12.11.03

Damages in Douglas v Hello - are the courts furthering the creation of a Publicity Right?

The long awaited ruling on damages in Douglas & Ors. V. Hello [2003] EWHC 2629 (Ch) may have come as a blow to the Douglas' and Jones' but offer commercial compensation to OK! Magazine.

While many find the notion of being able to recover damages for some unofficial pictures of a wedding that had already been sold a distasteful one, the Courts have come up with a commercial solution that puts some justice back into their original judgment in April.

We have seen on numerous occasions that Courts will readily award damages where financial losses can be quantified but seem more reluctant where personal or moral misdemeanour is the principal casualty. Privacy as a legal principle has been rejected by the courts so that the preferred avenue for bringing such an action is for breach of confidence.

In ruling on damages in the current case, Mr Justice Lindsay sitting in the High Court has steered the recovery of damages for breach of confidence down a strict and well reasoned commercial course and not, as many had feared, down a pro-celebrity path that would provide convenient compensation for the rich and famous. Breach of confidence or invasion of privacy is not of itself a justification for financial reward. What is required is quantifiable economic loss. In this sense the damages award in Douglas v. Hello is reasoned along the lines of consequential economic loss in tort rather than compensatory damages for breach of confidence. In adopting this approach the Courts are effectively opening up the way for a new commercially driven publicity right which is geared more towards personality rather than persona.

Of Michael Douglas's and Catherine Zeta Jones' claim for distress Mr Justice Lindsay said that he "failed to understand how one could properly recover in respect of distress, wasted costs or for loss of sales in respect of that which, for a consideration, one is to be taken notionally to have authorised" This approach is to be welcomed and answers the sceptics plea not to reward the rich for such infringements. If you have licensed something then you cannot complain about the distress of that which you were happy to license being available. In other words your claim, if any, will be one of economic loss or copyright infringement.

Zeta Jones claimed to be distressed by a picture of her eating cake but the Court accepted the view of expert witness and former Sun editor Kelvin McKenzie that the pictures were "terrific". And Mr McKenzie is a man in the know given his recent run in with Eddie Irvine over using his photo to promote Talksport.

So the Court awarded the Douglases £14,600 and OK! Magazine £1,033,156 while the Douglases claim for breach under the Data Protection Act received the £50 award it deserved.

The rationale for the amounts is simple and centred on the claim by OK! for loss of expected revenue from their planned wedding edition sales and the joint claim for a notional licence fee representing reasonable consideration payable by Hello! for permission to publish the unauthorised photographs - this could in itself raise some interesting copyright issues.

Mr Justice Lindsay did not accept liability arising out of the breach of confidence and rejected the traditional "but for " test in this regard stating that the suggestion that the losses described "would not have occurred "but for" the breach of confidence complained of does not, of itself, make a party liable. I add that in my judgment such losses were sufficiently consequential upon the breach and sufficiently foreseeable to make Hello! Liable for them in the ordinary way." OK! Received its compensation on the basis of economic loss and such loss was £1,033,156. The Douglases distress was only acknowledged to the extent it covered that caused by the thought of there being an intruder at their wedding and publication of unauthorised pictures - as opposed to pictures per se. That value was placed at £3,750 each and their claim for losses incurred in having to get their wedding photos processed more quickly was reduced from £13,000 to £7,000.

The case for economic loss having been made out the Court did not need to rely on the claim for a notional licence fee - i.e. copyright licensing the photos that had been taken by another. To be helpful, the Court still put a figure on this - £125,000 - so concluded that the parties would be best served by the higher economic loss award.

The judge added that the award was not meant to be punitive and given Hello!'s resources did not consider this as an infringement on the magazine's right to freedom of expression.

While both parties, not least the lawyers, may claim to be winners in this litigation the key question is this - were the Douglases not rich and famous and had they not struck a $1m deal with OK! Magazine, what protection would the Courts offer someone who had unauthorised pictures of their wedding published. With no privacy law and no economic loss, the answer would appear to be little. Celebrities, this PUBLICITY RIGHT would appear to be yours.

No comments: