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26.11.18

Lexis Nexis interview: Breaking injunctions via parliamentary privilege

Employment analysis: Lord Hain’s use of parliamentary privilege to name Sir Philip Green as the businessman at the centre of sexual harassment and bullying allegations polarised opinion. Iain Wilson, managing partner at Brett Wilson LLP, considers the legal issues around parliamentary privilege.

What were the events that preceded Lord Hain using parliamentary privilege to name Sir Philip Green as the businessman who used non-disclosure agreements to settle a number of bullying and sexual harassment claims made against him?

The Daily Telegraph intended to run an expose on allegations of ‘discreditable conduct’ made by five former employees of Sir Philip. Sir Philip and his companies sought an interim injunction on the basis that the information was confidential, relying, in particular, on the fact that each grievance had been settled on a confidential basis without any admission of liability. Notably, two of the former employees supported the application.

The application was refused at first instance, Haddon-Cave J holding that the public interest in publication outweighed any confidentiality attaching to the information.

Sir Philip (still anonymised as ABC at this stage) appealed to the Court of Appeal. The Court of Appeal (Etherton MR and Underhill and Henderson LJJs) allowed the appeal and imposed an interim injunction (ABC & Ors v Telegraph Media Group Ltd [2018] EWCA Civ 2329, [2018] All ER (D) 14 (Nov)). While recognising the public interest in the allegations, the Court of Appeal noted the utility of non-disclosure agreements generally, that they had been freely entered into by the complainants with the benefit of legal advice and contained carve-outs for allegations of criminality.  As the court explained:

‘Provided that the agreement is freely entered into, without improper pressure or any other vitiating factor, and with the benefit (where appropriate) of independent legal advice, and (again, where appropriate) with due allowance for disclosure of any wrongdoing to the police or appropriate regulatory or statutory body, the public policy reasons in favour of upholding the obligation are likely to tell with particular force, and may well outweigh the Article 10 rights of the party who wishes to publish the confidential information.’

In acknowledgment of the public interest in the matter, a direction was given for a speedy trial, at which a determination could be made as to whether the injunction should be made permanent.

What is parliamentary privilege? How does it sit alongside the injunction made by the Court of Appeal in ABC v Telegraph Media Group?

Parliamentary Privilege—to quote Article IX of the Bill of Rights 1689—provides that ‘the freedom of speech and debates or proceedings in Parliament ought not to be impeached or questioned in any court of place out of parliament.’ What is unclear is the limits of protection—whether it merely protects parliamentarians from suit or prosecution in respect of matters arising in the normal course of a debate or whether it provides blanket immunity. If the latter interpretation is preferred, then parliamentarians are free to use privilege to undermine rulings made by the court by ‘outing’ those who have properly exercised their legal rights and obtained relief—this is what has happened in Sir Philip’s case.

At its highest, parliamentary privilege can be argued to be limitless and an expression of parliamentary sovereignty. Such a stance can create friction between Parliament and the unlimited jurisdiction of the High Court. The friction has occurred because Lord Hain has offended long-standing separation of powers principles, which trespasses on the role of the court. Generally speaking, Parliament legislates, and courts enforce the law. In short, if Lord Hain had strong views on the topic he could have proposed legislation. What in fact he did was mention Sir Philip’s name in a very short speech, sandwiched between two debates. His use of privilege was thus not connected or incidental to the business before the House. He disagreed with the decision of the Court of Appeal and effectively overturned the injunction. Notably—despite asserting he thought disclosure was in the public interest—it is questionable whether Lord Hain had read the judgment at that point—and considered the court’s careful reasoning on the issue—as he later claimed he was unaware that the law firm for which he is the global and government adviser acted for the Daily Telegraph (the firm’s name appears on the front page of the judgment).

The net effect of Lord Hain’s actions is that the Court of Appeal has been unnecessarily usurped. ‘Unnecessarily’ because a speedy trial had been ordered (at which Sir Philip’s claim could have failed) and Daily Telegraph could have appealed to the Supreme Court. Thus, in my opinion, Lord Hain’s purported use of parliamentary privilege undermined the rule of law in an entirely undemocratic way.

Is there any recourse for a person in respect of whom confidentiality provisions apply that is named in Parliament? Does it make any difference if there has been a misuse of parliamentary privilege?

Lord Hain is not the first parliamentarian to use parliamentary privilege to undermine a court order. Notably in 2011, John Hemming MP ‘outed’ Ryan Giggs and the beneficiary of an anonymised injunction in CTB v News Group Newspapers and another [2011] All ER (D) 183 (Dec).  In 2013, the Joint Committee on Parliamentary Privilege recommended that privilege should be strictly limited to those areas where immunity from normal legal oversight is necessary in order to safeguard the effective functioning of Parliament.

In terms of recourse, there is little effective recourse open to Sir Philip. As privacy lawyers say, ‘you can’t put the genie back in the bottle.’ Sir Philip may nevertheless feel sufficiently aggrieved with Lord Hain’s conduct that he will want to explore some sort of action. It is unclear what shape that might take.

A nuclear option would be to issue committal proceedings against Lord Hain for breaching the injunction, to test the limits of parliamentary privilege. However, if a court was to find in Sir Philip’s favour such a decision could provoke a constitutional crisis (the court would be accused of usurping parliamentary sovereignty).

