Paradise Papers: Legal trouble awaits if media publishes without a public interest defence

At the risk of stating the obvious, most of the documents that appear to have been stolen from offshore law firm Appleby by way of hacking (not, as much of the media seeks to suggest, as a result of a "leak") are confidential.

Comms professionals should consider their legal options if their clients are affected by the Paradise Papers, advises David Engel
Comms professionals should consider their legal options if their clients are affected by the Paradise Papers, advises David Engel

Anybody in possession of information which is plainly confidential is under an automatic legal obligation not to disclose it.

The fact that there may not be any contractual duty to keep it confidential does not matter.

That will therefore include not only the hackers, but any journalist, newspaper publisher or broadcaster who has the documents (or the information in them).

Secondly, and separately, it may well be private information and therefore protected under Article 8 of the European Convention on Human Rights. The case law has established that such protection extends to personal financial information.

The only realistic defence available to the media is that there is a public interest in its disclosure.

However, it is much harder to establish a public interest defence than many journalists, and perhaps some PRs, might imagine.

This was recently confirmed in the Court of Appeal when it upheld hedge fund Brevan Howard's injunction against Reuters, who sought to argue that there was a public interest in "exposing" the allegedly murky world of hedge funders.

The Court gave that submission short shrift.

Thirdly, depending on the precise fact pattern, there may be liability under data protection legislation.

In addition, the Editors' Code of Practice prohibits the publication of material obtained "by the unauthorised removal of documents or photographs; or by accessing digitally-held information without consent".  

The media is not, therefore, entitled to ride roughshod over the privacy and confidentiality rights of those who have chosen, often for perfectly sensible and entirely lawful reasons, to have some of their assets held in offshore structures.

Of course, if the documents in question disclose serious wrongdoing, let alone criminal offences such as money laundering, fraud or tax evasion, the media may well have a public interest defence.

But, where such documents are confidential and/or private and would disclose only lawful steps to mitigate tax liability (no different in object or effect from investing in an ISA or a personal pension plan), then the media would likely struggle to provide any legal justification, no matter how newsworthy or prominent that person may be.

Communications professionals are occasionally reluctant to deploy the lawyers in this kind of scenario, perhaps fearing that it would make their clients look defensive or guilty.

Such concerns in practice often turn out to be groundless, particularly when coupled with a narrative explaining that they are simply exercising their legal right to protect their privacy and that of their families.

Most clients would probably at least like to be aware that preventing disclosure of their personal financial affairs is an option, as is pursuing those responsible after the event for compensation for the distress and embarrassment caused.

David Engel leads the reputation & information protection team at Addleshaw Goddard LLP

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