Publishers and broadcasters have an obvious interest in this question, but implied duties of confidence also arise for many other professionals – clergy, bankers, doctors and dentists for example.
And the law has long struggled with the duties of confidence imposed in employment contracts – just how far do they extend in respect of trade secrets and confidential information?
In the world of construction contracts, the law recognises that architects, engineers and surveyors may be under obligations of confidence. Theirs are "fiduciary relationships", which require a professional to exercise good faith – that is, confidential information obtained by professionals must not be used to the prejudice of the person who gave it. The problem is that the property market thrives on the "exchange" of information. When does that become a breach of confidence? Clients may have rather different views on this than their surveyors …
These implied duties of confidence are often reinforced by express contractual terms. Some simply act as a reminder to the consultant that they owe a duty of confidentiality; others extend to many sub-clauses spelling out in minute detail the scope, extent and duration of the duty.
Whispers, gossip and overheard conversations are the usual means of imparting confidential information
As with any other breach of contract, if an allegation is made, a breach must be proven. The person to whom the duty of confidence is owed must establish that:
- The information had the quality of confidentiality;
- It was imparted in confidence;
- Unauthorised use was made of it.
Whispers, gossip and overheard conversations are the usual means of imparting confidential information, but are difficult to prove unless one of those involved comes clean. Even then, certain circumstances can justify disclosure of confidential information, such as public interest issues.
But the real problems arise in relation to the remedies available. There are two main routes:
- In view of the need for swift action to check disclosure, injunctions are often sought to restrain it. This is a discretionary remedy and the courts will look at the "balance of harm", and whether damages would constitute an adequate remedy, before granting an injunction. But you need to know that disclosure of confidential information is about to occur in order to make an application – mere suspicion will not be enough.
- The main remedy is damages. In circumstances where confidential trade information is disclosed, for instance relating to an invention that has yet to be patented, or a database of customers, the proper measure of damages is loss of profit. Where a bribe has been paid, it can be recovered.
But in many cases, it is enormously difficult to recover damages. In National Westminster Bank plc vs Jeffrey Hal Bonas & Brice Droogleever & Co (2003), Mr Bonas alleged breach of confidence by his former solicitor. The firm acted for Mr Bonas, and for a friend who guaranteed his bank loan. Mr Bonas failed to repay the bank, which then looked to Mr Bonas' friend for repayment, and the solicitor then acted for him. The court was clear that that was wrong. However, it found that there was no causal link between a breach of confidence and the loss claimed by Mr Bonas.
Ann Minogue is a partner in solicitor Linklaters.