The confidentiality of overheard conversations
Clearcourse v Jethwa (High Court) [2022]
Parties negotiating a contract often decide at critical points to split up into different break out rooms so that they can consider their positions in private. But what if the walls are not sound proof (as is often the case) and you overhear those private conversations?
Facts:
The claimants were engaged in negotiations to purchase the defendant's company. During a break in negotiations, the defendant went into a next-door room. Whilst he was out of the room the claimants had what was described as an ‘unguarded and candid’ conversation which included comments on how the negotiations were progressing; the strategy for the meeting and the negotiations; plans for the future of the target company; and their impressions of the defendant and his suitability to remain as the CEO of the company.
During a subsequent dispute between the defendant and the claimants' company, the defendant sent the claimants text messages threatening to disclose the information overheard to third parties. These text messages included a screenshot that had been taken using the company’s CCTV system of the individuals in the room alone, engaged in their discussion. The claimants obtained an Interim Non-Disclosure Order (INDO).
Decision:
The High Court continued the Order to restrain disclosure of what was a private conversation between the claimants. The High Court held that the claimants were likely to succeed at trial in relation to claims of breach of confidence, breach of the General Data Protection Regulation and UK GDPR, and misuse of private information.
The court summarised the position in relation to confidentiality. The claimants needed to establish that the contents of the oral discussions in question had the necessary quality of confidence, that the defendant came to know what was being said in circumstances importing an obligation of confidence, and that there has been unauthorised use or a threat to make unauthorised use of that information.
Regarding breach of confidence, the court said that the subject-matter was such as to attract confidentiality. A duty of confidence did not arise only when a person actively sought out private and confidential information. A duty of confidence could arise when a person had notice that the information they received was of a confidential nature. In the context of the commercial negotiations taking place, it would be obvious to a reasonable person in the defendant’s shoes that a conversation held behind closed doors between individuals on the opposite side to him in a business negotiation was both private and confidential insofar as it extended to aspects of the proposed transaction, their commercial intentions and future plans for the target company.
Regarding misuse of private information (a distinct head of claim), a person in the claimants' shoes would expect their conversation, behind closed doors, as giving rise to a reasonable expectation of privacy. There was no realistic justification for disclosure. There is an important public interest in protecting the confidentiality of private and commercially sensitive conversations and, in this case, no countervailing public interest such as freedom of expression.
In relation to the UK GDPR, the court held that the screenshot contained the claimants' personal data, had been taken and retained without their consent. The general CCTV warning in the defendant's offices did not assist in establishing the claimants' consent to the defendant's distinct private and personal copying and storage of their images.
Points to Note:
- It is worth bearing in mind that, as the judge said, the defendant’s conduct in making apparent threats to release information represented conduct that was ‘unattractive’. This, no doubt, had some impact on the decision but it doesn’t really change the law as applied by the judge.
- That notwithstanding, this case illustrates that confidentiality obligations can arise in respect of information that is simply overheard but it has to be much better to make sure you are not overheard in the first place.