CEDH · CASELAW;REPORTS;ENG — 7 avril 1993

.sDD6737AE { font-size:11pt } .s211D6B00 { margin-top:0pt; margin-bottom:0pt; line-height:normal; widows:0; orphans:0; font-size:8.5pt } .sBB9EE52A { font-family:Arial }                        EUROPEAN COMMISSION OF HUMAN RIGHTS                          Application No. 17101/90                         Mohamed Al Fayed, Ali Fayed                             and Salah Fayed                                   against                             the United Kingdom                          REPORT OF THE COMMISSION                          (adopted on 7 April 1993)   TABLE OF CONTENTS                                                                    Page   I.     INTRODUCTION       (paras. 1-15) . . . . . . . . . . . . . . . . . . . . . . . 1-3         A.    The Application            (paras. 2-4) . . . . . . . . . . . . . . . . . . . . . . 1         B.    The Proceedings            (paras. 5-10). . . . . . . . . . . . . . . . . . . . . 1-2         C.    The Present Report            (paras. 11-15) . . . . . . . . . . . . . . . . . . . . 2-3   II.    ESTABLISHMENT OF THE FACTS       (paras. 16-58). . . . . . . . . . . . . . . . . . . . . . .4-17         A.    The particular circumstances of the case            (paras. 16-42) . . . . . . . . . . . . . . . . . . . .4-13         B.    The relevant domestic law and practice            (paras. 43-58) . . . . . . . . . . . . . . . . . . . 13-17   III.   OPINION OF THE COMMISSION       (paras. 59-89). . . . . . . . . . . . . . . . . . . . . . 18-25         A.    Complaints declared admissible            (para. 59) . . . . . . . . . . . . . . . . . . . . . . .18         B.    Points at issue            (para. 60) . . . . . . . . . . . . . . . . . . . . . . .18         C.    As regards Article 6 para. 1 of the Convention            (paras. 61-81) . . . . . . . . . . . . . . . . . . . 18-24              a)     Proceedings before the Inspectors                  (paras. 62-64) . . . . . . . . . . . . . . . . . .19                    CONCLUSION                  (para. 65) . . . . . . . . . . . . . . . . . . . .19              b)     Proceedings against the Inspectors                  and the Secretary of State                  (paras. 66-76) . . . . . . . . . . . . . . . . 20-23                    CONCLUSION                  (para. 77) . . . . . . . . . . . . . . . . . . . .23              c)     Proceedings against others                  (paras. 78-80) . . . . . . . . . . . . . . . . 23-24                    CONCLUSION                  (para. 81) . . . . . . . . . . . . . . . . . . . .24         D.    As regards Article 13 of the Convention            (paras. 82-84) . . . . . . . . . . . . . . . . . . . . .24              CONCLUSION            (para. 85) . . . . . . . . . . . . . . . . . . . . . . .24         E.    RECAPITULATION            (para. 86-89). . . . . . . . . . . . . . . . . . . . . .25   PARTIALLY DISSENTING OPINION OF MR. C.L. ROZAKIS. . . . . . . . 26-27 JOINED BY MR. S. TRECHSEL   CONCURRING OPINION OF MRS. J. LIDDY . . . . . . . . . . . . . . . .28   DISSENTING OPINION OF MR. B. MARXER . . . . . . . . . . . . . . 29-30   APPENDIX I        : HISTORY OF PROCEEDINGS . . . . . . . . . . . 31-32   APPENDIX II       : DECISION ON ADMISSIBILITY                    OF THE APPLICATION . . . . . . . . . . . . . 33-54   I.     INTRODUCTION   1.     The following is an outline of the case, as submitted to the European Commission of Human Rights, and of the procedure before the Commission.   A.     The Application   2.     The applicants are Egyptian citizens, born in 1933, 1943 and 1939 respectively.   They are brothers and businessmen.   They were represented before the Commission by Messrs. Herbert Smith, Solicitors, London.   3.     The application is directed against the United Kingdom.   The respondent Government were represented by their Agent, Mrs. A. Glover, of the Foreign and Commonwealth Office.   4.     The case concerns the making and publication of a report in March 1990 by Inspectors, appointed by the Secretary of State for Trade and Industry, about the applicants' takeover, through their company the House of Fraser Holdings PLC, of the House of Fraser PLC (which includes Harrods store) in March 1985.   The report made certain criticisms of the applicants.   They complained that the report determined their civil right to honour and reputation and denied them effective access to court in the determination of this civil right, contrary to Article 6 para. 1 of the Convention.   They also complained of a denial of effective domestic remedies to challenge the findings of the Inspectors, contrary to both Article 6 para. 1 and Article 13 of the Convention.   (Other complaints originally made by the applicants and their company, the House of Fraser Holdings PLC, were declared inadmissible by the Commission on 15 May 1992 ; see Appendix II to this Report.)   