Proposal 11–8 The new Act should provide that courts may award damages assessed on the basis of a notional licence fee in respect of the defendant’s conduct, in an action for serious invasion of privacy.
11.54 Damages assessed on the basis of a notional licence fee would require the defendant to pay to the plaintiff any sum that the plaintiff would have received if the defendant had asked prior permission to carry out the activity that invaded the plaintiff’s privacy. An assessment of damages calculated on the basis of a notional licence fee is a remedy which seeks to target the value to the defendant of deliberately invading the plaintiff’s privacy.
11.55 The possibility of an assessment of damages on the basis of a notional licence fee was discussed by Hodgson J in LJP Investments Pty Ltd v Howard Chia Pty Ltd, a case involving trespass to land by the erection of scaffolding into the plaintiff’s airspace:
[I]n my view, if what is used has peculiar value for a defendant, then damages under this head should reflect that value, rather than the general market value. For example, if a plaintiff is the last tenant in a development site, and is forcibly ejected and the building immediately demolished; and if the defendant acted on incorrect legal advice that he was entitled to do this, so that he may be able to escape exemplary damages; then I think the plaintiff’s damages should not be limited to the general market value of the plaintiff’s tenancy, but should reflect he price which the plaintiff and defendant would reasonably have negotiated, having regard to the plaintiff’s position and the defendant’s wish to develop the site.
11.56 Damages assessed on the basis of notional licence fees have been considered by courts in the UK. In Irvine v Talksport a radio station used the image of a well-known racing driver in its publicity material, without the driver’s knowledge or agreement. The court granted the driver damages equal to the driver’s minimum endorsement fee at the time the image was used. In Douglas v Hello!(No 3) the UK Court of Appeal recognised the availability of a hypothetical-fee award in situations where a plaintiff had permitted to the invasive act in question but had not been compensated for the use of their image.
11.57 The assessment of damages based on the calculation of a notional licence fee is consistent with the fault requirement of the statutory cause of action proposed in this Discussion Paper—confined to intentional acts—as a notional licence fee would target defendants who had deliberately set out to enrich themselves or save expense by invading an individual’s privacy.
11.58 Sirko Harder examined the argument that the exclusive right to authorise use of one’s image is a commercial publicity right. Harder argued that a publicity right is akin to a property right which is transferable, as distinguished from an individual’s privacy interests which are not assignable in a proprietorial sense. However, there are cases where private information is provided in return for a monetary value. For instance, individuals who enter into contractual arrangements to disclose their private information such as ‘tell-all interviews’ on television—often in exchange for monetary compensation—attach some monetary value to their private information. Moreover, Harder argued that gain-based remedies are appropriate to remedy invasions of privacy given that
the right to privacy constitutes a right to exclude others from one’s private sphere and thus an exclusive entitlement against the whole world. … Gain-based relief is the natural consequence of the unauthorised use of an exclusive entitlement.
11.59 Also in favour of gain-based remedies in privacy actions, Witzleb argued that ‘gain-based relief as a less intrusive, and more carefully targeted, remedy should be preferred as the primary defendant-focused remedy in privacy cases’.
LJP Investments Pty Ltd v Howard Chia Investments Pty Ltd (1990) 24 NSWLR 499, 507.
Irvine v Talksport Ltd (2003) 2 ER 881.
Sirko Harder, ‘Gain-Based Relief for Invasion of Privacy’ (2011) 1 DICTUM-Victoria Law School Journal 63, 68.
Normann Witzleb, ‘Justifying Gain-Based Remedies for Invasions of Privacy’ (2009) 29 Oxford Journal of Legal Studies 325, 355.