Another decision showing what parties can - and cannot - do when they receive a draft judgment under embargo

In a recent decision, the High Court found that there was a clear breach of the embargo on a draft judgment where the defendant disclosed the outcome to journalists on confidential terms and subject to an agreement that they would not publish anything until after formal hand down. However, it was not a breach to disclose the decision to a number of employees who needed to know the result in order to prepare a press release and customer video ready for hand down, or to assess technical and design changes that might need to be made to the defendant's service in light of the judgment: Match Group LLC v Muzmatch Ltd [2022] EWHC 1023 (IPEC).

This is the most recent in a run of decisions in which the courts have considered what is, or is not, permitted under the embargo. The decision is not surprising in confirming that disclosure to external parties (such as the journalists in this case) will be a breach, even if accompanied by instructions to keep the information confidential and not take any action before the judgment is handed down.

It is helpful, however, in confirming that parties to litigation are entitled to take internal steps to prepare for publication of the judgment, including teeing up draft communications to customers or the press and considering any immediate operational impact. These are legitimate purposes within the embargo - in contrast to where counsel or solicitors prepare their own draft press release, which has been found to fall outside the purposes of the embargo (see R (Counsel General for Wales) v BEIS [2022] EWCA Civ 181, considered in this recent post on Practical Law's Dispute Resolution blog).

The decision does however emphasise that corporate parties who receive a draft judgment should consider carefully which employees really need to know the result, in order to prepare the company for publication of the judgment. As the court commented in this case, the greater the number of persons who are informed, the greater the risk that use will stray beyond the permitted purposes or that there will be an unlawful disclosure - potentially leading to proceedings being pursued for contempt of court, or at least public censure.

Background

The underlying action was for trade mark infringement and passing off in relation to the word "match" for online introduction and dating services. A draft judgment (in favour of the claimant) was sent to the parties several days before it was to be handed down. The draft made clear that it was provided in confidence and subject to the terms of Practice Direction (PD) 40E (Reserved Judgments), which stipulates that:

• neither the draft judgment nor its substance may be disclosed to any other person or used in the public domain; and
• no action may be taken (other than internally) in response to the draft judgment before the judgment is handed down.

Shortly before the judgment was handed down, the court was told that the claimant had been approached by members of the press who were aware of the outcome of the case and had asked for comments, saying they would not publish anything until after the judgment had been handed down.

It transpired that Y, the second defendant and CEO of the first defendant, had been the source of the journalists' information. Y had informed a number of the first defendant's employees of the outcome of the case, including A (the Head of Marketing) so that they could together prepare a press release for publication after the judgment was handed down. The press release was then prepared, with a heading saying "EMBARGOED UNTIL 20th APRIL 10:30AM BST" (ie the time scheduled for hand down), and A provided it to a number of journalists who had agreed to respect the embargo.

When the issue arose, Y accepted that there had been a breach of the embargo for which he apologised unreservedly. In response, the claimant made no criticism of the defendants' solicitors, who had taken various steps including advising Y not to tell anyone about the draft judgment without first speaking to the solicitors. The claimant was however was highly critical of Y, though it confirmed it did not intend to initiate proceedings against him for contempt of court.

The judge decided it was appropriate to deal with the issue without a hearing, and gave a written judgment based on the papers.

Decision

The court (Nicholas Caddick QC sitting as a deputy High Court judge) was satisfied that no criticism should attach to the defendants' solicitors. In relation to Y, the court was satisfied that it was not a breach of the embargo to disclose the draft judgment to certain of the defendant's employees. The disclosure to the journalists was a clear breach, but on the facts of the case the court was satisfied that no further action was necessary.

At the outset of his decision, the deputy judge referred to two recent Court of Appeal decisions relating to breaches of the embargo.

First, the BEIS decision, referred to above, in which Sir Geoffrey Vos MR stated:

"It is important, therefore, to understand why judgments are handed down in draft under embargo in the first place. .... the process is to enable the parties to make suggestions for the correction of errors, prepare submissions and agree orders on consequential matters and to prepare themselves for the publication of the judgment."

He made it clear that dissemination for any other purpose is forbidden, unless specifically authorised by the court, and that in future "those who break embargoes can expect to find themselves the subject of contempt proceedings".

Second, The Public Institution for Social Security v Banque Pictet & Cie SA [2022] EWCA Civ 368, in which (despite the MR's comments) the court decided against initiating contempt proceedings. In that case a lawyer had breached the embargo by sending a WhatsApp message (saying "we just won") to a number of senior partners in his firm and (by mistake) to 41 international lawyers. The court decided not to take further action because the lawyer had provided a full apology for the internal disclosure, and the external disclosure had been an inadvertent error.

Disclosure to employees

In the present case, the deputy judge considered (and the claimant accepted) that disclosure to the Head of Marketing, for the purpose of preparing the press release, fell within the scope of what was permissible as explained by the MR in the BEIS case - ie the defendants preparing themselves for publication of the draft judgment.

Two other employees had been told the result so that they could help Y prepare a recorded video statement to be sent to customers after hand down. Again, the claimant accepted that this was permitted, and the deputy judge agreed.

Three other employees had been informed so that they could start thinking about the technical and design changes the defendants might be required to make to their service. Contrary to the claimant's submissions, the deputy judge considered that this was a proper purpose. The judgment was clearly likely to have serious repercussions on the defendants' operations and they needed to consult internally to identify any technical and design implications that might be relevant in preparing submissions on the judgment, agreeing orders on consequential matters and preparing themselves for publication. CPR PD40E makes clear that such internal action is not prohibited, and all of these employees were told that the information was confidential and should not be shared with anyone. It made no difference whether the defendants were intending to appeal the decision.

Accordingly, the deputy judge was satisfied that none of the internal disclosures were in breach of the embargo - though he emphasised that parties in receipt of a draft judgment should always give careful thought as to who really needs to know the result given the purposes outlined by the MR in BEIS.

Disclosure to journalists

The deputy judge noted that Y had apologised wholeheartedly for his actions regarding the disclosure of information to journalists. His explanation was that he honestly believed he could communicate the outcome and share a press release so long as it was done on a strictly confidential basis and the information was not published before the judgment was formally handed down.

The deputy judge considered that it should have been clear to Y that this was not permitted, and the breach was a serious one. However, he found that it was appropriate to accept Y's apology as resolving the matter, bearing in mind his conclusion that it was a genuine mistake on the part of Y.