The House of Lords has restored OK! Magazine’s £1m+ damages award, with a majority ruling that Hello! Magazine’s publication of unauthorised pictures of the wedding of Michael Douglas and Catherine Zeta-Jones breached a duty of confidence owed to OK!, as well as to the celebrities
Back in 2000 when the publicity machine started to crank up for their forthcoming matrimonials, the Douglases could little have dreamt that their wedding would still be making (at least legal) headlines almost 7 years later. On 2 May 2007 the House of Lords delivered a judgment marking the end of this long-running battle between magazine rivals OK! and Hello!. Click here for a copy of the judgment. A copy of our earlier newsflash can be found here. The Law Lords also pronounced on the scope of a number of so-called "economic torts"; this briefing covers the confidentiality aspects of the decision only.
The background of the case is well known. In advance of their 18 November 2000 wedding in New York, Michael Douglas and his bride sold to OK! Magazine the exclusive coverage of the event for £1m. The Douglases were to arrange for official photographs to be taken and would then approve a number for release to OK! for exclusive publication. The contract prevented the Douglases from authorising publication by any third party of any photographs of the wedding and obliged the couple to implement stringent security measures to prevent anyone present – guest or staff – from taking pictures.
Somehow a paparazzo inveigled his way into the reception and covertly took a number of pictures, which were promptly bought and published by Hello! Magazine in a "spoiler" edition.
An emergency injunction was obtained by the celebrity couple and OK! in November 2003 halting Hello!’s publication of the unauthorised pictures but was discharged a few days later. OK! and the Douglases sued Hello! and others for breach of confidence, breach of the Data Protection Act 1998 and under various economic torts.
The three claimants won on breach of confidence in the High Court. Damages of £1,033,156 plus costs were awarded to OK! and smaller sums to the celebrities (who had, after all, received their fee from OK!). But Hello! appealed and succeeded in persuading the Court of Appeal that it was not liable to OK! for breach of confidence. As Lord Hoffmann summarised it in his lead judgment in the House of Lords: “[t]he Court of Appeal … reversed the judge's decision on the ground that the obligation of confidence for the benefit of OK! attached only to the photographs which the Douglases authorized them to publish. [OK!] did not have the benefit of an obligation of confidence in respect of any other photographs. Their publication may have invaded a residual right of privacy retained by the Douglases but did not infringe any right of OK!”. Lord Hoffmann later criticised this interpretation as seeming to make no commercial sense.
It is OK!'s appeal against the Court of Appeal's judgment that the House of Lords has just ruled upon, with OK! winning by a slim majority of 3:2. Some fairly marked differences of opinion emerge from the judgments, at times expressed in forthright terms. The main findings are set out below.
How far did OK!'s right to confidentiality extend?
Their Lordships were all prepared to accept (as both the lower courts had done) that OK! had the benefit of certain confidentiality rights in photographic coverage of the Douglases' wedding. Where the differences lay were as to the scope of that confidentiality. The minority (Lord Nicholls and Lord Walker) were persuaded by the Court of Appeal's analysis that it attached only to the photographs that OK! was authorised to publish. The majority (Lord Hoffmann, Baroness Hale and Lord Brown) disagreed, finding that the duty of confidence owed to OK! extended to all photographs of the occasion, whether authorised or not.
Publication of the authorised pictures did not extinguish OK!'s confidentiality rights in unpublished ones
The majority rejected the view of Lord Nicholls that the differences between the authorised and the unauthorised photographs were “insufficiently significant to call for legal protection” such that OK! had acquired, at best, only a short-term commercial confidence which was extinguished as soon as it published the authorised photographs.
“In this case, however, the point of the transaction was that each picture would be treated as a separate piece of information which OK! would have the exclusive right to publish. The pictures published by OK! were put into the public domain and it would have had to rely on the law of copyright, not the law of confidence, to prevent their reproduction. But no other pictures were in the public domain and they did not enter the public domain merely because they resembled other pictures which had [emphasis added] … My Lords, this seems to me a point on which theory is in danger of losing touch with reality.” (Per Lord Hoffmann).
Commercial commonsense or keep your eye on the money
The approach of the majority of the House of Lords was more pragmatic than that of the minority. As Lord Hoffmann expressed it “[t]he point of which one should never lose sight is 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 [emphasis added]. That was quite clear. Unless there is some conceptual or policy reason why they should not have the benefit of that obligation, I cannot see why they were not entitled to enforce it. And in my opinion there are no such reasons. Provided that one keeps one's eye firmly on the money and why it was paid, the case is, as Lindsay J held, quite straightforward.”
This judgment represents a victory for commerciality over the niceties of legal theory. It is to be welcomed for this reason. The majority of the House of Lords kept the intention behind the Douglases' exclusive deal with OK! at the fore. The purpose of that arrangement was not merely that OK! would be the approved, official publisher of pictures of the happy occasion but, equally importantly, that OK! would be the only source of pictures of the event.
Hello!'s damages bill of over £1m, plus legal costs likely to far exceed that, combined with the loss they made on their wedding edition are all likely to serve as a deterrent to any would-be exclusivity saboteur. The "spoiler" is dead – long live the celebrity exclusive!