Court of Appeal upholds damages in phone hacking claims

In Representative Claimants -v- Mirror Group Newspapers Ltd [2015] EWCA Civ 1291 the Court of Appeal considered MGN's appeal over privacy damages awarded against it for phone hacking.

First Instance Decision

Mann J’s decision in Gulatti & Ors v MGN Limited [2015] EWHC 1482 in May 2015 marked a turning point in the development of privacy law in England and Wales. It not only recognised the inadequacy of the level of damages hitherto awarded in privacy cases, but also set out a basic framework for determining damages in an area of law in which guidance was badly needed.  The judgment served as a cautionary example of the seriousness with which the court views the intrusion of an individual’s privacy.  Mann J’s awards of damages - as high as £260,250 for Sadie Frost (one of several test claimants) - were the most substantial seen in a privacy case to date.

For a summary of facts, see our post on the first instance decision here.

The Appeal

In August 2015, following an initial refusal by Mann J, MGN was given permission to appeal the decision by Kitchin LJ.

MGN appealed on four Grounds:-

• Privacy damages should be limited to claims of tangible loss or distress; they did not cover the violation of privacy in itself
• Mann J failed to have sufficient regard to personal injury awards guidelines when he adopted an aggregated approach to damages
• The awards were disproportionate compared with the modest awards made by the European Court of Human Rights (ECtHR) in cases involving breaches of privacy
• Some elements of the awards were counted twice

On the 17 December 2015, Arden, Rafferty and Kitchin LLJ rejected the appeal on all grounds.

Rejecting the first ground of appeal, Arden LJ agreed with Mann J that the award of damages should cover the breach itself, regardless of the extent of the loss suffered; "...by misusing their private information, MGN deprived the respondents of their right to control the use of private information". As such, damages may be awarded both for the distress suffered and for the infringement of the claimants’ privacy rights.

The argument that the damages were disproportionate compared to the conventional compensatory scales of damages awarded in personal injury actions was rejected by Arden LJ on the basis that it was within Mann J's discretion to look at breaches individually.  Damages should be based on the unique characteristics of the case in question.

As a third ground of appeal, the appellant claimed that the awards were disproportionate when compared to those made by the ECtHR in cases involving breach of privacy.  It argued that as the tort of misuse of private information was born out of the need to give effect to Article 8 of the Human Rights Act 1998, the court must have regard to Strasbourg jurisprudence.  Arden LJ disagreed.  The tort of misuse of private information was a matter of English domestic law and the court, when making an award for misuse of private information, "[was] not proceeding under the either Section 8 of the Human Rights Act 1998 or Article 41 of the [European Convention on Human Rights ('ECHR')]".

Finally, rejecting the fourth ground of appeal, the Court pointed out many instances where Mann J had deducted damages to account for any overlap and to specifically avoid double counting, resulting in an award that was reasonable and fair in the circumstances.

Comment

The Court of Appeal’s unequivocal rejection of MGN’s appeal consolidates the significance of the tort of misuse of private information and demonstrates a commitment by the courts to ensure that privacy achieves real protection under English law.

Arden LJ acknowledged in her judgement that "the assessment of general damages is not an exact science".  Indeed, quantifying appropriate damages requires a careful balancing act that takes into account the merits of each individual case.

Whilst it is yet to be seen whether the awards of the scale in Gulatti will be an outlier, confined to their extraordinary facts, or will set a new benchmark for privacy claims, the Court of Appeal’s endorsement of the decision certainly reasserts the belief among many commentators that substantial damages are likely to be commonplace in privacy cases.  The decision is consistent with the upward trajectory of awards for misuses of private information since the cause of action was recognised in Campbell v MGN [2004] UKHL 2 AC 457.

Arguably, the most interesting aspect of the Court of Appeal’s decision is the approval of Mann J’s approach that misuse of private information per se is entitled to more than just nominal damages.

Finally, it seems like that the approach to the distress element of privacy damages will be utilised in claims under the Data Protection Act 1998 ('DPA').  This is particularly relevant following the decision in Google Inc v Vidal-Hall [2015] EWCA Civ 311, where the Court of Appeal ruled that damage for distress alone were recoverable following a breach of the DPA.

Click here to read how Brett Wilson LLP privacy solicitors can assist you if your privacy has been breached.