B.     The Proceedings   5.     The application was introduced on 30 August 1990 and registered on the same day.   6.     After a preliminary examination of the case by the Rapporteur, the Commission considered the admissibility of the application on 7 December 1990.   It decided, pursuant to Rule 48 para. 2 (b) of the Rules of Procedure, to give notice of the application to the respondent Government and to invite the parties to submit written observations on its admissibility and merits.   The Government's observations were submitted on 10 June 1991 after three extensions of the time-limit fixed for this purpose.   The applicants replied on 15 November 1991 after two extensions of the time-limit.   7.     On 20 February 1992 the Commission decided to hold a hearing of the parties on the question whether Article 6 para. 1 (civil) of the Convention had been violated.   The hearing was held on 15 May 1992. The applicants were represented by Mr. A. Lester, QC, Counsel, Mr. P. Goulding, Counsel, Ms. L. Hutchinson, Solicitor, Messrs. Herbert Smith, and Mr. D. Marvin, Attorney, Washington DC.   The Government were represented by their Agent, Mrs. A. Glover, Mr. M. Baker, QC, Counsel, Mr. J. Eadie, Counsel, Mrs. T. Dunstan, Mr. M. Osborne and Mr. J. Moore, all three of whom were from the Department of Trade and Industry.   8.     Following deliberations on the same day, the Commission declared admissible the applicants' complaint under Article 6 para. 1 (civil) of the Convention, both on its own and in relation to Article 13 of the Convention.   It declared inadmissible the remainder of the application (para. 4 above).   9.     The text of the Commission's decision on admissibility was sent to the parties on 26 May 1992 and they were invited to submit such further information or observations on the merits as they wished. After an extension of the time-limit, the Government submitted observations on 30 July 1992, to which the applicants replied on 4 September 1992.   On their own initiative the Government submitted more observations on the merits on 7 December 1992, to which the applicants replied on 4 February 1993.   10.    After declaring the case admissible, the Commission, acting in accordance with Article 28 para. 1 (b) of the Convention, also placed itself at the disposal of the parties with a view to securing a friendly settlement.   In the light of the parties' reaction, the Commission now finds that there is no basis on which such a settlement can be effected.   C.     The Present Report   11.    The present Report has been drawn up by the Commission in pursuance of Article 31 para. 1 of the Convention and after deliberations and votes in plenary session, the following members being present:         MM.   C.A. NØRGAARD, Président            S. TRECHSEL            E. BUSUTTIL            J.C. SOYER            H.G. SCHERMERS            H. DANELIUS       Mrs. G.H. THUNE       Sir   Basil HALL       Mr.   C.L. ROZAKIS       Mrs. J. LIDDY       MM.   J.C. GEUS            M.P. PELLONPÄÄ            B. MARXER   12.    The text of this Report was adopted on 7 April 1993 and is now transmitted to the Committee of Ministers of the Council of Europe, in accordance with Article 31 para. 2 of the Convention.   13.    The purpose of the Report, pursuant to Article 31 of the Convention, is:         i)    to establish the facts, and         ii)   to state an opinion as to whether the facts found disclose            a breach by the State concerned of its obligations under            the Convention.   14.    A schedule setting out the history of the proceedings before the Commission is attached hereto as Appendix I and the Commission's decision on the admissibility of the application as Appendix II.   15.    The full text of the parties' submissions, together with the documents lodged as exhibits, are held in the archives of the Commission.   II.    ESTABLISHMENT OF THE FACTS         A.    The particular circumstances of the case   16.    The application arises out of an investigation into the affairs of the applicants' company, the House of Fraser Holdings PLC (HOFH), by Inspectors appointed by the Secretary of State for Trade and Industry, pursuant to section 432 (2) of the Companies Act 1985, and the publication of the Inspectors' report in its entirety by the respondent Government.   17.    In March 1985, the applicants acquired ownership of the House of Fraser PLC (HOF).   HOF was then and is now one of the largest groups of department stores in Europe and includes one particularly well-known London store, Harrods.   The applicants acquired ownership of HOF through HOFH, which at all material times was owned by the brothers. HOFH had previously been known as the Al Fayed Investment Trust (UK) Limited and assumed its present name in December 1985.   