Why journalists sometimes have to defy bad law

On Saturday morning I was told that, as one of the directors of The Independent, I was in contempt of court in the Interbrew case. If we directors are all eventually sent to prison, I suppose that the Baronesses Jay and Kennedy will end up in Holloway and I, together with our chairman, Sir Anthony O'Reilly, the chief executive, Brendan Hopkins, and the Rt Hon Kenneth Clarke QC MP, like me a non-executive director, will be spread round the London jails with the rest of our colleagues. And the same message will have been delivered to the directors of the Financial Times, The Guardian, The Times and Reuters.

Quite suddenly then, a titanic battle is in the offing. It concerns documents acquired by the four newspapers and the news agency which purported to show that a large Belgian brewer, Interbrew, was about to make a take-over offer for South African Breweries. Interbrew, which owns the Whitbread and Bass businesses in this country, alleges that the documents were false and that they were given to the news organisations in the hope that publication would drive up the price of the target company and yield handsome profits to plotters who had bought the shares in anticipation.

As fraud, a form of stealing, is a criminal offence, one would expect the police to be involved, but I am not aware that they are investigating the case. The Financial Services Authority has, however, asserted its interest under the Financial Services and Markets Act, which prohibits the deliberate or reckless making of misleading, false or deceptive statements. However, the FSA unexpectedly abandoned its plans to send its own officials to accompany Interbrew lawyers when they did the round of newspaper offices on Friday to present a court order for the return of the documents.

In different ways, the four newspapers and Reuters, which all refused to hand over the incriminating material, made the same point. Protecting sources is a fundamental duty for newspapers and their reporters. As a policy it has the substantial public benefit that it protects whistle-blowers who, as the Enron and WorldCom scandals have most recently shown, play an essential role in exposing executive theft.

As always in these episodes, though, not everything is as clear-cut as it first appears. For instance, Interbrew already has copies of the leaked documents. Presumably it hasn't found them as revealing as it hoped and believes that a close examination of the originals may yield significant information. So is this what it all comes down to – the difference, if any, between photocopies and the original documents?

I accept that a similar argument can be made against the newspapers. Suppose the source of the documents is not, in this case, some virtuous whistle-blower but somebody engaged in a criminal act, rigging a market. Is this what your precious principles mean, newspapers can be asked, the protection of crooks? Or, as the Court of Appeal put it: "there is no public interest in dissemination of falsehood".

Under such questioning, however, both sides can safely retreat to some high ground. Interbrew is able to argue that it needs confirmation that the photocopies in its possession are faithful reproductions. And the news organisations can likewise say that no convincing evidence has yet been produced to show that the actual leaker of the documents had malign intent or a criminal motive.

Here indeed are some of the arguments which the British version of a Supreme Court, the judicial committee of the House of Lords, might have considered. But their lordships, in an odd decision, declined to hear an appeal. Even though there are strong forces on either side of this dispute, even though there are clashing principles, the law lords have decided to keep out of the way.

So instead the news organisations will take their case to the European Court of Human Rights. Meanwhile, as they wait for a hearing in Strasbourg, having refused to comply with a court order, they are in contempt of court – hence the phone call I received. As a consequence they can expect to be fined, or have their assets seized or their directors jailed.

It may be that a way out of this impasse will soon be found. Contempt cases of this nature have never been pushed very far by the authorities. In the 1960s two journalists spent a brief period in prison. In the circumstances, the protection of sources by newspapers has remained a virtually inviolate principle.

News organisations can be held to be in contempt of court in various ways. Publishing material that might prejudice the holding of a fair trial is an example. The Interbrew case is clearly quite different from this. Nonetheless, contempt cases all have this in common. They involve defying or undermining the rule of law. Thus to be on the other side of this argument, which has now happened to me twice in 40 years, is always the worst moment in a journalist's or a publisher's professional life. And that is why, if the protection of sources lands one in such a predicament, one has to take one's punishment without complaint. The damage to the system must be kept to the very minimum.

aws@globalnet.co.uk