Insight: Should the wealthy be a law unto themselves?

Sir Philip Green (L) with Harvey Weinstein. Picture: REX/Shutterstock

Some people might wonder if Sir Philip Green had any reputation left to defend. This, after all, is the man who took hundreds of millions from BHS, before selling it to a serial bankrupt for a pound and leaving it with a £571 million hole in its pension fund.

As the company collapsed and 11,000 people lost their jobs, the chairman of Arcadia Group – which includes Burton, Dorothy Perkins, Miss Selfridge and Topshop – was splashing his cash on luxury holidays or on his $100m yacht, Lionheart. This is the man who put his company in the name of his wife, Tina, who lives in Monaco, in order to cut his tax bill.

In Oliver Shah’s unauthorised biography, Damaged Goods – much of which Green disputes – the 66-year-old billionaire is presented as an intolerant bully prone to expletive-filled temper tantrums. His lavish parties – at which champagne flows and superstars perform – have seen him compared to Jay Gatsby. But it is impossible to imagine that suave, if amoral, bootlegger yelling: “You’re absolutely f*****g useless. I should throw you out of the window, but you’re so fat you’d probably bounce back in again!” as Shah claims Green once yelled at one of his employees.

In one interview from 2014, Green was described as “the archetypal Alpha male [who] calls me ‘hon’”. Of the #MeToo campaign, he is alleged to have asked: “Where’s this all going to end? There’s no stag parties, no hen parties, no more girls parading in the ring at the boxing.”

Yet, when the Telegraph threatened to run a story suggesting Green had used Non Disclosure Agreements (NDAs) to conceal sexual harassment, bullying and racist abuse – accusations he denies – he spent £500,000 (around a 40th of the cost of his 55th birthday party in the Maldives) to secure an injunction.

Why would he bother when he is already so poorly regarded and when, famously, injunctions tend to attract – rather than deflect – publicity? The answer might lie with Harvey Weinstein. The film producer, whose serial sexual assaults were the catalyst for #MeToo, used NDAs to silence some of his victims. The Telegraph’s story was already being billed as the UK’s next big #MeToo scandal. Such a scandal might well have lost Green his remaining friends. And he still has his knighthood to protect. When MPs threatened to strip him of it in the wake of the collapse of BHS, he paid £363m back into the pension fund; so it clearly means a lot to him.

In the end, however, the half a million he threw at stymieing the Telegraph was wasted (as it was always destined to be). The Court of Appeal granted an interim injunction pending a trial. But on Thursday afternoon, Labour peer Peter Hain used his parliamentary privilege to identify Green as the man at the centre of the story.

Lord Hain’s actions were motivated by a belief that Green was abusing his power and that the allegations ought to be in the public domain. But he appears to have ridden roughshod over a legal process which was still on-going and which would have explored the public interest argument. Eyebrows were further raised when it emerged Hain was an adviser to the legal firm Gordon Dadds which represented the Telegraph (though he denies knowing of their involvement when he decided to intervene).

This is far from the only legal and/or ethical conundrum raised by the events of the past few days. The Telegraph’s investigation has also renewed the debate on the use of NDAs. And it has intensified the debate over injunctions. Why should the super-wealthy be able to avoid scrutiny? And are injunctions even practical in an age of global communication?

In the story the Telegraph ran before Green’s identity had been revealed, it claimed NDAs – or gagging clauses – had been weaponised and were being used to cover up wrongdoing. In February, Zelda Perkins, a former assistant to Weinstein, broke the terms of an NDA she had signed to tell how – 20 years previously – the film producer had exposed himself to her and asked if he could watch her bathe.

The issue hit the headlines again earlier this month after a woman who claims she was raped by footballer Cristiano Ronaldo said she had been pressured into signing an NDA worth $375,000. Criminal charges were dropped due to lack of evidence. Lawyers for Ronaldo later admitted the existence of the NDA, but denied the rape allegation. The police in Las Vegas – where the alleged assault took place – have now reopened their investigation.

Yesterday, Emma Ritch, executive director of feminist organisation Engender, said there were two types of NDAs: those tucked into contracts in advance of employment and those used in the settlement of a sexual harassment case.

“The ones tucked into contracts are pre-emptive NDAs about anything that happens in your workplace and those have a real squelching effect on all sorts of disclosures, including sexual harassment,” she says.

“That’s why the Equality and Human Rights Commission [EHRC] recommendations on sexual harassment produced in December said: ‘scrap those – just get rid of them’, which I would agree with.

“The ones which come at the end of a negotiated process and settlement are also used to squelch disclosures. They can’t be used to stop someone reporting a crime, but it is questionable the extent to which workers understand that. They may not be able to properly assess whether or not their employer is going to come after them and that does create a chilling effect, particularly in the more serious instances.”

Jillian Merchant, employment lawyer with Thompsons, claims almost all settlements in sexual harassment cases involve a confidentiality clause.

“They are very widespread,” she says. “The vast majority of the women in these situations sign these agreements because they want to forget all about what happened and they don’t want it all over the media, or because the employer offers them more money than they would get at a tribunal.

“Some women want their day in court, but others would rather not. It’s easy for employers who have got the money so they can just say: ‘We will buy this off.’”

Merchant believes the answer is to ban NDAs in sexual harassment cases because, as things stand, the scale of the problem is being masked. “The fact employers can settle and keep it quiet gives them more power and stops them having to take any action against the alleged perpetrator. It also allows repeat offending to happen without any consequences.”

One negative consequence of outlawing NDAs, however, is that more women would have to fight their employers through tribunals, which would be traumatic for them.