18.    Prior to the HOF takeover, in or about early November 1984, on professional advice, the applicants appointed Broad Street Associates to act as their public relations advisers and, with their assistance, the brothers and their advisers led the press to receive and present a positive picture of their origins, wealth, business interests and resources.   Upon the basis of this picture, which they had a part in painting, they enjoyed, for a time, an esteem or reputation which was highly valuable to them.   Between 2 and 10 November 1984 the first applicant gave separate interviews to The Observer, The Sunday Telegraph and The Daily Mail.   The applicants' public relations consultants played a part in making the arrangements.   A further interview involving the brothers, arranged by the consultants, took place on 10 March 1985.   In these interviews the brothers described a wealthy, distinguished and established family background.   They gave a similar picture to Mr. MacArthur of their merchant bankers Kleinwort Benson.   Mr. MacArthur accepted it and, acting on their behalf, conveyed that picture by a press release in November 1984 and in a television interview in early March 1985.   There were other press interviews about the family background for which the applicants were responsible.   They thus took active steps to promote their own reputations in the public domain.   The acceptance of the brothers by the City of London and by the Government was later considered to be crucial to an understanding of the events surrounding their takeover of HOF.   19.    The takeover was vigorously but unsuccessfully opposed by Lonrho PLC (Lonrho) and, in particular, its Chief Executive, Mr. Rowland, a former business associate, turned rival, of the applicants.   In 1984 Lonrho had sold its near 30 % share in HOF to the applicants, but when those directors representing Lonrho's interests were obliged to resign from HOF's Board and the applicants bid to take over HOF completely, relations between Lonrho and the applicants deteriorated.   Lonrho proceeded to launch an acrimonious campaign against the applicants.   In opposing the applicants' bid for HOF, Lonrho had made submissions to Ministers concerning unfair competition and the undesirability of HOF falling into foreign hands.   It was alleged that the applicants were fraudulently claiming that the funds for the acquisition were theirs personally.   Lonrho alleged that the brothers were lying about their money and themselves and that they should not be permitted to acquire HOF without a thorough inquiry. However, the applicants' bid was cleared and accepted, but Lonrho campaigned on through the media and other publications, and in particular through its newspaper, The Observer.   The applicants instituted three libel actions against The Observer in 1985 and 1986 for articles written about them.   In March 1987 Lonrho commenced legal proceedings against the applicants and their bankers alleging wrongful interference with Lonrho's business, and conspiracy and negligence in connection with HOFH's acquisition of HOF.   In particular, it was alleged that the applicants, by false statements about their financial capacity to acquire the share capital and develop HOF's business, had persuaded HOF's Board of Directors to accept their bid and had convinced the Secretary of State not to refer their bid to the Monopolies and Mergers Commission (MMC).   Thereby it was claimed that the applicants had tortiously interfered with Lonrho's right to bid for the shares or, alternatively, they had conspired against Lonrho.   These proceedings are still pending.   Lonrho was refused leave to apply for judicial review of the Secretary of State's refusal to refer the applicants' acquisition of HOF to the MMC.   20.    After two years of powerful and unrelenting pressure by Lonrho upon the United Kingdom Government, on 9 April 1987, the Secretary of State for Trade and Industry appointed two Inspectors to investigate the affairs of HOFH and, in particular, the circumstances surrounding the acquisition of shares in HOF in 1984 and 1985.   The appointment of the Inspectors was made by the Secretary of State under section 432 (2) of the Companies Act 1985 (the 1985 Act).   21.    The Inspectors stated that their investigation was an unusual one and that in order to establish what had occurred during the takeover they had been obliged to make findings on contested issues of fact.   22.    The principal questions which they addressed when investigating the affairs of HOFH were as follows:         "(i)        Were the Fayeds who they said they were, and if not                  who were they?         (ii)        Did they acquire HOF with their own unencumbered                  funds?         (iii)       Did they deliberately mislead, whether directly                  or indirectly, those who represented them to the                  authorities and the public?         (iv)        If so, did they seek to frustrate those who tried                  to establish the true facts, and if so how?         (v)         What steps did the Board of HOF and its advisers                  and the Fayeds' financial and legal advisers take                  before they gave the comfort that they appeared                  to give to those who relied on their words or                  actions?         (vi)        Were the authorities - the officials of the OFT                  (Office of Fair Trading) and the DTI (Department                  of Trade and Industry) and, eventually, Ministers -                  or the public misled about the Fayeds?   If so,                  how and why?"         (The Inspectors' report, para. 1.11).   23.    The Inspectors also stated that, throughout their investigation, they were not concerned solely with simple questions relating to the direct control of the purchase money which was used to buy HOF.   They were concerned about the statements which the applicants made, or which they allowed others to make on their behalf, which had the effect of influencing people to act favourably towards them.   24.    During the course of the investigation, the Inspectors identified matters upon which they wished to receive evidence.   If any uncertainty or issue arose in relation to the provision of such evidence, these were discussed in the course of meetings or through correspondence between the Inspectors' staff and the applicants' solicitors. Thereafter, information was provided to the Inspectors by way of memoranda, together with copy documentation.   In addition, the Inspectors received oral evidence by interviewing witnesses.   They interviewed Mohamed and Ali Fayed on 14 October 1987 and again on 8 and 9 March 1988.   All proceedings were conducted in private.   There was no opportunity for the applicants to confront or to cross-examine witnesses, it being well-established as a matter of English law that the Inspectors were not obliged to afford such an opportunity to anyone.   25.    It was agreed between the Inspectors and the applicants that, having assimilated the factual information supplied, the Inspectors would notify the applicants of the provisional conclusions they had reached and the material upon which they had relied in reaching such conclusions.   The Inspectors would then consider such submissions as the applicants might make in respect of these conclusions.   26.    Respect for personal privacy was a matter of particular concern to the applicants.   It was not in dispute that they had occupied a position as trusted and confidential advisers to Heads of State.   This fact made respect for the privacy of their affairs especially important.   They claimed that loss of confidence in their ability to maintain privacy would put in jeopardy their relationships, as businessmen and confidential advisers, with Heads of State and other important and influential individuals.   27.    The Inspectors' approach to matters of privacy and confidentiality is summed up at paragraphs 26.44 - 26.45 of their subsequent report as follows:         "We were aware of the Fayeds' concerns about privacy.       However, if private people incorporate a company, in       which they become directors, and which makes public       representations about their affairs, Inspectors who       are appointed to investigate the truth of those       representations must balance their concern to preserve       the directors' privacy as far as practicable (in       Chapter 12 for instance we have deliberately refrained       from making detailed findings in respect of many of       the Fayeds' private companies whose accounts we have       seen) against their duty to do the job which they       were appointed to perform.         If the Fayeds had chosen to say nothing this might       have created evidential difficulties for us.   But       because they wished us to make findings in their       favour they brought witnesses to see us ...       and gave us evidence about their private affairs       which it was then our duty to test."   28.    At the start of the investigation the applicants expressly accepted that the Inspectors were entitled to inquire into the accuracy of statements which had been made by them or on their behalf.   These were the statements at the heart of the inquiry.   Only at the very end of the inquiry did they alter that stance and challenge the Inspectors' entitlement to inquire into certain aspects of their private life.   