MGN loses appeal against Mann J’s judgment in the Mirror Group Phone Hacking Litigation
Posted on 22 December 2015 by Carter-Ruck
On 17 December 2015, Lady Justice Arden, Lady Justice Rafferty and Lord Justice Kitchin handed down judgment in Gulati & Ors v MGN Limited  EWCA Civ 1291, upholding Mr Justice Mann’s judgment and endorsing his careful analysis of the appropriate level of compensation for obtaining private information through phone hacking and publishing it.
The appeal was against the quantum of damages awarded by Mann J in a judgment dated 21 May 2015 (we published a comment on that judgment here). Mann J had awarded a total of almost £1.25 million to 8 claimants including Sadie Frost and Paul Gascoigne. These claimants were either in the public eye or associated to persons in the public eye and had been the long term targets of phone hacking and other unlawful activity. The total awarded to each claimant by way of compensation varied from £72,500 to £260,250; these awards were therefore considerably higher than the previous highest damages award in a privacy case (£60,000 in Mosley v News Group Newspapers Ltd (No 3)).
MGN (as proprietor of the Daily Mirror, The Sunday People and The Sunday Mirror) appealed, and permission was granted by Lord Justice Kitchin on 7 August 2015. The appeal was on four main grounds:
- that privacy damages should only compensate for the distress caused;
- that awards of damages in privacy cases should be proportionate to those in personal injury cases;
- that awards of damages in privacy cases should be proportionate to those in the European Court of Human Rights (ECHR);
- that the damages awarded were too high because they involved double counting.
Object of compensation in misuse of private information cases?
MGN argued that the judge had erred in law by rejecting the idea that in privacy cases damages are awarded for the distress or injury to feelings caused to the claimant. Mann J took the view that compensation in misuse of private information cases is not confined to damages for distress but also applies to the infringement of the right itself. In support of their case, the appellants relied on Vidal-Hall v Google, which proceeded on the basis that compensation would only be awarded for distress, anxiety and pecuniary loss but not for the breach as such.
The respondents distinguished Vidal-Hall on the basis that in that case only damages for distress had been claimed. Instead, they relied on other cases including AAA v Associated Newspapers Ltd and Weller v Associated Newspapers Ltd in which compensatory damages were awarded in the absence of any evidence of distress (as the claimants were children).
The Court of Appeal agreed that the award of damages was not confined to distress and noted that by misusing their private information, MGN had deprived the respondents of their right to control the use of private information. Compensation in misuse of private information cases can therefore be awarded both for the distress suffered and for the infringement of the claimant’s privacy rights.
Proportionality with personal injury awards
At first instance, MGN had argued that there must be a single award of damages even if distress was caused on separate occasions, but Mann J rejected this, adopting an ‘atomised’ (or ‘single wrong by single wrong’) basis for compensation instead of a global approach considering the totality of the unlawful conduct. On appeal, MGN argued that the atomised basis resulted in a cumulative total sum of the awards that was out of proportion to the harm suffered when compared to the accepted personal injury tariffs, which would be much lower. MGN referred to the guidelines given to libel juries which indicated that personal injury tariffs are a good reference as to the scale of available libel damage.
The Court of Appeal approved the use of personal injury tariffs as a loose cross check; however, the appellate judges considered that Mann J had duly referred to those tariffs, and suggested that the real question was whether the judge had achieved the reasonable relationship between that scale and his awards. The answer to this question turned on the validity of Mann J’s ‘atomised’ approach, which the Court of Appeal considered to be a matter of judicial discretion. Because the individual awards were held to be ‘thorough and fairly done in every case’, the second ground of appeal failed.
Proportionality with ECHR awards
As a third ground of appeal, the appellants suggested that the awards were out of proportion to the harm suffered when compared to the more modest awards made by the ECHR in cases involving breaches of privacy. They argued that the quantum of ECHR awards must be taken into account because the development of the tort of misuse of private information was inextricably bound with the principles of articles 8 and 10 of the Convention.
The respondents argued that there is a fundamental difference between compensation under the Convention (which proceeds on the basis of just satisfaction and is discretionary) and under domestic tort principles. They noted that the English courts ‘are in the process of developing the tort of misuse of private information and that the damages have been put on a separate path from that of the Strasbourg Court’.
The appellate judges endorsed the respondents’ position, noting that the court, when making an award for misuse of private information ‘is not proceeding under either section 8 of the Human Rights Act 1998 or Article 41 of the Convention’. The question of the measure of damages is a question for English domestic law. There was therefore no need to ensure that the damages were proportionate to those awarded by the Strasbourg judges.
As a final ground of appeal, MGN argued that there had been double counting in the awards of damages: (i) in awarding damages for the fact of hacking, when damages had already been awarded for the published articles; (ii) in awarding additional damages for the upset and effect on relationships; (iii) in awarding damages for each published article in isolation, when the hurt suffered from a series of articles is necessarily less than that suffered from the publication of each individual article.
The respondents argued that Mann J had been very mindful of double counting and that no specific example of any double counting error had been provided by the appellants. The Court of Appeal adopted this view, citing numerous examples where Mann J in fact reduced the quantum of damages in order to account for the overlapping causes of action. The appellate judges also noted that Mann J was undoubtedly entitled to make an award for general hacking or for general distress if he considered that that was likely to have occurred and was not covered by any other award. Thus, the fourth ground of appeal also failed.
This decision, for which MGN was refused permission to appeal to the Supreme Court, confirms that privacy has now achieved real protection in the law. In the concluding part of her judgment, Arden LJ (with whom Rafferty and Kitchin LJJ agreed) sends an important warning to the newspapers (at para 108):
'MGN cannot expect this Court to come to its rescue and find some way of finding the awards to be excessive when its staff have been responsible for disgraceful conduct with such distressing consequences, and when to boot it is quite unable itself to point to actual awards that it contends are wrong.'
Beyond consolidating the importance of the tort of misuse of private information in English law, the judgment also provides useful guidance which should reduce some uncertainty as to the appropriate level of awards in privacy cases and thus save legal costs.
It remains to be seen whether MGN will now seek permission to appeal from the Supreme Court.
By Persephone Bridgman Baker and Mathilde Groppo.