Court of Appeal to consider compensating "distressed" victims of privacy breaches in 2015 - DAC Beachcroft

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Court of Appeal to consider compensating "distressed" victims of privacy breaches in 2015

Published On: 19 December 2014

Vidal-Hall & Others v Google - Court of Appeal

In 2014, Google appealed the High Court ruling that prompted a new tort of the misuse of private information and the right to pursue compensation for distress caused by breaches of the Data Protection Act 1998 ("DPA"). The appeal raised such important questions of law that the Information Commissioner's Office was compelled to intervene. The hearing of the appeal was postponed to 2015, but not before the parties had made their first day's submissions. This case is hotly tipped as "one to watch" in 2015.

The High Court Decision

The Claimants are three British residents seeking compensation for the distress and anxiety they claim to have suffered as result of Google allegedly tracking and collating information relating to their internet usage on certain internet browsers. The Claimants allege that Google used confidential information to generate personalised advertisements on their computer screens, which may have been viewed by third parties.   

As Google is a corporation based in Delaware, USA with a principal office in California, the Claimants obtained permission to serve proceedings out of the English jurisdiction pursuant to Civil Procedure Rule 6, and duly served Google in California. Google applied to the High Court in England seeking a declaration that the English court did not have jurisdiction to try the claims.

In January 2014, the High Court rejected Google's application. It held that the English court had jurisdiction because (i) the claims were made in tort and damage had been sustained in the English jurisdiction, (ii) there were serious issues to be tried on the merits of the claims, and (iii) England was the most appropriate forum for the trial.

Court of Appeal

Google appealed the High Court decision on two grounds. The first ground is whether misuse of private information is a tort, rather than a cause of action based on the equitable doctrine of breach of confidence. The second is whether, in the circumstances of the case, the Claimants are entitled to compensation for distress under s13(2) DPA without having to first establish financial loss.

The appeal began on Monday 8 December 2014. In the short, one day hearing available, the Court of Appeal agreed to consider the first ground only. The second ground (the DPA issue) will be considered next term, and the Information Commissioner's Office ("ICO"), which has decided to intervene recently, will be invited to make oral submissions to the Court. The ICO's submissions relate to whether the data involved in this matter (targeted marketing) is personal data or not.

The First Ground - Is misuse of private information a tort?

The Civil Procedure Rules set out the grounds when a claimant may serve out of the jurisdiction. CPR PD 6B paragraph 3.1(9) permits claims in tort where the damage is sustained within the jurisdiction; there is no similar provision for claims in equity. Accordingly, the issue of whether misuse of private information is a "tort" is fundamental to the Claimant's case.  

Google's submissions

Google argued that misuse of private information is not a tortious cause of action, but is simply an extension of the equitable doctrine of breach of confidence. Accordingly, there is no appropriate gateway within CPR 6 to allow the English claimants to serve Google out of the jurisdiction.

Google also argued that the "absorption" of misuse of private information into the breach of confidence doctrine has allowed the courts to adequately protect the privacy rights enshrined in the Human Rights Act 1998, and it is not necessary to create a new tort of misuse of private information.

The Claimants' submissions

The Claimants argued that misuse of confidential information has all the characteristics of a tort; it no longer requires a pre-existing relationship of trust, and damages are an available remedy. Further, there are a number of cases where misuse of confidential information has been referred to as a "tort" and there is no policy reason to prevent it being recognised as a tort.

The Court of Appeal

The Court of Appeal acknowledged that this is not an easy issue to resolve. It is the first case where the classification of the misuse of private information as a tort (or otherwise) directly impacts on whether a claimant can pursue a claim before the English court.

The Court of Appeal observed that the Australian Law Commission Reform is recommending the creation of a tort of misuse of private information. It also shared the Claimants' concern that if misuse of confidential information is an equitable claim and not a tort, then there was an apparent "lacuna" in the CPR because there is no gateway under the present CPR to allow UK citizens to bring claims against foreign corporations where confidential information has been misused.

What Next?

The Court of Appeal adjourned the hearing so that arguments from the parties and ICO on the DPA issue can be heard next year. The Court will then make its decision on both the tort and DPA issues. 

DAC Beachcroft is monitoring this case with great interest, and we will report again when the decision is handed down in the New Year.

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