Does the risk of damage to the business due to publishing information about negotiations for its purchase not outweigh the public's right to gossip? In a revolutionary ruling, the Supreme Court states that the public's right to know prevails over the right to privacy of a third party to the process. The writer believes that the applicability of the judgment should be limited to his specific circumstances.
About a month ago, the Supreme Court decided to cancel an order banning publication of details provided during closed-door hearings in the bribery and money laundering case (ref. 3934/11 Yedioth Ahronoth Ltd. v. Emanuel Arbiv, 18.10.11). The district court prohibited the publication of the details after the suspect's attorney stated during the hearing that the suspect is in negotiations to purchase a large investment house in Israel for hundreds of millions of shekels and disclosure would jeopardize the deal. From the decision of the Supreme Court it appears that due to a malfunction the confidential protocol was distributed to about 140 journalists. The Supreme Court accepted a request from journalists to cancel the publication ban and stated that sufficient weight was not given to the public interest in receiving information about the intention of a suspect in a crime to purchase an investment house, which is under the control of a public company. The Supreme Court even went so far as to state that it is difficult to say that we are dealing with a "trade secret", even in the context of a publication ban, since such a statement could "excessively limit the public's right to know and the freedom of the press. Especially so when it is an important investment house and not a marginal business And small, which has no importance from the point of view of the public."
The first question that arises from the judgment is the question of distributing judgments (and not only those behind closed doors) to dozens of journalists. How does the spokeswoman for the court system determine which judgments to distribute to journalists. For the sake of demonstration, when our office represented Mr. Eli Reifman in a bankruptcy proceeding several years ago, except in the Supreme Court proceeding where there was extreme care to deliver the decisions to the parties first, we received requests for a response from journalists before the decisions reached us. Is this the way to have a proper legal procedure? In the writer's opinion, the role of court spokespeople should be limited to returning answers to questions concerning the court system and not to distributing decisions to journalists.
The second question is whether the right to gossip outweighs the right of a company to conduct negotiations away from the public eye. Negotiations must be confidential. Without secrecy, there is a very high probability of its failure, and the securities rules also allow public companies to withhold a report on a transaction if "submitting it could prevent the completion of an operation by the corporation or a transaction to which the corporation is a party or has an interest in, or significantly impair its terms." Moreover, revealing that a company is for sale could be disastrous for the company. Suppliers may cut off credit lines, employees may fear for their workplace and defect (or conduct themselves in another way that would harm the company) and the business of a company known to be "on the market" may be severely damaged just because of the publicity. It is appropriate that the courts always observe the privacy of third parties to the proceedings (whose details or claims about them should appear in a judgment to which they were not a party), but certainly when it comes to a case where publication could cause them harm. The right to privacy should override the public's right to know, certainly when it comes to a third party to the process whose details are not relevant to the process. In the opinion of the writer, identifying details of the transaction and of the investment house are not relevant to the legal process (if the investment house was not a party) and there was no reason to publish them.