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Breach of confidence and whistleblowing

BREACH OF CONFIDENCE AND WHISTLEBLOWING

What does it mean?

In the workplace, a breach of confidence can take place when a worker, either intentionally or unintentionally, discloses or uses information that could damage the employer’s business, clients, or employees. If a worker breaches confidentiality, legal action may be taken against them by their employer.

The law of confidentiality is complicated. Occasionally, if a worker innocently removes information from their workplace (e.g. documents, hard drives, photocopies), their employer will bring a claim for breach of confidence – even if the information removed by the worker isn’t truly confidential.

If you’re unsure whether you’ve breached confidentiality, or whether information you’re seeking to disclose or use is confidential, you may wish to consider the legal principles set out below. Please note that these are guiding legal principles only.

When will a breach of confidence take place?

For information to be protected under the law of confidentiality, three requirements must be met. These were first set out in the case of Coco v AN Clark (Engineers) Ltd [1968] F.S.R. 4155.

1. The information must have the necessary quality of confidence

Whether information has the necessary quality of confidence (it is confidential) very much depends on the individual circumstances of each case. Essentially, it mustn’t be public knowledge. In many cases, confidential information is easily recognisable, e.g. secret formulae and trade secrets. In other cases, it’s more difficult to work out, e.g. where the information isn’t public knowledge, but can still be pieced together with some care and skill.

Importantly, labelling information as confidential doesn’t automatically make it so. As such, your employer can’t ask you not to breach the confidentiality of information that isn’t truly confidential to begin with.

2. The information must have been received in circumstances giving rise an obligation of confidence

These circumstances exist, if when you receive the information, you knew, or ought to have known, that the information was confidential in nature. Typically, this will be the case where you’ve signed a confidentiality or non-disclosure agreement. Alternatively, the confidentiality of information can be implied by the circumstances of the disclosure, or by a special relationship (e.g. an employer/worker relationship).

In Coco v AN Clark, the court found that the test for deciding whether an obligation of confidentiality arises out of the circumstances of disclosure is whether “a reasonable man standing in the shoes of the recipient of the information would have realised that upon reasonable grounds the information was being given to him in confidence”.

3. There must be an unauthorised use of that information

Importantly, you don’t have to actually use or disclose the information without authorisation – simply threatening to use or disclose it may be enough.

If information is disclosed to you for a specific purpose, then using it for all other purposes would be unauthorised.

What information can be confidential?

Almost any type of information can be confidential, including: correspondence, contracts, formulae, recipes, processes, business methods, financial information, statistical information, customer lists, plans, sketches, drawings, photographs, business plans, computer programs, discoveries, scientific theories and mathematical methods.

Can I still breach confidence if I'm no longer employed?

Well, it depends! The leading case on the extent to which confidentiality obligations can continue after employment has ended is Faccenda Chicken Ltd v Fowler [1987] Ch. 117. The court held that information received by workers during the course of employment falls into one of three categories:

1. Trivia of the business. This information isn’t confidential, and includes all information about the organisation or industry that is available to the public, either generally or on demand.

2. Information which has some confidential element. This is information that an employer can require a worker to keep confidential while they are employed, and potentially for a limited time afterwards.

3. Truly confidential trade secrets. This is information that is confidential while the worker is employed, and remains confidential forever after employment has ended.

In order to decide whether information falls into category 1, 2 or 3, you should ask yourself whether a person of ordinary honesty and intelligence would recognise the information as the employer’s property.

Official Secrets Act 1989

Among others, civil servants, members of the armed forces, and members of the national security services have additional confidentiality obligations under the Official Secrets Act 1989 (OSA). The OSA, which criminalises disclosure of government information, is an outdated statute and one that Protect is advocating to reform.

What can happen if I breach confidence?

If your employer brings a legal claim against you for breach of confidence and is successful, the court may award three different kinds of remedy:

Injunction. The court may order you to not disclose or use the information. Injunctions are the most common remedy for breach of confidence, and are general sought alongside either account of profits or damages (your employer can’t get both).

Account of profits. If you have used the information to make a profit, the court may order you to hand over this profit to your employer, in order to compensate your employer for any profit they might have lost.

Damages. The court may order you to pay damages to your employer to compensate them for any loss they may have suffered. Often, damages are calculated by looking at the market value of the information, or the value of an agreement to license or purchase the information.

It’s important to understand that claims for breach of confidence are brought in standard civil courts, and not in the Employment Tribunal. As such, the Civil Procedure Rules (CPR) apply. This will effect costs. Indeed, if your employer is successful in their claim against you, you may be ordered to pay all or part of their legal costs. Under CPR 44.2, the general rule on costs is that the unsuccessful party will be ordered to pay the costs of the successful party.

Is there a public interest defence?

Certain information cannot be confidential. Case law has developed to recognise that in very limited circumstances, the public interest may be more important than an obligation of confidentiality, including one owed by a worker to their employer. This common law public interest defence is similar to whistleblowing protection under the Public Interest Disclosure Act 1998 (PIDA).

