Judge gives reasons for gag on Northern Rock memo

Beleaguered bank Northern Rock has won a High Court injunction preventing publication of information in a Briefing Memorandum being distributed to potential investors, after more than ten pages of it were published on a Financial Times website.

Mr Justice Tugendhat has granted a temporary injunction restraining the FT, and any other media, from publishing ‘commercially sensitive’information about Northern Rock contained in the Briefing Memorandum. He granted the injunction, which will last until Tuesday 20 November, at a private hearing late on Tuesday 13 November, but has now given his written reasons in public.

The judge said: ‘The financial difficulties of the claimant, and the fact that the Bank of England has given guarantees to its depositors, are matters which are both widely known and of very great public interest. Since those difficulties have arisen, the claimant and many others have been actively concerned in attempting to resolve the crisis in its affairs.”

He said that advisers Merrill Lynch, Citibank and the Blackstone Group had prepared the Briefing Memorandum for distribution to financial institutions on confidential terms.

However, he said that on 8 November the Daily Telegraph printed an article setting out some information derived from the Briefing Memorandum.

Rather than pursue a court order at that time, he said that Northern Rock hired a PR firm to approach newspapers and ask them not to make any further publication from the document.

The details of how they went about it were, he said, ‘sketchy’and there was no information before him that the editors of the Financial Times were approached.

On 13 November, more than ten pages of the Briefing Memorandum were printed in full on part of the FT.com website called FT Alphaville. This led to brief further publication of information from the Memorandum by Dow Jones, the Evening Standard, the BBC, the Guardian website and the Reuters website.

This led Northern Rock to seek the emergency injunction against the FT and ‘persons unknown’ – effectively the whole world.

Giving his reasons for granting it, the judge said: ‘The case for saying that this commercial information is confidential seems to me to be a strong one.

‘There is no doubt that there can be a public interest in the publication of information which is the subject of a confidentiality agreement. But I can see no public interest in the publication at the present time of the unredacted and detailed commercial information which FT.com has published.”

He declined to grant an injunction seeking to restrain republication of extracts from the Memorandum published in the Daily Telegraph and, subsequently, other media, ruling: ‘I consider that the extent to which they have become available to the public is so great that an injunction would be futile.”

However, he continued: ‘Information from the Briefing Memorandum which has become available to the public only through the FT website seems to me to be in a different category. It is detailed financial information of a kind that the courts commonly recognise as commercially sensitive.

‘It seems to me arguable that there is a real possibility that further publication may do harm that has not already been done.”

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