The Inspectors rejected the challenge and gave their reasons for so doing. The Inspectors were entitled to seek confidential information from third parties, but before doing so they gave the applicants an opportunity to satisfy them as to the accuracy of the statements "in whatever manner was least obtrusive to their privacy" (report paras. 16.2.5 and 16.6.2).   The law did not permit them to compel the applicants to produce personal bank statements (which would have gone far to confirm or refute the accuracy of the statements) nor, save to a very limited extent, did the applicants consent to such production. The Inspectors considered that the applicants were in breach of their duty to give all the assistance which they were reasonably required to give.   The Government stated that the Inspectors were entitled to certify to a court that the applicants were refusing to answer questions, produce documents or to give such assistance as they required (section 436 of the 1985 Act).   The court could then have taken steps to sanction the applicants if, after hearing evidence, it was satisfied that they were in breach of their duty.   The Inspectors, however, were of the opinion that they could complete their task without the need to resort to such a serious measure and chose to pursue the matter without making such a certificate.   29.    In October 1987 and thereafter Lonrho publicly criticised the conduct of the investigation by the Inspectors and sought an additional two month period in which to assemble and submit evidence to them. Through its lawyers, Lonrho submitted that the rules of natural justice required the Inspectors to allow Lonrho access to the information the Inspectors had received from the applicants because Lonrho's commercial reputation would suffer if the Inspectors dismissed the complaints which it had made so publicly.   The Inspectors dismissed Lonrho's application for access to the applicants' evidence, but permitted Lonrho to have a longer period in which to adduce evidence to them, relating primarily to the personal background of the applicants and their family.   The applicants' solicitors protested to the Inspectors vigorously about this decision.   The Inspectors accepted that Lonrho and its directors had pursued their ends in a remarkably single-minded manner.   30.    The Inspectors' provisional conclusions were made available to the applicants on 12 April 1988 and, after much correspondence, it was agreed that the applicants could make final submissions to the Inspectors by 15 July 1988.   On 23 July 1988, the Inspectors delivered their report to the Secretary of State.   The Inspectors concluded that the applicants had dishonestly misrepresented their origins, their wealth, their business interests and their resources to the Secretary of State, the OFT, the Press, the HOF Board and HOF shareholders and their own advisers; that during the course of their investigations, the Inspectors had received evidence from the applicants, under solemn affirmation and in written memoranda, which was false and which the applicants knew to be false; in addition, that the applicants had produced a set of documents they knew to be false; that this evidence related mainly, but not exclusively, to their background, their past business activities and the way in which they came to be in control of enormous funds in the Autumn of 1984 and the Spring of 1985.   The Inspectors were satisfied that the main thrust of Lonrho's attack on the applicants was well founded on a sound basis of substantiated fact (report para. 1.20).   However, the Inspectors did not reject the entirety of the applicants' evidence and praised part of their work. Thus the report included, for example, findings that "... the departure of the Lonrho directors and their replacement by the Fayeds brought harmony to a board where previously discord had existed" (report para. 6.6.9); and that "the Fayeds' considerable ability to identify assets with a potential for capital appreciation has undoubtedly been an important element in their business success" (report para. 12.6.10). In relation to the valuation of the applicants' banking interests, the Inspectors rejected the evidence of an Observer journalist and accepted the figure which they advanced.   In the final chapter of the report the Inspectors made complimentary findings of fact and expressed favourable opinions about HOFH.   In the concluding paragraph the Inspectors made it clear that their concerns "have been principally centred on the specific matters we were appointed to investigate, and not on anything which has occurred since March 1985".   They regarded the management of HOF since its acquisition as, subject to certain reservations, "law- abiding, proper and regular".   31.    The Secretary of State passed the report to the Director of Public Prosecutions (the DPP) and the Director of the Serious Fraud Office (the SFO).   