Appleby have said they were hacked but the journalists say the information was leaked from the inside.
Colin Riegels, global head of banking and finance and managing partner of the British Virgin Islands’ office of Harneys, is arguing that the journalists’ defence case will need a “volte face” or U-turn from judges to succeed.
By contrast, lawyers for Appleby have an “easy” case to prove.
Riegels argues: “Appleby’s claim will likely be framed in simple terms: the media companies acquired this information, they clearly knew that it was confidential, but they published it anyhow. Under English law that is all Appleby should need to establish prima facie liability for breach of confidence. Each of those should be easy for Appleby to prove.
“Equally, it is not difficult to envisage the basis on which the media companies will likely defend: they will simply claim that publication was in the public interest.”
For that defence to work they will need to establish one of two things: either the disclosure was necessary to prevent serious harm to the public, or that disclosure was justified.
Riegels argues that serious harm won’t be sufficient because “a few wealthy people engaging in tax mitigation schemes doesn’t really fit the bill” because the harm, if proven, is relatively small and, secondly, has already happened and the publication is not preventing something from happening.
Iniquity is the defence that no duty of confidentiality should protect no crime, civil wrong or serious public misdeed. It is the justification the Paradise Papers’ journalists will be looking to.
The problem, according to Riegels, is that much of what papers exposed was legal and won’t justify the publication.
“No doubt the journalists and their lawyers will crawl all over the documents desperately searching for some technical crimes that they can hang their hat on, but even if they find some (and odds are, on the law of averages, they will find some technical breach somewhere if they look long enough) that probably doesn’t save them because that would only justify disclosure of the information which related to that particular crime,” observes Riegels.
A bigger trick
Riegels believes the journalists will have to “pull a bigger trick” and persuade the court offshore tax planning represents “inherent moral turpitude”.
He argues that while it is not impossible it would be extraordinary volte face if that argument succeeded because, while the case has no precedents, parallels to be found in cases of sexual morality, which the courts have quashed. The courts have also refused to state that tax planning is morally wrong.
Ultimately, if Appleby succeeds it will have an “arresting effect on hacktivists” exposing offshore secrets but a Guardian and Panorama win will “become open season on hacking attempts against offshore”.
Appleby haven’t said why they are suing only the UK publishers and not German newspaper Suddeutsch Zeitung, which first received the data, or the International Consortium of Investigative Journalists (ICIJ) of which all three news groups are members.
However, the UK system does give greater weight to confidentiality and hands out larger relief payments.