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Supreme Court Underlines Confidentiality Duties of Public Officials

Public officials, particularly the tax authorities, frequently come into possession of sensitive and private information about individuals and a landmark Supreme Court ruling has underlined their overriding duty to respect confidentiality rights.

HMRC2The case concerned the founder and chief executive of an investment and advisory group that specialised in promoting film investment schemes that utilised certain tax relief provisions. A senior HM Revenue and Customs (HMRC) official gave an ‘off the record’ press interview in which journalists were told that such schemes had avoided at least £5 million in tax and in which the businessman was named. Articles attributed to a ‘senior revenue official’, that included a direct quote about the businessman, subsequently appeared in a national newspaper.

The businessman and his company launched judicial review proceedings against HMRC on the basis that their confidentiality rights had been violated. Their claims were, however, rejected by the High Court – and later by the Court of Appeal – on the basis that the official’s disclosures were made for a legitimate purpose, were not irrational and were proportionate.

In unanimously upholding their appeal, the Supreme Court noted the well-established principle of law that, where confidential information is obtained or received in the exercise or furtherance of a legal power or public duty, the recipient will in general owe a duty of confidentiality. The tax affairs of individuals were matters between HMRC and the individuals concerned and confidentiality was a vital element in the efficient working of the system.

The provision of confidential information to the journalists was no less impermissible because the interview was off the record and the disclosures could not be justified by HMRC’s desire to foster good relations with the media and to publicise its own views on tax avoidance issues. The Commissioners for Revenue and Customs Act 2005 provided that HMRC officials may not disclose taxpayer information and the details provided to the journalists in the particular case did not fall within any of the exceptions to that rule.