If you are able to show that revealing confidential information was in the public interest, you may have a defence to claims for both misuse of private information and breach of confidence. Unfortunately, there is no general rule to determine whether the common law public interest defence applies. Courts examine the individual facts of each case in reaching their decisions. In the past, the defence has been raised in respect of the covering up of criminal activity, financial irregularities, conduct misleading the public, and dangers to public health.

What if I disclose confidential information by whistleblowing?

If you disclose confidential information while making a protected disclosure, either to your employer or to a regulator (e.g. the FCA, the Care Quality Commission…), there can be no breach of confidence.

However, remember that various conditions need to be present in order for a disclosure to be protected disclosure. If you have raised concerns but not actually met the conditions for a protected disclosure, or if you disclose confidential information in order to show that you’ve been victimised for whistleblowing, e.g. by downloading and submitting in evidence your employer’s private emails or documents, you may be independently liable for breach of confidence.

If you are reporting crime or fraud to a regulator, you may be able to rely on a common law public interest defence, as outlined in the previous section (even if it turns out that you are not making a protected disclosure).

Dos and Don'ts

  • Do remember that any term in your contract which tries to prevent you from making a protected disclosure is void (it has no legal effect).
  • Do remember that any provisions in a Non-Disclosure Agreement (“NDA”) that try to prevent you from making a protected disclosure are void.
  • Do raise concerns with the correct ‘Prescribed Person’ (e.g. the FCA, the Care Quality Commission…), if you are unable to raise concerns with your employer, so as not to lose your whistleblowing rights. As well as satisfying the usual conditions for making a protected disclosure, when disclosing to a prescribed person, you must have a reasonable belief that the matter you are raising falls within the remit of the prescribed person and that the information disclosed and the allegations contained in it are substantially true. See our webpage on raising concerns externally for more information.
  • Do consider whether it is necessary to disclose sensitive or confidential information when making your whistleblowing report.
  • Do remember that, if you are a civil servant, in the armed forces, or work in national security then there are additional confidentiality obligations under the Official Secrets Act 1989, which, if not followed, could result in criminal conviction.
  • Don’t share confidential information with more people than is necessary.
  • Don’t take confidential information (documents etc.) home from the workplace unless authorised to do so.
  • Don’t send confidential information without a password or encryption; this will help ensure that only the correct recipient can open it.

FAQs

I made a protected disclosure to a regulator and now my employer is threatening me with a breach of confidence claim. What should I do?

The first step is to obtain independent legal advice in order to understand the merits of the case against you (i.e. how likely it is that the claim will be successful). Depending on the advice you receive, it may be sensible to try to talk to your employer in order to understand the reasons for the threat, what confidential information they think you have disclosed, and whether there are any steps you can take to put their concerns to rest.

Having made a protected disclosure to a regulator, you may also wish to make them aware of the threats that you have received from your employer.

I suspect that certain senior managers at work are committing wrongdoing but I will need to disclose some confidential information in order to blow the whistle. If my employer sues me for breach of confidence, will they win?

Terms in your contract which try to prevent you from making a protected disclosure are void. This means that if you can demonstrate that you have made a protected disclosure (in relation to the confidential information in question) you will not have breached your obligations of confidentiality.

However, your employer may argue that your disclosure was not a protected disclosure and that you therefore breached their confidence. Before raising concerns, it is very important to check whether it is likely that you will actually be making a protected disclosure. Both the information you disclose and the way in which you disclose it are relevant. See our webpage on protected disclosures for more detail or, if in doubt, give one of our advisers a call.

Even if you cannot show that you have made a protected disclosure, if you disclose your employer’s confidential information in order to report suspected wrongdoing then you may be able to rely on a common law public interest defence (see above). If possible, you should obtain independent legal advice before making a disclosure in order to understand the chance that this defence will be available.

I am considering going to the media with my concerns, which would involve disclosing my employer’s confidential information. Is this a good idea?

There are only very limited occasions when speaking to the media will amount to a protected disclosure. Raising whistleblowing concerns with the media is what is called a wider disclosure and there are several legal conditions you need to meet in order for such a disclosure to be protected- see our section on Disclosure in Other Cases (including to the Media) for more detail.

If you speak to the media, disclose your employer’s confidential information and your disclosure is not a protected disclosure (which it may well not be), then you may face a breach of confidence claim from your employer. It is therefore best to avoid media disclosures if at all possible.

It is also worth remembering that if you speak to the media, you do not have control over what they do with your story and this could leave you open to potential backlash, or unwelcome media coverage. It not only might not achieve what you are hoping to achieve but it could make things worse. It should usually only be a last resort and after you have taken proper advice.

Need advice on this?

You can contact the Protect Advice Line for advice on breach of confidentiality and whistleblowing.

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