In a significant judgment, the United Kingdom’s Supreme Court has held that a public official or body cannot disclose information which was obtained on condition of confidentiality. It said, “An impermissible disclosure of confidential information is no less impermissible because the information is passed on in confidence, or “off the record.”
Comprising Justices Lady Hale (deputy president of the court), Lord Mance, Lord Kerr and Lord Toulson, the court ruled in the judgment delivered by Lord Toulson that David Harnett, Permanent Secretary for Trade, Her Majesty’s Revenue and Customs, had violated the law of confidentiality though he spoke “off the record” to two financial journalist of The Times.
In the interview, he mentioned Patrick Mckenna, founder and Chief Executive Officer of Indigenous Media Holdings plc , an investment and advisory group specializing in the media and investment industries. It helped in film production partnership schemes which could avail of tax relief schemes. Harnett told the journalists about how Mckenna and his company helped investors to avoid about five million pounds in tax.
The story that the journalists wanted to write was about tax avoidance and Harnett spoke to them “off the record” on the issue. In the two articles, the journalists based on their interview with Harnett, they mentioned Mckenna by name, attributing it to a revenue official.
When Mckenna went to court of first instance, which found the disclosures “not irrational, were made for a legitimate purpose and were proportional.” The Court of Appeal upheld the approach.
When Mckenna approached the Supreme Court—which was till 2009 known as the Appellate Committee of the House of Lords —had allowed the Indigenous Media’ appeal.
Mckenna raised the issue as a matter of judicial review. But Lord Toulson speaking on behalf of the court said, “Judicial review is not the only course of action available to challenge the conduct of a public body.”
He set forth the principle: “This case should be approached from the perspective of the common law of confidentiality … It is a well-established principle of the law of confidentiality that where information of a personal or confidential nature is obtained or received in the exercise of a legal power or in furtherance of a public duty, the recipient will in general owe a duty to the person from whom the information was received or it relates. The tax affairs of individual taxpayers are matters between HMRC and the taxpayer, and confidentiality is a vital element in the working of the system.”
The court agreed that there were exceptions, and there are times that the rule of confidentiality can be over-ridden. The Commissioners of Revenue and Customs Act, 2005, was the specific law under which confidentiality with regard to the tax-payer is governed, more specifically for purposes of “civil and criminal proceedings”. Section 18 (1) of the Act provided for the obligations of the HMRC officers to the tax payer, and 18 (2) provided the exceptions.
“The correct interpretation of Section 18(2)(a)(i) is that it permits disclosure to the extent reasonably necessary for HMRC to fulfil its primary function [23]. It is for the court to decide whether there has been a breach of confidentiality by applying the law to its own judgment of the facts. The opinion of the individual who has disclosed the information is not irrelevant, but the court will decide what weight it should be given.”