Breach of duty of confidentiality

Douglas and another v Hello! Ltd and others HL TLR 3 May

In yet another split decision, the House of Lords held by a majority of 3:2 that photographic images of the wedding of two celebrities has a commercial value over which the celebrities had sufficient control to enable them to impose an obligation of confidence. A magazine publisher, which had bought the exclusive right to publish photographs, had the benefit of the duty of confidentiality imposed by the celebrities on those attending their wedding, and had the right to enforce that duty against the publisher of a rival magazine, OK!, which published unauthorised photographs of the wedding. Accordingly, the House of Lords restored the award of the trial judge of £1,026,706 against Hello! Ltd for loss of profit from the exploitation of unauthorised photographs of the wedding in New York on 18 November 2000 of Mr Michael Douglas and Ms Catherine Zeta-Jones, that judgment having been overturned by the Court of Appeal. There are three well-known criteria for liability for breach of confidence: (i) the information itself must have the necessary quality of confidence about it; (ii) the information must have been imparted in circumstances importing an obligation of confidence; and (iii) there must be an unauthorised use of that information to the detriment of the party communicating it. The information in the present case was the photographic images of the wedding, not the information about the wedding generally: anyone was free to communicate the information that the Douglases had been married. As to the first criterion, photographs of the wedding were confidential information in the sense that none was publicly available. As to the second, the Douglases had made it clear that anyone admitted to the wedding was not to make or communicate photographic images. Further, everyone knew that the obligation of confidence was imposed for the benefit of OK! as well the Douglases. The obligation of confidence was therefore binding upon Hello!. The third criterion that the information was used to the detriment of OK! was plainly satisfied. The point of which one should never lose sight was that OK! had paid £1m for the benefit of the obligation of confidence imposed upon all those present at the wedding in respect of any photographs of the wedding. There was no conceptual problem about the fact that the obligation of confidence was imposed only in respect of a particular form of information, namely photographic images. If OK! was willing to pay for the right to be the only source of that particular form of information and did not mind that others were free to communicate other forms of information about the wedding, then the Douglases should be able to impose a suitably limited obligation of confidence. There was no reason why there should not be an obligation of confidence for the purpose of enabling someone to be the only source of publication if that was something worth paying for. Why should a newspaper not be entitled to impose confidentiality on its journalists, sub-editors and others to whom it communicated information about a scoop, which it intended to publish the next day?