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Bank's documents unleash long arm of confidence

Imagine that a newspaper receives confidential information of global public interest and puts it into the public domain on its website, which has millions of users worldwide.

Any injunction application would be defeated on the grounds of public interest, extensive publication and the fundamental right to receive and impart information freely without interference by state authority – Yes?

After all, under Section 12 of the Human Rights Act, before a court injuncts the media, it is obliged to have “particular regard to” the importance of freedom of expression, the public interest, and the extent of any existing publication of the information.

Actually, the answer depends on all the circumstances. And on the facts relevant to Barclays’ recent success in preventing The Guardian from continuing to publish its confidential internal documents on tax avoidance, the answer of two High Court judges was a web-gagging ‘No’.

The case highlights what journalists can, and can’t, get away with under the law of confidence.

A Barclays source passed secret documents to Lib Dem deputy leader Vince Cable, detailing tax avoidance schemes that had been proposed between 2005 and 2007 to save the bank millions of pounds in UK tax.

There was genuine public interest in the story as (for example) the G20 have recently questioned the desirability of tax avoidance and havens.

The bank had voluntarily disclosed the tax schemes to HMRC for approval, albeit with privileged legal advice redacted, but it had not thereby waived confidentiality.

The documents came into the hands of the Sunday Times which, on 15 March, published a lengthy story about the bank’s tax strategy but did not quote from the confidential documents themselves.

The Guardian also obtained copies of the documents. At about 10pm on 16 March, it published in print a story based on the confidential information, but it also published the bank’s unredacted documents themselves on its website, which has 30 million users.

The documents were thereafter copied by others elsewhere on the internet and may yet be circulating exponentially.

Editor Alan Rusbridger said he considered the documents to be of the highest significance in the debate about tax avoidance in that they revealed at first hand the process involved in structuring complex tax avoidance vehicles, how lawyers and accountants work together to exploit loopholes in legislation and the degree to which they are sanctioned at the highest level within Barclays.

At 2.30am on 17 March the bank persuaded Mr Justice Ouseley to grant an interim injunction against the online publication until office hours the next day when another judge, Mr Justice Blake, decided to continue the injunction until trial of the breach of confidence complaint.

It’s interesting to note that neither of the two newspapers’ print-edition reports were injuncted. For one thing, it was too late to halt The Guardian’s print edition in the early hours of 17 March, but more significantly, Blake J. said he would not have agreed to order The Guardian not to refer to the confidential documents at all or to hand back all copies of them, even if asked to do so.

Freedom of expression entitled the newspapers to publish the bones of the story.

However, publication of the unredacted documents online was a different kettle of fish, and the judge felt the limited dissemination on the internet between 10pm and 2.30am was insufficient to destroy confidentiality in the documents to the extent that an injunction would be futile and inappropriate.

Mr Justice Blake said: “The public interest in understanding how these great financial institutions, that are a part of the bedrock of our economy and society, actually go about their business and the inter-relationship between the benefits and burdens of this economic activity is acutely topical and a matter for the most serious public debate.”

He added: “I can see no reason why The Guardian should not be able to make use of the contents of documents that they received from the MP to inform their opinions and to express them and to stimulate public debate (even if that meant selective quotations from the documents themselves to illustrate the point).

“Freedom of speech is a precious value in a democratic society that the courts must strive to protect and promote. However, that does not mean that journalists should have complete freedom to publish, in full, confidential documents leaked in breach of a fiduciary duty, pursuant to the exercise of the right to freedom of expression.”

The case hinged on the fact that four hours’ publication online did not mean the documents’ confidentiality had been lost. The court accepted the confidentiality might yet evaporate within weeks if there were large-scale re-publication online by others, but for now the bank’s documents still retained a measure of confidentiality worthy of the court’s protection.

For those looking to minimise risk, the case suggests that simply summarising, or selectively quoting from, confidential documents (rather than disclosing them in their entirety) may help to see off an injunction threat, particularly where the confidential information has only entered the public domain to a limited extent.

  • Solicitor Nigel Hanson is a member of Foot Anstey’s media team.
    To contact Nigel telephone 0800 0731 411 or e-mail [email protected].