Sir Fred Goodwin, the former chief executive of the Royal Bank of Scotland (RBS), could not have expected to keep an alleged affair with a colleague concealed by the use of privacy injunctions because the nature of his job meant there was a public interest in his relationships, a judge has said.
Mr Justice Tugendhat, ruling for the fourth time on the controversial case, also said it was reasonable to identify the woman's job description as "an important feature", but she should not be named because it would "be likely to cause distress to her".
Sir Fred had a "reputation as an exceptionally forceful businessman", said the judge. He was "chief executive of one of the largest publicly quoted companies in the United Kingdom, doing business on a global scale" which made him "a public figure" whose private life was more likely to be of interest to the public.
This public interest, it was said, distinguished Goodwin, under whose stewardship RBS had to be bailed out with £45 billion of taxpayers' money, from "sportsmen or celebrities" – such as footballer Ryan Giggs – who do not normally carry out "official functions" unless their indiscretions were to impact upon, for example, their football team.
Few details of the nature of the alleged relationship between Goodwin and his colleague emerged in court, with neither party prepared to offer details in witness statements. Formally, RBS seems to have been unaware of the relationship until February 2011, more than two years after Goodwin left the bank, and just days before The Sun newspaper first contacted him regarding the allegation.
Evidence from the woman stated that an internal investigation had been conducted by RBS, after which she had "not been criticised or disciplined" and it had "not been suggested by anyone at RBS that she was in a position of conflict or in breach of the RBS code [of conduct]". RBS refused to elaborate, other than to repeat its statement that it was "co-operating fully" with the City regulator, the Financial Services Authority.
However, a witness statement from Goodwin in March – when he was still trying to maintain an injunction preventing the publication of his name – said he believed publication of the alleged affair would "lead to considerable, intrusive and disturbing speculation as to my private life and relationships", and "have a very substantial impact on the way in which friends, colleagues and business contacts relate to me and therefore a serious negative impact on my personal life and career".
The Sun originally began inquiring about a story about Goodwin and the unamed woman on 1 March, and lawyers acting for the bank boss succeeded in obtaining an injunction preventing Goodwin being named via a telephone hearing later that day. However in May, the injunction was altered allowing Goodwin – but not the woman – to be named, hours after Lord Stonenham, speaking on behalf of Lord Oakeshott, used parliamentary privilege to identify Goodwin as somebody who had taken out a privacy injunction.
In the ruling Tugendhat also criticised Lord Stoneham, who used parliamentary privilege to name Goodwin publicly for the first time, for deliberately "frustrating" the court order.
In reply, Lord Oakeshott said: "Every taxpayer has the right to know all the relevant facts leading up to the collapse of RBS, including failures of corporate governance. Each individual failure of corporate governance might not have been enough to bring down the bank on its own, but every single emergency brake had to fail for RBS to crash so disastrously off the Forth Bridge."
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