The Court said that it cannot be justified in all cases for police to provide prospective employers with details of even "minor" offences and cautions given to individuals as part of a criminal record checking process.
The Government has said it will seek permission to appeal against the judgment at the Supreme Court, according to a report by the BBC.
The Court of Appeal had assessed whether laws governing police behaviour and the rehabilitation of offenders provided for justifiable invasions into individuals' private lives. The rules require police to disclose all "recordable" offences and warnings relating to individuals on an 'enhanced criminal record certificate' (ECRC) which can be requested by employers.
However, the Court said it was not right that in some cases individuals' job prospects could be put at risk because of the disclosure of minor offences they have committed, or warnings they had been given, particularly if they had been a child at the time.
"It is the very fact that [disclosure] is mandatory in all cases that is the objectionable feature of the scheme and which, in our view, renders it incompatible with [the right to privacy set out in the European Convention on Human Rights (ECHR)]," the Master of the Rolls, Lord Dyson, said in the ruling.
Under the ECHR everyone has a general right to privacy. The ECHR states, though, that public authorities can interfere with individuals' privacy providing it is in accordance with the law and it is "necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others" for it to do so.
The Government had argued that the aims behind the criminal record disclosure rules that are in place justified the intrusion into individuals' private lives. It said disclosure of all the "recordable" information relating to individuals' criminal records was justified in order to provide "important protection for employers and for the children and vulnerable adults in their care". It said the actual effects of ECRC disclosures were "limited" because job applicants are "not automatically barred from employment" as a consequence of those disclosures.
The Government said that consideration was being given to the introduction of a filtering system whereby "old and minor convictions and cautions" would not always be required to be disclosed, but warned that there would be "significant practical difficulties" in creating such a filtering mechanism and said it "would involve the expenditure of substantial additional resources".
The Court of Appeal reviewed the Government's arguments in the context of three separate cases in which individuals argued that the criminal record check disclosure rules had breached their privacy rights.
The central case involved a man known only as 'T' who had been given two warnings in connection with the theft of two bikes when he was 11. Those police warnings had been disclosed in a police ECRC sought by a local football club in 2008 when T had applied for a part time job there.
After that disclosure the police agreed to 'step down' their records of T's warnings – a process it was previously allowed to exercise discretion over which meant that they could set information relating to less serious offences as being not "disclosable to third parties", according to the ruling.
However, when T applied for a university teaching course in 2010, which involved contact with children, the university obtained an ECRC from the police which disclosed the warnings. T had not himself declared to the university that he had received the warnings when questioned about his criminal record because he believed the warnings were considered to have been 'stepped down', the ruling said. The police, though, pointed to newly established case law at the time that barred them from exercising discretion to 'step down' records of less serious offences.
The Court of Appeal said that the disclosure of "sensitive information" about T had interfered with his privacy life. It said that the disclosure of the warnings "was liable to affect his ability to obtain employment and to form relationships with others". The Court ruled that the interference with T's privacy was not justified.
UK laws that require "the disclosure of all convictions and cautions relating to recordable offences is disproportionate" to the aims of "protecting employers and, in particular, children and vulnerable adults who are in their care", the Master of the Rolls, Lord Dyson, said in the ruling.
"The disclosure regime was introduced in order to protect children and vulnerable adults," the judge said. "That objective is not furthered by the indiscriminate disclosure of all convictions and cautions to a potential employer, regardless of the circumstances."
"A blanket requirement of disclosure is inimical to the ROA (Rehabilitation of Offenders Act) and the important rehabilitative aims of that legislation. Disclosure that is irrelevant (or at best of marginal relevance) is 'counter to the interests of re-integrating ex-offenders into society so that they can lead positive and law-abiding lives'," the Master of the Rolls said. "In our judgment, the blanket nature of the disclosure regime goes wider than is necessary to achieve its purpose of protecting children and vulnerable adults."
Employment law specialist Gary Freer of Pinsent Masons, the law firm behind Out-Law.com, said that the Government could have to "devise a filtering mechanism so that only convictions which are relevant to the purpose of the request are disclosed" if it is unable to overturn the Court of Appeal's verdict.
"Such a system would, as the Government argued in Court, be difficult to achieve - but the Government has already commissioned expert research on how the difficulties might be overcome," Freer said. "In the meantime employers and regulators will have to await the outcome of this process. As the Disclosure and Barring Services has already announced, it is 'business as usual' at the moment."
Government officials had said that there are a number of "practical difficulties" about creating a filtering mechanism, such as the difficulties in knowing which offences should be deemed so minor as to not be included in any disclosure and how factors such as the age offenders were at the time of offences should be considered when forming a filter.