Douglas v Hello Ltd [2005] EWCA Civ 595 (18 May 2005)

Actors Michael Douglas and Catherine Zeta-Jones contracted with OK! magazine for exclusive wedding photos. Rival magazine Hello! published unauthorised photos. The court found Hello! liable to OK! for breach of commercial confidence, confirming that private information, once commodified, gains commercial protection.

Facts

The claimants, Michael Douglas and Catherine Zeta-Jones, were famous actors who sold exclusive photographic rights to their 2000 wedding to Northern & Shell plc, publishers of OK! magazine, for £1 million. The wedding was a private event with stringent security measures to prevent unauthorised photography. Despite this, a freelance photographer, Rupert Thorpe, infiltrated the wedding and took unauthorised photographs. These photographs were subsequently purchased and published by the defendant, Hello! Ltd, a rival magazine publisher. The Douglases and OK! magazine brought proceedings against Hello! for damages, alleging breach of confidence and invasion of privacy. At first instance, the High Court found in favour of the claimants. Hello! appealed the decision on liability and quantum, and the Douglases cross-appealed, arguing the damages awarded to them (£14,600) were too low.

Issues on Appeal

The Court of Appeal considered several key legal issues:

1. Whether Hello!, by publishing the unauthorised photographs, breached a duty of confidence owed to the Douglases and invaded their privacy.
2. Whether OK! magazine had a valid claim against Hello! for breach of commercial confidence, given that OK! was not the original subject of the private information.
3. Whether the damages awarded at first instance, particularly the substantial sum to OK! magazine, were appropriate.
4. The interplay between the developing tort of privacy, the equitable doctrine of breach of confidence, and the rights protected under Articles 8 (right to private and family life) and 10 (freedom of expression) of the European Convention on Human Rights (ECHR).

Judgment

The Court of Appeal, in a majority decision (Lord Phillips MR and Brooke LJ; Neuberger LJ dissenting), largely upheld the finding of liability but on a refined legal basis, and allowed the appeal against the quantum of damages.

The Douglases’ Claim for Privacy

The Court held that the Douglases did have a right to privacy in respect of their wedding, which was protected by the law of confidence, now expanded to protect privacy in line with Article 8 of the ECHR. However, as they had commodified this privacy by selling the rights to OK!, their claim was primarily commercial. The modest damages awarded to them for distress were not disturbed. Lord Phillips MR noted the dual nature of the information:

The information in question was both personal to the Douglases and of a commercial nature. The personal and commercial aspects were intertwined.

The Douglases’ cross-appeal for higher damages was dismissed on the basis that their primary loss was the commercial value of the photographs, which they had already assigned to OK!.

OK! Magazine’s Claim for Commercial Confidence

The majority found that the protection of confidence could be extended to cover a commercial interest. They held that the exclusive right purchased by OK! created a ‘zone of privacy’ which carried with it a right of commercial confidence. Hello! knew the photographs were taken surreptitiously and were therefore obtained in breach of confidence owed to the Douglases. By publishing them, Hello! became liable to OK! for the commercial harm caused. Lord Phillips MR concluded:

I have concluded that Hello! was, in the circumstances, under a duty of confidence to OK! not to publish the unauthorized photographs of the wedding. It follows that OK! is entitled to damages against Hello! for the loss caused by Hello!’s breach of confidence.

Lord Justice Neuberger’s Dissent

Neuberger LJ dissented on the issue of liability to OK! magazine. He argued that the majority’s decision effectively created a new property right in an event, which was not supported by existing legal principles of confidence. He stated that the law of confidence protects the confidentiality of information, not its commercial value in the abstract. He warned against this expansion:

In my judgment, the protection of ‘privacy’ cannot be invoked to create a new form of intellectual property, which is clothed with some of the characteristics of a trade secret or confidential information, but which is, in reality, a right of property in an event.

Implications

This landmark decision was significant for clarifying the relationship between privacy and commercial interests in English law. It confirmed that the equitable doctrine of breach of confidence can be used to protect commercially valuable information that is also personal and private. The case established that a third party (like OK!) who acquires rights to private information for commercial purposes can sue another party (like Hello!) who knowingly interferes with that right. It represents a key development in the ‘tort of misuse of private information’ and highlights the judiciary’s balancing act between Article 8 and Article 10 ECHR rights, especially in a commercial context.

Verdict: Hello!’s appeal was allowed in part. The finding that Hello! was liable to OK! Magazine (Northern & Shell) for breach of confidence was upheld, though on a refined legal basis. However, Hello!’s appeal against the award of damages to OK! was allowed, and the £1,033,256 award was set aside for reassessment. The Douglases’ cross-appeal was dismissed.

Source: Douglas & Ors v Hello Ltd [2005] EWCA Civ 595 (18 May 2005)