When Is It Permissible To Breach Confidentiality Obligations In The Public Interest?

The English High Court has handed down its judgment in Saab v Dangate Consulting Ltd and others,1 finding that the Defendants, private investigators appointed to conduct an internal investigation at a bank, had breached their confidentiality obligations by disclosing material from their investigation to regulators. The Defendants had asserted a public interest defence, alleging they had come across evidence of criminality, and that the disclosures had been compelled by law, but the Court rejected these arguments. The decision provides a reminder of the various factors the Court will take into account in deciding whether a public interest defence should succeed against a claim for breach of confidence, and is timely given the increasing tension between businesses' duties to make disclosures to regulators and law enforcement authorities, and their obligations to safeguard certain categories of information pursuant to (for example) confidentiality and personal data obligations. This alert examines the key features of the Court's judgment.

Background

In July 2014, the US Financial Crimes Enforcement Network ("FinCen"), a US regulator, issued a Notice of Finding in respect of FBME (the "Bank") expressing concerns that the Bank may have been used to facilitate money laundering in Cyprus and Tanzania. Subsequently, the Central Bank of Cyprus ("CBC"), the regulator of the Bank's Cyprus branch, assumed the administration of the Cyprus branch. The owners of the Bank then engaged the Defendants, former police detectives specialising in corporate investigations, to investigate, although there was some subsequent disagreement regarding the scope and purpose of the investigation. Due to this disagreement and allegations regarding the Defendants' unpaid fees, the investigation was effectively brought to an end in November 2014.

Notwithstanding strict confidentiality obligations surviving the termination of their retainer, the Defendants then provided materials from the investigation to several parties, including the CBC, FinCEN and other law enforcement agencies. Materially, the Defendants argued that they made the disclosures because they had come to the conclusion that the extent of the criminality being conducted through the Bank was so serious that it represented a threat, not only to the banking system, but to the safety and welfare of other people. They also argued that they had been acting under legal compulsion to assist the CBC after it had...