On 29 September 1988, the Department of Trade and Industry (DTI) issued a press release stating that publication of the report would be delayed until the SFO had completed its investigations. After consideration of the report and the accompanying evidence, the Director of the SFO and the DPP jointly referred the matter to the Metropolitan Police on 24 November 1988 and asked for necessary inquiries to be carried out.   In the summer of 1988, the Secretary of State also sent copies of the report to the Bank of England, the Takeover Panel, the Inland Revenue, the OFT and the MMC.   32.    In early November 1988, Lonrho sought judicial review of the Director General of Fair Trading's failure to advise the Secretary of State with regard to a possible referral to the MMC.   This application was withdrawn when the Director General subsequently tendered his advice to the Secretary of State.   On 9 November 1988, the Secretary of State announced that, consistent with the advice of the Director General of Fair Trading, he had decided against the referral of HOFH's acquisition of HOF to the MMC, even though the report did disclose new material facts.   Also in November 1988, Lonrho made an unsuccessful application for judicial review of the Secretary of State's decisions (i) not to publish the report immediately and (ii) not to refer the acquisition to the MMC in the light of the report.   On 30 March 1989, the day of Lonrho's Annual General Meeting, The Observer newspaper published a 16 page special midweek edition devoted solely to extracts from and comments on a leaked copy of the report.   On the same day, Lonrho posted between 2,000 and 3,000 copies of the special edition to persons named on a mailing list to whom Lonrho had been regularly sending propaganda literature hostile to the applicants.   The High Court immediately granted injunctions, on the applications of the Secretary of State and HOFH, restraining any further disclosure of the report or its contents.   On 10 April 1989, before Lonrho's appeal in its unsuccessful judicial review application was before the House of Lords, Lord Keith of Kinkel raised the question whether the publication of the special edition and its posting to, inter alia, four members of the House of Lords who were due to hear Lonrho's appeal was a contempt of court by Lonrho, Mr. Rowland or the editor of The Observer. Subsequently, the House of Lords held (<1989> 3 WLR 535) that the publication of the special edition did not in the circumstances create any risk that the course of justice in the appellate proceedings challenging the lawfulness of the Secretary of State's decision to defer the publication of the report would be impeded or prejudiced, and they dismissed the contempt proceedings.   33.    During the course of an interview broadcast on BBC Radio 4's news programme, Today, on 4 April 1989, the Secretary of State stated, prior to its publication, that the Inspectors' report "clearly disclosed wrongdoing".   This gave rise to substantial press reports.   34.    On 1 March 1990, the Director of the SFO and the DPP announced that their inquiries into the matter were complete and that they would not be taking further action.   They had carefully considered the report and the accompanying evidence.   In a joint statement issued on that date they said:         "The directors are now satisfied that all lines of inquiry       have been pursued and that the evidence available is       insufficient to afford a realistic prospect of conviction       for any criminal offence relating to any matter of       substance raised in the report."   35.    The Attorney General expressed himself satisfied that the conclusion reached by the two directors was the correct one on the basis of the admissible and available evidence.   On 12 March 1990, he stated to the House of Commons, in reply to a question (Hansard, House of Commons, 12 March 1990, column 14):         "Whereas it was open to the Inspectors to take account       of hearsay evidence if they thought that it was reliable       - and of course it was open to them to reach the       conclusion that they did - it would not have been open       to a jury in a criminal case to convict upon evidence       of the same character.   The Inspectors are entitled to take       account of evidence covering a wider scope than that       available in criminal proceedings in an English court ...       ... Inquiries were pursued in every part of the world       indicated by the Inspectors' report, but the <Director       of the SFO and the DPP> had to conclude, as they said       in their joint statement issued on 1 March, that there       was insufficient evidence available for use in an English       court in English criminal proceedings on any matter of       substance raised in the Inspectors' report to warrant       the bringing of criminal proceedings."   36.    