A more moderate option would be to seek a Norwich Pharmacal Order against Lord Hain to establish the source of his knowledge and the information he holds (he stated that information was disclosed to him). This may or may not disclose facts that give rise to a claim for breach of confidence or the misuse of private information (against one or more parties—including potentially a claim for breach of contract if his source is bound by one of the NDAs)—outside the scope of parliamentary privilege—in which Sir Philip could seek damages (including legal costs incurred in ABC).

Finally, Sir Philip could complain through parliamentary channels and lobby for reform. Similarly, a complaint could potentially be made to the Solicitors Regulatory Authority in respect of Lord Hain’s role as a global and government adviser to the law firm which represented the Daily Telegraph, causing a perceived conflict and undermining the administration of justice (it should be stressed that Lord Hain’s position is that he was unaware that the firm acted for the Daily Telegraph).

Are there any special measures employers should take when settling claims involving sexual harassment or other discriminatory conduct, where they want to agree to keep the substance of the complaint and terms of the agreement confidential, in light of this case or generally?

It is difficult to see what more could have been done by the employers in ABC. The Court of Appeal recognised that the appropriate steps had been taken. The complainants had the benefit of independent legal advice and there was no suggestion that they had been coerced into signing non-disclosure agreements. There were carve-outs that allowed the complainants to make criminal or regulatory complaints. This is the normal procedure for settling employment law claims.

The Court of Appeal’s decision on why one should normally give effect to such non-disclosure agreements was perfectly sound. It referred to the recent Women and Equalities Select Committee Report (HC725) that addressed the benefit of such agreements:

‘109. Settlement agreements are described by the [Government Equalities Office] as providing “a way to resolve workplace disputes or end a working relationship without the need to go through the cost and stress (for both parties) of an Employment Tribunal hearing.” Employment lawyers agreed that NDAs were important to enable victims of sexual harassment to get a settlement from their employer, particularly if the case could not be resolved through the employer’s grievance procedure. Indeed, Gareth Brahams, the then chair of the Employment Lawyers Association, told us that in many cases no settlement would be agreed without a non-disclosure agreement. Again, we acknowledge that there is a place for NDAs in settlement agreements—there may be times when a victim makes the judgment that signing an NDA is genuinely in their own best interests, perhaps because it provides a route to resolution that they feel would entail less trauma than going to court, or because they value the guarantee of privacy.’

Employers can take comfort from ABC that if they have dealt with a grievance fairly and a complainant is willing to enter into a non-disclosure agreement with appropriate carve-outs then, as the law stands, the civil courts should normally uphold these agreements. There may be circumstances where the public interest will override matters (for example, where a politician is seeking to suppress information that might be highly relevant to their public role).

However, on a practical level, employers need to consider the utility of a non-disclosure agreement if there is a risk that it might be breached at some point in the future. The media’s reporting on non-disclosure agreements is somewhat distorted, no doubt because of its natural hostility to the suppression of any information. Following the #MeToo movement, many individuals have spoken freely prima facie in breach of agreements. Lord Hain’s disclosure sends out a message that these types of agreements are bad and arguably further encourages people to speak out.

Given that a claim for damages is unlikely to be an adequate remedy, if this trend is to continue then employers may be disinclined to enter into such agreements. Ultimately, complainants could suffer here. Non-disclosure agreements are a useful mechanism for resolving sensitive and often upsetting disputes. Claimant lawyers can testify that many of their clients are happy to accept a greater sum of compensation to forgo their right to share their grievance with the world. Indeed, many want to keep their disputes private in any event (as with two of the complainants in ABC).

What changes, if any, do you think the government might make in respect of nondisclosure agreements as a result of the issues raised in this case?

Contrary to some news reports, the law as it stands is in pretty good shape. A non-disclosure agreement that is forced on a complainant is not going to be enforceable. A non-disclosure agreement certainly does not stop a party from reporting a crime to the police (and any claim for damages based on such an agreement would be laughed out of court). The government could consider introducing legislation that prohibits any attempt to compel someone to sign and enter into a non-disclosure agreement or make it mandatory to pay for a complainant to seek independent legal advice. However, such legislation might be considered heavy-handed and unnecessary, and the former difficult to interpret. Ultimately, absent of duress or misrepresentation, generally parties should be free to contract on whatever terms they see fit.

Much of the hostility towards non-disclosure agreements is based on the idea that wrongdoers should be ‘named and shamed.’ In most instances, such a sentiment is well intentioned—not least to deter future misconduct and properly hold wrongdoers to account. However, a blanket approach (ie a complete ban on non-disclosure agreements) misunderstands the nature of private law and fails to recognise that privacy is often valued on both sides.

Perhaps a better focus for the government would be on publishing clear guidance on non-disclosure agreements— explaining that proposed terms can be rejected or negotiated, and that complainants should consider carefully whether they want to permanently forego their right to share their grievance and warning of the consequences of breaching an agreement.

 

Iain Wilson was interviewed by Max Aitchison.

 

This article was first published on Lexis® PSL on 20 November 2018 and is reproduced with permission and thanks. 

 


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