Insufficient media saved the phone hack claim? Various Claimants v MGN Ltd

This article was first published by LexisPSL on 7 June 2022

What are the practical implications of this case?

As with any summary judgment application, the onus was on MGN to satisfy the court that there would be no reasonable prospects of success at trial.

Significantly, and perhaps uniquely to phone hacking litigation, the court explained that the scale of the unlawful activity had only become clear after the trial in Gulati and others v MGN Ltd [2015] EWHC 1482 (Ch) and the court stated that it was significant that MGN was still denying extensive phone hacking right up until the trial.

The judgment hinged on whether MGN could persuade the court that, regardless of any evidence that the claimants may call at trial, and regardless of arguments that may be presented, there was no real prospect of the claimants proving that they were not put on inquiry by the media coverage.

The irony is that a mixture of insufficient media coverage pre-trial and during the Gulati trial and the fact that the extent of phone hacking was not known until the trial had commenced and meant that the claimants would not have been expected to investigate or indeed realise that they had to monitor developments closely.

It now seems inevitable that more than 80 claims will proceed to trial.

What was the background?

MGN is the publisher of the Daily Mirror, Sunday Mirror and Sunday People. The phone hacking litigation has been ongoing since 2011 and there are currently more than 80 individual claims which are progressing towards a third trial which was scheduled to start around May 2023.

This application was a summary judgment application issued by MGN in which MGN argued that each claimant knew all of the relevant facts to be pleaded in the claim form at or shortly after the time of publication of the articles.

There were 23 applications, however, the court heard a sample of six, they were:

• Nikki Sanderson (claim issued 7 December 2020; published articles 2003–2009)
• Zoe Grace (claim issued 3 March 2021; published articles 2000–2009)
• Ingrid Dupre (claim issued 6 July 2021; published articles 1998–2008)
• Fiona Wightman (claim issued 30 July 2021; published articles 2000–2002)
• Paul Sculfor (claim issued 15 June 2021; published articles 2007–2009), and
• Eric Tomlinson (claim issued 5 August 2021; published articles 1999–2009)

The cases of Dupre, Wightman, Sculfor and Tomlinson were issued more than six years after the publication of the Gulati judgment and the Sanderson and Grace claims less than six years after publication.

MGN admitted that it had concealed information relating to unlawful information gathering.

Limitation of six years under LA 1980, s 2 had expired in each case. Therefore, the limitation argument would be successful unless a claimant could prove a case under LA 1980, s 32(1)(b).

What did the court decide?

The proposed transaction was approved in principle, but the court needed to be satisfied about further details.

As to use of the sale proceeds, and Kireeva’s prospective proprietary interest, the judge did not find the issue straightforward, and considered a number of factors, including: (i) Kireeva had never sought interim proprietary relief; (ii) the Court of Appeal had decided she had no interest; (iii) there was a potentially arguable case for a receiver, albeit on terms preserving GB’s ability to fund expenditure; (iv) Kireeva had claimed an entitlement to all of GB’s assets, including after-acquired property, such that GB could not use different assets of his to fund expenditure; and (v) Kireeva’s outstanding declaration application was not unarguable even though it would undermine the decision on the immovables rule.

Accordingly, the better approach, especially given Kireeva’s extant declaration application, was to proceed on the basis that Kireeva had an arguable proprietary claim to the sale proceeds. However, there was a discretion to permit the use of funds for GB’s expenditure, and relevant to that was the conduct of the proceedings to date. Accordingly, subject to further evidence, the court permitted that use in certain respects and, in others, a more granular approach was to be adopted.

As to GB’s declaration application, honest solicitors were not to be imputed with knowledge of a proprietary interest (and were not therefore accountable for monies received) because they knew of the existence of a (disputed) claim to that effect against their client (Carl Zeiss Stiftung v Herbert Smith & Co (No. 2) [1969] 2 Ch 276). There was a distinction between notice of a claim and notice of facts that demonstrated that a proprietary claim was well-founded. The court concluded that it was not in a position to determine GB’s application at this stage.

The court’s remit was to decide whether each of the claimants had a real prospect of proving that six years before issuing the claim form, they neither knew nor could by exercising reasonable diligence have known the relevant facts to plead allegations of MGN’s wrongdoing.

The allegations of wrongdoing were:

• MGN publishing each article where the wrong alleged is a breach of confidence, or
• a misuse of private information or carrying on or commissioning ‘unlawful information
• gathering (UIG)’ (which amounts to misuse of private information)

The court decided that a reasonably attentive person who had suffered as a result of MGN’s

newspapers publishing information about them would have picked up on some of the pre-trial and trial coverage of Gulati and only an unattentive person would not have learnt about phone hacking activities. The court then went on to state that the scale and reach of phone hacking activities was still unclear at the time and the story only began to ‘unwind’ during the trial itself.

Somewhat ironically, it might have been the media that assisted the claimants’ position because the court said that it was arguable that there was insufficient media coverage to cause a reasonable person in the claimants’ position to investigate that what had happened to them previously was to do with MGN’s activities. The court also stated that the coverage may have been insufficient for the claimants to realise they needed to monitor developments closely.

Interestingly, the court highlighted that MGN were still denying phone hacking, even though MGN had admitted some phone hacking carried out by a few journalists and that there was nothing prior to the judgment that would ‘blow the cover off the deception’.

The court decided that there was ‘real doubt’ that it would be appropriate to determine on a summary basis and that the issues are not ‘clear-cut’. Therefore, the court held that the issues should be determined at trial.​​​​​