Media lawyer David McKie of Levy and McRae believes an outright ban on NDAs in sexual harassment cases would make it more difficult to tailor settlements to a diverse range of situations.

“Every single case is different, often involving two if not more individuals who each have feelings and sensibilities, who are at different stages in their lives, who may think ‘Yes, I would like this to be kept confidential’ and then five years later might feel differently,” he says.

“It is absolutely not that I want to stop people from complaining to the police. But I think creating a hard and fast rule which prevents two people from contracting is a bad idea. It removes versatility and flexibility and I think both those features are important in law and in life.”

At the Appeal Court, the Telegraph argued that it had not signed any NDA and that there was a strong public interest in the information being published.

But the judges who granted the interim injunction said the High Court judge had failed to take into account the legitimate role NDAs played in the consensual settlement of disputes. Though there seems to have been an assumption that the Telegraph story was being propelled by the complainants, the ruling also pointed out that two of the five women who had signed the NDAs wanted them adhered to.

Still, doesn’t the Telegraph have a valid point? If a businessman has used NDAs on multiple occasions to settle sexual harassment cases, isn’t it important that potential future employees should be aware of this?

“I can absolutely see that argument,” says McKie. “It’s a perfectly legitimate argument and no doubt forcefully made by the Telegraph. There are arguments to be made too about disclosure and the importance of freedom of expression.

“But a court has to make difficult decisions balancing competing interests. The judges made reference to the rights of claimants – some of whom may not want the details in the public domain. What could happen if the details surrounding some of the claimants are publicised is that other employees might start saying: ‘Oh, I see that happened in head office: were you one of the women affected, Doris?’ Doris may not have wanted those details to come out, but now she has been effectively identified.

“The other thing is, if they have signed confidentiality agreements knowingly, with the benefit of legal advice and have accepted the money, part of that money is for agreeing not to speak, which I understand many people feel is morally wrong. However, it is the reality of many settlements in most forms of legal disputes.

“They may have thought: ‘Would I rather have £10,000 in my account but live with the fact I have to remain silent?’ We can all be idealistic, but everyone has to live, and the counter-argument is that they could have refused to agree to confidentiality and either renegotiate, or, if appropriate, sue. But suing involves publicity and that is why confidentiality is often attractive both to the victim and the offending or paying employer. It may have been an active decision taken with professional advice. Signing that contract has consequences – so on balance I can see precisely why the appeal court reached the conclusion it did.”

Injunctions are also regarded by many as an abuse of power and wealth. Green is the latest in a succession of celebrities who have large sums of money to stop allegations of their nefarious behaviour hitting the front pages.

Most notorious perhaps is the case of Ryan Giggs. In 2011, Giggs won a superinjunction after learning a tabloid newspaper intended to run a story on his affair with reality TV star Imogen Thomas. But the lawyers forgot the injunction didn’t cover Scotland and so he was named in the Sunday Herald and by 75,000 Twitter users. The following day, Liberal Democrat MP John Hemming – who had been campaigning against the use of injunctions – also named him in the House of Commons.

As a result of the injunction, Giggs’ infidelity received even more publicity than it would otherwise have done. Soon after, it emerged he had also been having a long-term affair with his brother’s wife. Months later, Jeremy Clarkson voluntarily lifted a “pointless” injunction on his alleged infidelity after details circulated online.

Even where injunctions are still in place, they are not particularly effective. I would wager most readers know the identity of the married actor who had an affair with escort Helen Wood even though I am not allowed to tell you. Ditto the identities of everyone involved in the extra-marital threesome in an olive-oil-filled children’s pool. This is because they were all named in US newspapers and on the internet.

Of course, the difference between the injunctions taken out by Giggs, Clarkson et al is that they were attempts to cover up consensual affairs, whereas the allegations against Green involve the harassment of multiple women. Green’s injunction was granted not on the grounds of privacy, but on the grounds of the NDAs.

Writing in the Telegraph, Geoffrey Robertson QC claimed the Court of Appeal decision was inevitable. “Commercial lawyers who later become judges may have an instinctive preference for freedom of contract over freedom of speech, as if asked to balance hard cash against hot air,” he said.

There is an irony in both Labour and the Conservatives expressing such concern over this case. It was Tony Blair who gave Green his knighthood and David Cameron who asked him to review public sector efficiency. Some cynics might also suspect that the government’s sudden preoccupation with NDAs is a useful deflection away from its own bullying and harassment problem, which has yet to be properly addressed.

But NDAs embolden perpetrators and encourage repeat offending; and clearly some women do feel pressurised into signing them. Last week on BBC Question Time, SNP MP Hannah Bardell claimed she had once signed one because she feared losing her job.

So Women and Equalities Select Committee chair, Maria Miller MP, was justified in calling for a review of their use and legality, following the committee’s report on sexual harassment in the workplace in March. And Theresa May was right to commit to bringing forward the government’s consultation “to seek to improve the regulation around non-disclosure agreements and make it absolutely explicit to employees when a non-disclosure agreement does not apply and when it cannot be enforced”.

Whether Hain was right to invoke parliamentary privilege to name Green is a bone of contention. Several legal experts – including Glasgow University law professor James Chalmers – believe it was wrong to do so while the legal proceedings were still ongoing. Former Attorney General Dominic Grieve told BBC Radio 4: “We can’t operate a democratic free society when peers or MPs decide to take the law into their own hands.”

As for Green, he is now at the centre of a hate-fest. Every negative story ever written about him has resurfaced; every anecdote about his sweary brashness has been retold. For the moment he still has his suite at the Dorchester, his yacht, a few loyal friends and his knighthood to console him. How long that will last is anyone’s guess.