On 1 March 1990, the Secretary of State had announced his intention to publish the report on 7 March 1990.   It is general policy to publish reports on public companies.   (HOFH is a public company.) In this particular case the Government considered that there were specific grounds of general public interest justifying publication. They described these grounds as follows:         "There had been a complex and lengthy investigation, and the       public were entitled to learn the result of that investigation       unless there were compelling reasons why they should not.   There       were important lessons to be learnt by those involved in       takeovers from studying the report.   These were categorised under       six headings as:   (1) the demarcation of responsibility between       the merchant bank and the solicitor,   (2) knowledge of one's       client,   (3) appropriate procedures for advisers in relation to       taking on clients, taking up references, accepting and verifying       material from other advisers, and accepting instructions from       clients,   (4) relationships with the media,   (5) relationships       with the regulatory authorities, and (6) loopholes in the City       Code on Takeovers and Mergers.   The report contained a       recommendation that certain features of part XIV of the 1985       Act (which deals with the investigation of companies and their       affairs) deserved to be reconsidered in the light of difficulties       encountered by the Inspectors (report para. 1.25).   (Changes were       later incorporated in the Companies Act 1989.)   It was       appropriate to acknowledge that the Secretary of State, the OFT,       the DTI, certain journalists and sections of the press, the Board       of HOF, the regulatory authorities, and the applicants'       professional advisers had been misled by the applicants.   Lonrho       considered that its interests and reputation had been seriously       and adversely affected by the preparedness of the Secretary of       State to allow the HOFH bid to go forward in March 1985 without       a reference to the MMC.   Lonrho would have had a legitimate       grievance if the explanation for this was suppressed without       compelling reasons.   There was a need to dispel continuing       speculation as to the events which had given rise to the       investigation.   Rumours and speculation were rife.   Publication       of the report would provide employees and creditors with       information concerning the way in which HOF and Harrods had been       run and might be expected to be run in future.   (The Inspectors       were largely prepared to accept the sincerity of the brothers'       assurances for the future.)   The brothers had been prepared       before the Inspectors to attempt to discredit Lonrho,       Mr. Rowland, The Observer, its editor and others.   It was deemed       to be in the public interest to publicise both the fact that       these attempts had been made and the conclusion of the Inspectors       that they were ill-founded."   37.    On 2 March 1990, the applicants were provided with pre-publication copies of the report in confidence, in order to enable them to consider their position.   Throughout the period from 26 July 1988 to 7 March 1990 the possibility of applying for judicial review to prevent publication was kept under review by the applicants and their advisers, but the unanimous view at all stages was that such proceedings were almost inevitably bound to fail and, accordingly, they were not commenced.   38.    On 7 March 1990, the Secretary of State for Trade and Industry stated to the House of Commons (Hansard, House of Commons, 7 March 1990, column 873):         "I should explain to the House that in this matter I have       three main responsibilities as Secretary of State: first,       to decide whether to publish the report.   This I have now done       as soon as possible after I was informed by the prosecution       authorities that they had withdrawn their objection to       publication.   Second, I had to consider whether to apply to       the court to disqualify any director under section 8 of the       Company Directors Disqualification Act 1986.   I have concluded       that it would not be in the public interest to do so.       Anyone who reads the report can decide for themselves       what they think of the conduct of those involved.       Third, I also have responsibility for decisions on       whether to refer mergers to the Monopolies and Mergers       Commission.   That responsibility was fully discharged       by my predecessor.   He had six months from July 1988 in       which to consider the findings of the Inspectors' report       and to decide whether to refer the matter.   He concluded       in November 1988 that a reference to the MMC would not       be appropriate ...       