Factual and Procedural Background
This case concerns an application relating to a series of approximately 57 tweets published by a Twitter account known as "@MX1 Leaker" between 13 January 2017 and 13 March 2018. The tweets contained allegations of bribery and corruption against the First Claimant, an Israeli-based company providing content management and digital media services, which is an indirect subsidiary of the Second Claimant, a major communications satellite owner and operator. The Claimants alleged that the tweets caused and could cause serious damage to their business, which operates in a highly regulated sector subject to anti-bribery laws in multiple jurisdictions. The Defendant admitted operating the Twitter account. The Claimants further alleged that the Defendant acted in conspiracy with certain former employees (referred to as the "Former Employees") of the First Claimant, who were involved in related civil litigation, to injure the Claimants by publishing damaging and confidential information.
Procedurally, the Claimants initially sought a search order and Norwich Pharmacal relief to obtain disclosure against the Defendant, but the Chancellor declined the search order and the Norwich Pharmacal relief application was later withdrawn by the Claimants. A preservation order for certain information was granted and continued with the Defendant's consent. The Defendant applied to strike out the Claimants' statement of case under CPR 3.4(2) or alternatively for summary judgment under CPR 24.2, arguing no reasonable grounds for the claim and no real prospect of success. The only substantive application before the court was therefore the Defendant's strike-out/summary judgment application, which was considered against the factual background outlined.
Legal Issues Presented
- Whether the Claimants have properly pleaded a cause of action for lawful means conspiracy.
- Whether the applicable law governing the lawful means conspiracy cause of action is English law or foreign law, specifically Israeli law, under the Rome II Regulation.
- Whether the Claimants have properly pleaded a cause of action for unlawful means conspiracy based on breach of confidence.
- Whether the Defendant's application to strike out or for summary judgment should succeed on the grounds that the Claimants have no real prospect of success.
Arguments of the Parties
Claimants' Arguments
- The tweets published by the Defendant caused and threatened serious damage to their business, including damage in England and Wales.
- The Defendant acted in conspiracy with Former Employees to injure the Claimants by publishing damaging allegations and confidential information.
- The predominant purpose of the conspiracy was to injure the Claimants, as evidenced by the content and timing of the tweets.
- English law applies to the causes of action pleaded.
- The Claimants referenced draft Amended Particulars of Claim to clarify their pleadings and sought the opportunity to amend if necessary.
Defendant's Arguments
- The lawful means conspiracy cause of action was defectively pleaded because no sufficient unlawful object was set out.
- Under the Rome II Regulation, the applicable law is foreign law (Israeli law) which does not recognize lawful means conspiracy, leading to failure of the claim.
- The unlawful means conspiracy claim was defectively pleaded due to absence of proper pleading on confidentiality and knowledge of confidentiality.
- The Claimants had no real prospect of succeeding on the claim and the claim should be struck out or disposed of by summary judgment.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Crofter Hand Woven Harris Tweed Co. v. Veitch [1942] AC 435 |
Definition and requirements of lawful means conspiracy, including the need for an unlawful object as the predominant purpose. |
Used to analyze the Claimants' pleading of lawful means conspiracy and to emphasize the subjective nature of the unlawful object requirement. |
| Sorrell v. Smith [1925] AC 700 |
Clarification on the meaning of "object" or "purpose" in conspiracy and the subjective test for unlawful purpose. |
Referenced to explain the court's approach to inferring the purpose of conspirators from their state of mind. |
| Huntley v. Thornton [1957] 1 WLR 321 |
Illustration that a party lacking the requisite unlawful object is not guilty of conspiracy. |
Applied to consider whether all parties to the alleged conspiracy shared the unlawful object. |
| Vestergaard Frandsen A/S v. Bestnet Europe Ltd [2013] UKSC 31 |
Requirement that the defendant must know information is confidential for unlawful means conspiracy. |
Not fully addressed due to lack of argument from Claimants, but noted as relevant to the defective pleading of unlawful means conspiracy. |
| Campbell v. Mirror Group Newspapers Ltd [2003] QB 633 |
Confidentiality and knowledge requirements in unlawful means conspiracy. |
Referenced in support of the Defendant's contention on defective pleading of unlawful means conspiracy. |
| Bier v. Mines de Potasse d'Alsace SA [1976] ECR 1735; [1978] 1 QB 708 |
Jurisdiction and applicable law in tort cases based on the place where the harmful event or damage occurred. |
Used to interpret Article 4 of the Rome II Regulation regarding applicable law for non-contractual obligations. |
| Hillside (New Media) Ltd v. Baasland [2010] EWHC 3336 (Comm) |
Application of reversibility test to determine place of damage for financial loss under Rome II Regulation. |
Applied to analyze the location of the Claimants' financial loss and the applicable law. |
| Raiffeisen Zentral Bank Österreich AG v. Tranos [2001] ILPr 9 |
Reversibility test and timing of damage for jurisdictional purposes. |
Referenced to support the approach to identifying the place where damage occurs. |
| Faccenda Chicken Ltd v. Fowler [1987] 1 Ch 117 |
Law regarding duty of confidence and confidential information. |
Referenced to highlight the unpleaded basis for confidentiality in the unlawful means conspiracy claim. |
Court's Reasoning and Analysis
The court first considered the pleading of lawful means conspiracy, applying the established legal test requiring an agreement with an unlawful object and resulting damage. The court emphasized that the "object" or "purpose" is subjective and must be ascertained from the minds of the alleged conspirators. The court found the Claimants' pleading defective because it derived the object from the conspiracy's purpose rather than from the subjective states of mind of the parties and failed to clearly plead the Defendant's and Former Employees' unlawful object. The particulars provided were also insufficiently clear or supportive of the pleaded unlawful purpose.
Regarding the applicable law, the court applied Article 4 of the Rome II Regulation, which states that the law applicable to a non-contractual obligation is that of the country where the damage occurs. The court analyzed the Claimants' pleaded losses, focusing on a financial loss of at least £100,000 incurred in England. Applying the "reversibility" test from relevant case law, the court found that the loss was suffered in England, making English law applicable to that part of the claim. The court rejected the Defendant's argument that the damage must predominantly occur in England for English law to apply, noting that multiple laws may apply where damage occurs in multiple jurisdictions.
On the unlawful means conspiracy claim, the court found the pleading defective for failure to plead how the duty of confidence arose, the basis for confidentiality, and the Defendant's knowledge of confidentiality. The Claimants did not address these criticisms, and the court struck out this claim.
The court allowed the Claimants an opportunity to apply to amend the lawful means conspiracy pleading within 14 days, recognizing that improvements might be possible.
Holding and Implications
The court STRUCK OUT the Claimants' unlawful means conspiracy claim for defective pleading and was minded to strike out the lawful means conspiracy claim as presently pleaded, but granted the Claimants leave to apply to amend the pleadings within 14 days.
The court held that English law applies to at least part of the Claimants' losses under the Rome II Regulation. The Defendant's application to strike out on the basis of foreign law was rejected in respect of the pleaded English loss. The Claimants' withdrawal of their Norwich Pharmacal application and the Defendant's undertaking limited the scope of further relief.
The decision affects the parties by narrowing the issues and claims proceeding, but does not establish new legal precedent beyond the application and interpretation of existing principles on conspiracy, confidentiality, and applicable law under Rome II.