February 11, 2019

The claimants, Arcadia Group Ltd, Topshop/Topman Ltd and Sir Philip Green, sought an injunction to prevent publication by the defendant, Telegraph Media Group Ltd, in breach of confidence. The information in question was the subject of non-disclosure agreements (NDAs) agreed in settlement of complaints or claims by employees of Arcadia, under which substantial sums of money were paid to and accepted by the employees.

The Court of Appeal, reversing the decision at first instance, granted an injunction until after judgment in the action. The trial was scheduled to start on 4 February 2019. In the meantime, Lord Haine invoked Parliamentary privilege in the House of Lords and named the businessman at the heart of the matter as Sir Philip Green. On 28 January 2019, Arcadia applied for permission to discontinue and thereby abandon the injunction.

Arcadia gave two main reasons for its decision to discontinue:

1. a combination of the Daily Telegraph’s own articles and the reporting of what was said by Lord Haine had made the continued pursuit of the action pointless or worse. Sir Philip had become “little short of a public pariah”, with no ability to respond to what had been alleged against him, and success at trial (and the permanent injunction that would be granted in that event) would have left Sir Philip in a worse position than he would occupy “if the truth were known”. Such truth could not be made public because of the mutual contractual obligations under the NDAs; and
2. staff of Arcadia had been harassed by journalists acting for the Telegraph.

In short, Arcadia said that it had concluded that “there is insufficient confidentiality left in the information concerned in this case … to justify the risk, and the staff time and disruption, involved in pursuing it”.

The Telegraph contended that the court should only allow Arcadia to discontinue if it imposed an order stating that Arcadia could not, without the permission of the court, bring any further claim against any person, including the Telegraph, insofar as any such claim asserted that:

• the publication of any information contained in an email from the journalist, Daniel Foggo, dated 16 July 2018 amounts to a breach of any of the NDAs, either by the Telegraph or by any party to any such NDA;
• any publication derived from the Telegraph’s journalistic investigations and not derived from documents disclosed by Arcadia in these proceedings amounts to a breach of any of the NDAs; and/or
• Arcadia is entitled to any relief against the “Notetaker” (whose name was set out in a confidential schedule) arising out of the provision by her to and/or the publication by the Telegraph of any of the documents or information referred to or contained in her witness statement dated 20 January 2019.

Applying the principles on discontinuance set out in Stati v Republic of Kazakhstan [2018] EWCA Civ 1896, where Lord Justice David Richards approved what was said in Singh v The Charity Commission [2016] EWHC B33 (Ch), Warby J found that it would not be an appropriate exercise of his discretion to impose the conditions sought by the Telegraph, or any similar conditions.

It was wrong, he said, to proceed on the basis that the Telegraph had won the case, as there had been no trial. Given the lack of evidence from the Telegraph, Warby J could not draw the inference that Arcadia had abandoned the claim for fear of losing, as argued by the Telegraph. It could be inferred that the five individuals who were parties to the NDAs would not have signed witness statements. Further, it was not obvious that the Telegraph would have been successful overall, given the public interest factors relied on in favour of upholding agreements to settle litigation. The Court of Appeal’s view was that those interests would have been likely to prevail at trial and Warby J could not say with confidence that any of the evidential or other developments since then would have led to a different assessment.

It was true that Arcadia had taken its time to decide to discontinue, which might have consequences on costs, but Warby J was not persuaded by the Telegraph’s argument that Arcadia’s persistence with the action meant that he should reject their explanation for dropping it now. The argument that the unusual intervention from Lord Haine meant that a trial would not have achieved anything of real value, or of a value proportionate to the costs in terms of adverse publicity, time and expense, was logical and legitimate.

Warby J rejected the Telegraph’s argument that Arcadia’s application was abusive, or aimed at achieving an illegitimate tactical advantage. Further, he said, the Telegraph’s submission that Arcadia should have sued the Telegraph’s sources, if they were to sue them at all, was “a surprising one from a media defendant”. It was “unattractive”, when advanced by a defendant that had fought hard and successfully to protect the identity of its sources.

There was also no good reason for imposing a permission filter on any future action. The rules already required Arcadia to obtain the court’s permission if they wished to sue the Telegraph again over the same or substantially the same matters. As for non-parties, Warby J could see that in the light of what had happened, “some kinds of claim might arguably be an abuse of process”. However, the scope of the qualified immunity proposed by the Telegraph was “over-broad and unsatisfactory”. It remained to be seen whether any and if so what litigation would be brought, against whom, for what remedies. It could not be said that every possible claim would be improper.

Warby J also said there were some additional problems with the Telegraph’s overall approach. It had failed to take into account the rights and interests of the five ex-employees, in which regard four things were clear: (i) none of them wanted to have information about their case disclosed in conjunction with his or her name; (ii) four of them did not want the information published at all; (iii) two of them supported Arcadia’s claim; and (iv) none of them had signed a witness statement in support of the Telegraph’s case. The Telegraph’s approach seemed to give it a free pass to act contrary to the wishes, and arguably rights, of the five individuals.

Warby J also did not like the Telegraph’s attempt to obtain immunity, whether absolute or qualified, for a category of publication as broad and ill-defined as “any article derived from the defendant’s journalistic investigations”. This was not only wrong in principle, being broader than the issues in the case, but it also did not define with sufficient clarity either the subject-matter that was immune, or the persons benefiting from the immunity. There were also uncertainties as to what causes of action the Telegraph wanted barred.

In Warby J’s judgment the better course by far was to grant unconditional permission to discontinue. He did not consider his decision likely to result in unfairness or oppression. It was true that the third parties who, it seemed, had received letters from Arcadia’s solicitors might not have the same resources as Arcadia, but the letters were not framed in oppressive terms, nor was it fair to describe them as “intimidation”, and there was nothing in this aspect of the matter that would make any subsequent litigation an abuse.

Warby J therefore held that Arcadia should be allowed to discontinue, without the imposition of any additional requirements or conditions beyond those imposed by the CPR. (Arcadia Group Ltd v Telegraph Media Group Ltd [2019] EWHC 223 (QB) (8 February 2019) — to read the judgment in full, click here).