HELLO! SAYS GOODBYE! TO OVER £1 MILLION

Actions for breach of confidence in the UK rarely get to the stage at which the court is required to explain the basis upon which it makes its damages awards. This is why last week's judgment of Mr Justice Lindsay in Douglas, Zeta-Jones and Northern & Shell Plc v Hello! Ltd and others has attracted so much attention. In earlier proceedings the first to third defendants were found liable to all three claimants in connection with the publication of photographs of the wedding of Michael Douglas and Catherine Zeta-Jones in Hello! magazine, even though the happy couple had granted OK! the exclusive right to cover the event and publish photographs of it. All three claimants sought damages for wasted costs due to the rearrangement of contents which were to be published in future issues of OK!, as well as and a notional licence fee representing a reasonable sum which Hello! would have had to pay for permission to publish the unauthorised photographs. The Douglases also sought damages for distress and under the Data Protection Act 1998, while OK! sought damages for the loss of expected revenue from the two Douglas wedding issues which it had originally planned. Hello! challenged this head of damage, arguing that OK! had originally intended to publish just one Douglas wedding issue. OK! also complained that, by virtue of the publication of the unauthorised photographs in Hello!, those photographs were subsequently reproduced in some of the national newspapers, compounding the "spoiling" effect of Hello!'s publication of them.

In his judgment, Lindsay J started off by deciding that the Douglases' claims for distress and wasted costs were subsumed within their claim for a notional licence fee and that the claim by OK! for loss of expected revenue was in the alternative to its claim for a notional licence fee. Since the notional licence fee was only £125,000, which was not as great as the damages assessed on a compensatory basis, it was on the latter basis that damages would be awarded.

In the judge's opinion, if the events complained of not occurred, there would have been two OK! Douglas wedding issues, the print order for the first issue would have been increased to 2,500,000 and the print order for the second issue would have been 1,625,000. Assuming that those print orders would have been met by the printers, the total likely combined sales of those two issues would have been 3 million copies. Further, the publication of the unauthorised photographs in various national newspapers would not have taken place. In terms of causation, the newspaper publications were not so remote a consequence of Hello!'s publication that they should not be laid at Hello!'s door. Finally, taking into account the total cost of its putative sales, the loss of advertising revenue, credit for the actual sales and advertising, as well as wasted costs, Hello! was ordered to pay OK! £1,033,156. The Douglases fared rather less well in comparison, being awarded just £14,600 between them (this sum being made up of £3,750 each for distress, £50 each for damages under the Data Protection Act 1998 and £7,000 between them for wasted costs.

The IPKat notes that this case was fiercely contested from first to last and that hearings on pretrial issues reached the Court of Appeal on two occasions. He wonders whether even the very large damages award in this case would have exceeded the claimants' costs.

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