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Companies Court Emphasises Open Justice Principle

In the context of unfair prejudice petitions in which allegations of wrongdoing were made against, inter alia, two members of the ruling family of a foreign state, the Companies Court has emphatically upheld the principle of open justice in dismissing applications that the proceedings should be heard in private. The court noted that although hearings in open court may be painful and humiliating to those involved, that will not normally be a proper basis for derogating from open justice.

The applicants had stressed the importance that the two royal princes attach to their reputations. It was argued that the allegations against them were groundless but that the prospect of an open court hearing could force an unjust settlement of the dispute. There was a real possibility that an early settlement of the case would result in media reporting of the allegations in the privileged context of open court without the princes having the opportunity to substantively reply or vindicate their reputations.

However, in dismissing the applications, Mr Justice Morgan said: “Derogation from open justice can be justified in exceptional circumstances where the derogation is strictly necessary to secure the proper administration of justice…there is no general exception to the open justice principle simply because privacy or confidentiality is in issue…the fact that a hearing in open court may be painful, humiliating and a deterrent either to a party or to a witness is not normally a proper basis for departing from the open justice principle. The interest protected by the open justice principle is the public interest in the administration of justice rather than the private welfare of those involved in court proceedings.”