This area of law is concerned with secrets and an obligation of confidence; they may be commercial, industrial or concern everyday contracts and business negotiations. We often come into contact with people everyday in life whom owe you or owe others a duty of confidence, for example, in employer and employee relationships, doctors and patients, and solicitors with their clients.
Although the law on the breach of confidence is primarily based around case law,
s.171 of Copyright, Designs and Patents Act 1988 does recognise this area of law - "Nothing in this part affects... the operation of any rule of equity relating to breaches of trust or confidence".
It is important to note the distinction between areas of law which people often get confused about. The law of confidence concerns the protection of ideas; this can be distinguished from copyright laws, as they protect the
expression of the idea. Breach of confidence may also protect a limited right to privacy, however, in respect of photographs and films, if they had been given to another to whom a duty of confidence was attached.
This area of law developed in the middle of the 19th century and then lay dormant until the late 1940's when people realised that this was a useful area. In Morison v Moat (1851) there was a dispute between the son of the inventor of a form of medicine ("Morison's Vegetable Universal Medicine") and the partner's son who had been improperly told the recipe by the original partner. It was held that there was a breach of faith and confidence by the original business partner who had told his son. It was clear, here, that the breach was actionable per se, despite that there was no contractual relationship.
The Modern Law of Breach of Confidence
Three requisite elements for the doctrine of confidence (Megarry J in Coco v AN Clark [1969]):
1. Information must have the necessary quality of confidence - it must not be public property and public knowledge (Lord Greene MR in Saltman Engineering Co Ltd v Campbell Engineering Co Ltd [1963]);
Information must have been imparted in circumstances importing an obligation of confidence;
There must be an unauthorised use of the information to detriment of the party communicating it.
The basic requirement for a confidence is the existence of a duty which may be expressed from the circumstances. The obligation must be expressed within a contract, or imposed/implied outside of a contract.
The Law Commission proposed that this area of law should be codified and in 1981 a draft Bill was produced. The advantage with the law of breach of confidence is that it has a flexible nature and is freed from the straight-jacket of statutory interpretation. No moves have been made since in order to codify the law.
1. Nature of Confidential Quality
The owner of the information must believe that the information would be injurious to him or of advantage to his rivals. He must also believe that the information is confidential or a secret and these two elements need to be reasonable. Also, the information must be considered and taken into account of the trade practice - would it be common place for that information to be of a secretive nature?
The important point here is that the owner of the information has not put it within the public domain. Although disclosure of this information removes the obligation of confidence, a person under an obligation may still be held to it for a period of time - the 'springboard doctrine'. A person who has obtained information in confidence is not allowed to use it as a springboard for activities that would be detrimental to the person who made the communication to them.
What is confidential?
An objective test should be applied when assessing whether information is confidential or not. It is not enough to simply write "PRIVATE AND CONFIDENTIAL" on it, especially if the contents are commonplace and public. On the other hand, failing to mark a document a 'confidential' does not, per se, deprive it of any confidential matter. It seems that a balance needs to be struck here.
2. Obligation of Confidence
Information can be imparted in circumstances where it is clear that an obligation or a duty would arise, for example, within contractual relationships. However, an obligation can also arise in non-contractual relationships as well. This obligation will extend to third parties, provided that it is obvious that the information is of a confidential nature.
3. Unauthorised Use of the Information
Often information will need to be disclosed to a third party, who is not part of the agreement. The authority to disclose will be implied into the agreement, even if not expressly contained. There is doubt, however, as to whether the disclosure needs to be detrimental to the plaintiff for the claim of breach of confidence to succeed. In most cases, detriment can be assumed or implied, even if not obviously proven. Where information is commercial, disclosure to the competition is bound to have a detrimental effect on the plaintiff's trade.
Defences
Public Interest Defence - the only real defence is that disclosure of the information was within the public interest. This succeeded in the case of Lion Laboratories Ltd v Evans & Ors [1984] where the plaintiff's company made and supplied the police with intoximeters to test the breath of drivers. The defendants were technicians developing the device and were aware of the product's unreliability. Concerned that the police were making use of inaccurate and unreliable appliances, the defendants passed on the information to a newspaper. The defendants argued that it was in the public interest to disclose the possible unreliability of a device used as evidence against an individual charged with a criminal offence. The Court of Appeal said it had to weigh up the public's interest in maintaining secrecy in the plaintiff's documents against the public's interest in accuracy and reliability of an approved device used to determine someone's criminal conviction.
Where the information is about the personal details of a public figure, the court will now consider the interplay between Article 8 (right to respect private and family life) and Article 10 (right to freedom of expression) of the European Convention of Human Rights 1950.
Remedies
Damages for breach of confidence will generally be calculated on the basis of compensating for the conversion of property. Where there is a contract, it has been suggested that damages should be assessed on the basis of contractual principles in the Law of Contract. With regard to non-contractual relationships, Lord Denning suggested that the value of the information should be considered. If there is nothing special about the information, then damages should be on the basis of the cost of hiring the consultant. If it is special, then the damages may reflect the price a willing buyer would pay for the information on an open market.
The court may consider an injunction as a solution, however if the information is already within the public domain, then the court will not seek an injunction because it would be impractical and illogical to anonymise something that is already known to the public. The 'springboard doctrine' has been an exception to this, however.
"In almost every profession - whether it's law or journalism, finance or medicine or academia or running a small business - people rely on confidential communications to do their jobs. We count on the space of trust that confidentiality provides. When someone breaches that trust, we are all worse off for it." - Hillary Clinton