable expectation of privacy.

Timothy Folaranmi, Harry Eccles-Williams and Jessica Dunk examine the implications for individuals under investigation.

What are the issues in the case?

Background

A UK Company, referred to in the proceedings as X Ltd, was being investigated by a UK Law Enforcement Body ("UKLEB"). Bloomberg reported the facts of the investigation, including the company name, in two articles naming X Ltd.

The second of those articles was based on a "confidential law enforcement document", namely a letter of request for mutual legal assistance made by the UKLEB to the Competent Authority of a foreign jurisdiction. The letter specified that X Ltd was the subject of an investigation and also identified the claimant, ZXC, as having been interviewed. ZXC held a senior position at X Ltd, but was not a director. The letter also stated that the investigation concerned a number of possible offences including bribery, offences under the Proceeds of Crime Act 2022, and corruption.

The UKLEB objected to the publication of the letter or its contents, noting its highly confidential nature and the potential for any publication to prejudice an ongoing criminal investigation.

Issues

Nine days after the publication of the second article, the Claimant asked Bloomberg to take it down. Bloomberg declined to do so, and the Claimant issued an application for an interim injunction on the basis that the publication of the article amounted to a misuse of his private information. The application was dismissed on the basis that Bloomberg's right to freedom of expression outweighed ZXC's right to a private life in these circumstances. ZXC thereafter pursued a claim for damages and a final injunction in November 2018.

What did the court decide?

Judgment was handed down in April 2019 allowing the claim. Nicklin J found that the publication of the article, and particularly the parts of it which confirmed that the UKLEB had requested certain financial and business records from its counterparts in a foreign jurisdiction, was a misuse of ZXC's private information.

Firstly, Nicklin J concluded that "in general, a person does have a reasonable expectation of privacy in a police investigation up to the point of charge." ([119] – emphasis original).

Secondly, he found that in the circumstances of this case, ZXC's privacy rights outweighed Bloomberg's right to freedom of expression. Although there was plainly a strong public interest in reporting on the alleged corruption that was the subject of the underlying investigation, the same could not be said for the content of the letter, which was highly confidential, and did not give any indication of the outcome of Bloomberg's investigation into the alleged conduct.

The decision was upheld in the Court of Appeal, with Simon LJ stating:

"…those who have simply come under suspicion by an organ of the state have, in general, a reasonable and objectively founded expectation of privacy in relation to that fact and an expressed basis for that suspicion. The suspicion may ultimately be shown to be well-founded or ill-founded, but until that point the law should recognise the human characteristic to assume the worst (that there is no smoke without fire); and to overlook the fundamental legal principle that those who are accused of an offence are deemed to be innocent until they are proven guilty” [82].

Any individual who finds they are the subject of an investigation will welcome this finding, particularly where any suspicions are ultimately unfounded.

What issues did the UK Supreme Court consider?

The case was referred to the Supreme Court, with a hearing in late 2021. The Supreme Court was asked to consider whether, and to what extent, a person who has not been charged with an offence can have a reasonable expectation of privacy in relation to information that relates to a criminal investigation into his activities.

What was the outcome?

The Supreme Court unanimously dismissed Bloomberg's appeal, agreeing that, as a starting point, a person under criminal investigation has a reasonable expectation of privacy in respect of information relating to that investigation before they are charged with any offences.

The Supreme Court found that it was 'undeniable' that a person's reputation will usually be adversely affected as a result of publication of such information, and that this would impact on their right to respect for a private life, for example, the right to establish and develop relationships with other people.

Notably, the Supreme Court rejected Bloomberg's argument that the information at issue should not be protected because it related to ZXC's business, rather than personal, activities. The Court found this to be an unduly restrictive view of the right to a private life, which can include personal or business activities.

What are the implications for those under investigation?

This decision provides confirmation that, as a starting point, individuals under investigation have a reasonable expectation of privacy. It is not uncommon for investigations, which can span months or years, to conclude with no charges brought. However, where the investigation has been publicised, significant reputational and professional damage will have already been done.

However, the Court was clear that individuals under criminal investigation cannot have an unqualified expectation of privacy. In a similar scenario, a court will still be required to conduct a balancing exercise in which it will weigh an individual's right to a private life against a publisher's right to freedom of expression. Such decisions will inevitably turn on the particular facts of a case, however, ZXC will add considerable weight to claimants' arguments that they have a reasonable expectation of privacy where they are subject to criminal investigation.

What means are available to protect the reputations of those subject to investigation?

Where a publisher intends to report the identity of an individual under investigation, in order to stop them, that individual will need to seek an urgent misuse of private information injunction.

Following this judgment, their chances of obtaining such an injunction are significantly enhanced, but they will still need to demonstrate that, based on the facts of the particular situation, their right to a private life outweighs the publisher's right to freedom of expression. If the individual in question only discovers that such information has been published after the event, they can still seek an injunction to prevent further dissemination and to remove the information from the internet (albeit acting pre-publication is always more effective).

If information is published, for whatever reason, an effective tool to combat any adverse effects is the preparation of a dossier or targeted representations setting out the individual's response to the allegations. However, this step must be considered carefully so as not to prejudice the individual's position with regards to the ongoing investigation, particularly where information about the allegations may be limited.

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