No other matters require action from me.   I have passed       the report to all those authorities concerned with       enforcement and regulation so that they may consider       whether to take action under their various powers."   39.    The Secretary of State considered that the publication of the report and the ensuing publicity would enable people who might have dealings with the applicants in their capacity as directors to judge whether their interests were likely to be at risk from the type of conduct described in the report.   The Secretary of State also publicly expressed his own view that the Inspectors' findings were correct.   He stated (Select Committee Report, Annex 6, page 183, paras. 938, 939, 940A):         "... the allegations in the report have not been substantiated       in a court of law.   We can all take our view about them and       I think that the balance of probability is extremely strong       that they are accurate, but there is no proof of this.       ...       I am not required to say that every fact and opinion in the       report is true.   These were outside Inspectors who were       appointed to look into these matters, and they published       their report.   I have no means of checking it word for       word.   I myself and I think most people are inclined to       believe that the events revealed are correct, but we have       no proof - that is all I am saying.       ...         <Question:>   It appears that <the applicants> even told       a succession of lies to the Inspectors themselves, who       were then investigating the lies they had already told.       Is that right?       <Secretary of State:>   It so appears."   40.    On the day of the publication the applicants issued a press communiqué through HOFH commenting on, inter alia, the contents of the report and the conduct of the Inspectors.   Part of this press release read as follows:         "The Inspectors misled us.         They misled our lawyers.   Indeed they were not even honest with       them.         They demonstrated prejudice towards us and they did not treat us       even-handedly.         They reneged on their agreements with us.         They have employed language which has no place in such a       document.         They had reached conclusions which they do not support with       facts.         They have dishonoured themselves and the whole procedure of       Department of Trade inquiries.         These Inspectors went far beyond their legal powers, enquiring       into matters that were no legitimate concern of them.         They completely disregarded the principles of natural justice.       In simple terms they did not give us a fair hearing."   41.    On 28 March 1990, in the course of a debate in the House of Lords, the Minister of State for Trade and Industry stated (Hansard, House of Lords, 28 March 1990, columns 946-7):         "Although the Inspectors concluded that the Fayeds lied       to the competition authorities at the time of the merger       - I have no reason to believe that they were wrong, but       it is for individuals to make up their own minds once       they have read the report - the Inspectors did not       criticise the Fayeds for the way they were running the       House of Fraser which they already owned and which       cannot be taken away from them.   In these circumstances,       <the Secretary of State> considered that publication       of the report, which would allow people to judge for       themselves whether they wished to do business with       the Fayeds, would be a severe blow to their reputation,       as indeed I think it has proved."   42.    The report and its findings were widely reported on television, radio and in the national press.   The applicants claimed that it very seriously damaged their personal and commercial reputations as the Minister had predicted.   They also felt compelled to abandon their libel actions against The Observer newspaper and paid the latter's £500,000 legal costs.   One month after the publication of the report the Bank of England served notice of restrictions on Harrods Bank Ltd in relation to the applicants' positions within that company.   A Parliamentary Select Committee considered that the Secretary of State had not taken sufficient action against the applicants.   Lonrho persisted with its attacks.   In May 1990 it applied for judicial review of the Secretary of State's refusal to apply to the High Court for an order disqualifying the first three applicants as directors.   This application was dismissed on 21 October 1991.         B.    The relevant domestic law and practice         The scope of a section 432 (2) investigation   43.    The investigation of HOFH was conducted under section 432 (2) of the Companies Act 1985 in relation to the circumstances surrounding t