FT's 'false market' case sheds light on PRO risks

Legal experts have warned of the dangers facing PROs after five

news sources, including the Financial Times, were ordered to reveal the

source of an article.



The case arose following the insertion by an unnamed individual of

inaccurate information into a document prepared for brewing giant

Interbrew, relating to the potential takeover of South African

Breweries.



The document was then leaked to the five defendants - The FT, The

Independent, The Guardian, The Times and Reuters - with the subsequent

articles resulting in a false market for Interbrew and SAB shares.



Interbrew sought an injunction against the news sources ordering them to

hand over the documents, revealing the identity of their source.



In a verdict delivered shortly before Christmas, Mr Justice Lightman

ruled in favour of Interbrew owing to the 'overriding public interest'

in revealing the source due to the source's criminality.



Weber Shandwick Legal MD Jon McLeod, who advised Interbrew during its

acquisition of Bass Breweries in 2001, warned that the judgement showed

that the judiciary would take a very harsh view of acts against the

public interest: 'No-one can presume that any scurrilous or even

unlawful action will be cloaked in the name of journalistic freedom,' he

said.



'No-one is saying that that it was a PR practitioner involved in this

case, however the lessons which can be learned for PROs are that PR is

not about pranks and anyone who thinks they might have any tricks for

their clients up their sleeves must be very careful. It is a salutary

judgement. People would do well to heed the outcome, as it will affect

how they will deal with journalists in the future.' he warned.



However, Cicero Consulting CEO and former lawyer Stephen Lock said that

the judgement was not cause for panic in the PR profession: 'The case

has a very narrow application - PR people doing their jobs honestly have

nothing to fear,' he said.



'The article protecting freedom of expression in the European Convention

on Human Rights is difficult to evade - you need an overriding public

interest to defeat it. Here it was specified that the courts will break

down the rules on protection of sources where the source committed a

criminal offence or when it is so seriously in the public interest,' he

added.



A spokesperson for the FT, which was the lead defendant in the case,

said: 'We are going to appeal this decision, and it will go to court on

28 January.'



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