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English High Court Awards Damages for Quasi-Defamation Data Claim

By Louise Freeman, Dan Cooper & Tom Cusworth on September 17, 2020
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The English High Court has recently awarded damages in a data privacy case, with two features of particular interest.  First, the nature of the claim is more reminiscent of a claim in defamation than for data privacy breaches, which is a development in the use of data protection legislation.  Secondly, the damages awarded (perhaps influenced by the nature of the case) were unusually high for a data privacy case.

The decision highlights an unusual use of data protection in English law, as a freestanding form of quasi-defamation claim, as the claimants sought damages for reputational harm (as well as distress) solely under the Data Protection Act 1998 (the “DPA”, since replaced by the Data Protection Act 2018, which implemented the General Data Protection Regulation ((EU) 2016/679) (GDPR) in the UK) rather than in a libel or defamation claim, or in parallel with such a claim.  It also sets a potentially unhelpful precedent by awarding two of the claimants £18,000 each for inaccurate processing of their personal data, an amount that is significantly higher than has been awarded in other data protection cases brought under the DPA.  If such awards were to be made in the context of a class action, the potential liability for data controllers could be significant.

In short, the case relates to the so-called “Trump Dossier” (the “Dossier”), an intelligence memorandum prepared by Cristopher Steele, the principal of Orbis Business Intelligence Limited (“Orbis”), on links between Russia, Vladimir Putin and President Trump.  The claim was brought by three individuals named in the Dossier under the DPA.  The Dossier included allegations about the claimants, including that they or their organization (the Alfa Group) did “significant favours” for Mr. Putin, and were involved with “illicit cash.”

The claimants sought redress in the English court only under the DPA, for breaches of the First Principle (which requires processing of personal data be, inter alia, fair and lawful) and the Fourth Principle (which requires that data be accurate), and did not pursue defamation claims in the UK, though they have done so in the U.S.

Orbis denied that all of the data was personal data and that the allegation relating to “illicit cash” was sensitive personal data and further denied that the information was inaccurate.  It also relied, inter alia, on the provisions of the DPA that exempt processing (i) where it is necessary for the purpose of prospective legal proceedings, or obtaining legal advice, and (ii) where it is required to safeguard national security.

In his judgment, Mr. Justice Warby made the following findings:

  • By looking at the source as whole, interpreting as an ordinary reader would, the allegations made against the claimants were their personal data and the allegation regarding “illicit cash” was sensitive personal data as it was an allegation of a criminal offence, even though the Dossier did not identify a specific criminal offence.
  • Orbis could not rely wholly on either exemption in its compliance with data protection principles and therefore Orbis could not avoid liability for inaccurate processing where it could not show that it had taken reasonable steps to ensure its accuracy.
  • The principles established in defamation cases on the question of whether the data was fact or opinion were applicable, finding that the allegations (including the allegation regarding “illicit cash”) were factual and therefore could be verified.
  • For each of the allegations, apart from one, Orbis/Steele had taken reasonable steps to ensure their accuracy.  However, for the most serious allegation, regarding “illicit cash,” reasonable steps had not been taken to ensure accuracy as this allegation of serial criminal wrongdoing against two of the claimants had only a single source, was reliant on hearsay, and had not been adequately verified.

The judge concluded that Orbis was therefore liable for inaccurate processing of the allegation regarding “illicit cash”, and awarded £18,000 in compensation to each of the first and second claimants.  He found that the court was free to award damages for reputational harm in claims brought solely under the DPA, and adopted an approach to damages from the law of defamation, giving no consideration as to the award relative to other awards for distress in data protection cases, despite this award being significantly higher than awards in previous cases.

Photo of Louise Freeman Louise Freeman

Louise Freeman represents parties in complex commercial disputes and class actions, and co-chairs the firm’s Commercial Litigation and EMEA Dispute Resolution Practice Groups.

Described by Legal 500 as “one of London’s most effective partners,” Louise helps clients to navigate challenging situations in a…

Louise Freeman represents parties in complex commercial disputes and class actions, and co-chairs the firm’s Commercial Litigation and EMEA Dispute Resolution Practice Groups.

Described by Legal 500 as “one of London’s most effective partners,” Louise helps clients to navigate challenging situations in a range of industries, including technology, life sciences and financial markets. Most of her cases involve multiple parties and jurisdictions, where her strategic, dynamic advice is invaluable. Chambers notes “Louise is tactically and strategically brilliant and has phenomenal management skills on complex litigation,” she is “a class act.”

Louise also represents parties in significant competition law claims, including a number of the leading cases in England.

Louise is a “recognised name for complex class actions” (Legal 500), defending clients targeted in proposed opt-out and opt-in claims, as well as advising clients on multi-jurisdictional class action risks.

Read more about Louise FreemanEmail
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Photo of Dan Cooper Dan Cooper

Daniel Cooper is co-chair of Covington’s Data Privacy and Cyber Security Practice, and advises clients on information technology regulatory and policy issues, particularly data protection, consumer protection, AI, and data security matters. He has over 20 years of experience in the field, representing…

Daniel Cooper is co-chair of Covington’s Data Privacy and Cyber Security Practice, and advises clients on information technology regulatory and policy issues, particularly data protection, consumer protection, AI, and data security matters. He has over 20 years of experience in the field, representing clients in regulatory proceedings before privacy authorities in Europe and counseling them on their global compliance and government affairs strategies. Dan regularly lectures on the topic, and was instrumental in drafting the privacy standards applied in professional sport.

According to Chambers UK, his “level of expertise is second to none, but it’s also equally paired with a keen understanding of our business and direction.” It was noted that “he is very good at calibrating and helping to gauge risk.”

Dan is qualified to practice law in the United States, the United Kingdom, Ireland and Belgium. He has also been appointed to the advisory and expert boards of privacy NGOs and agencies, such as the IAPP’s European Advisory Board, Privacy International and the European security agency, ENISA.

Read more about Dan CooperEmail
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  • Posted in:
    Privacy & Data Security
  • Blog:
    Inside Privacy
  • Organization:
    Covington & Burling LLP
  • Article: View Original Source

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