CREAM FLOATS TO THE TOP COURT, THEN SINKS

Last week the House of Lords clarified the law on interim injunctive relief to protect allegedly confidential information when it gave its ruling in Cream Holdings and other v Banerjee and others.

Banerjee, an ex-employee of Cream, passed confidential information to a local newspaper, the Liverpool Echo, which had published some articles relating to Cream. Cream sought injunctive relief to stop the Echo publishing any further confidential information. The trial judge granted an interim injunction on the basis that Cream had established that it had a "real prospect of success" at trial, thereby satisfying the test of there being a likelihood that a permanent injunction would be granted, which was necessary if the reportage of allegedly public interest information was to be suppressed under the Human Rights Act 1998, section 12(3).

On appeal, Banerjee and the Echo argued that the judge had applied the wrong test under s.12(3). A "real prospect of success" could exist even if that prospect was only a 10% chance. He should, they said, have applied a test of Cream being "more likely than not" to get a permanent injunction. The Court of Appeal dismissed their appeal: in the opinion of a majority of that Court, the trial judge had given the correct interpretation to "likely" in s.12(3). Banerjee and the Echo appealed further to the House of Lords, which allowed their appeal.

The House of Lords considered that the purpose of s.12(3) was to emphasise the importance of freedom of expression even at the interlocutory stage of litigation. It set a higher threshold for the grant of interim injunctions against the media than the American Cyanamid guideline of there having to be a "real prospect of success" at trial. However, "likely" could not have been intended to bear the meaning originally contended for by the Echo, that of being "more likely than not": that would set the degree of likelihood too high and would not be workable in practice.

Their Lordships ruled that there could be no single, inflexible standard governing all applications for interim restraint orders. The necessary degree of flexibility was achieved on a construction of s.12(3) that required an applicant's prospects of success at trial to be sufficiently favourable to justify such an order being made in the particular circumstances of the case. As a general approach, courts should be very slow to make interim restraint orders where the applicant had not demonstrated that he would probably succeed at trial. However, some cases would require a departure from that general approach, and in those cases a lesser degree of likelihood would suffice.

The IPKat accepts that the decision to allow the appeal and to set aside the iterim injunction was right on the facts of the case. He is however dismayed that, instead of any sort of crisp, clear legal guidance, the House of Lords has fallen back on the old routine of "It all depends on the facts, in all the circumstances". This is an invitation to litigants to carry on litigating in any and every case where the circumstances are not crystal clear.

More Cream Holdings here and here
Cream in Liverpool here