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Appleby Suing BBC, Guardian Will Put Public Interest Defence Through Its Paces

Josh O'Neill

21 December 2017

, a tax and financial crime consultancy, told this publication. 

Public interest defence
Appleby’s move will undoubtedly prompt questions over whether the documents were obtained legally.

While the majority of mainstream media houses said the documents were “leaked”, it has been suggested that they were, in fact, stolen from Appleby’s data vaults. 

If this was the case, then the BBC and the Guardian’s legal defence would likely rely heavily on the public interest element, meaning they would have to prove in court that the gravity of the documents’ contents warranted the use of any illegal methods used to obtain them. 

“It is likely that the defendants will indeed counter with the powerful corroboration of their public interest defence,” Grant said. However, “in the age of the internet, the request for the return of the documents is unlikely to be of great significance, given the considerable time which will have elapsed between the data coming into the possession of the media and the final court judgement.”

He explained that a pivotal point in the case could be the prospect of “significant damages” being awarded to Appleby, as this may “in future limit the media’s willingness to receive such information, given that they would not be able to shift the responsibility to hackers or intermediaries without revealing sources – a journalist’s ultimate taboo”.

Last month, a leading London-based tax lawyer spoke to this publication about some of the legal implications of the Paradise Papers scandal.

“It would be very surprising if the affairs of those individuals concerned were illegal or nefarious; it is the theft of the papers that is illegal,” Miles Dean, managing partner at Milestone Tax, told this publication shortly after the documents were exposed. “Just because an individual makes an investment that is based offshore does not mean that they have done anything wrong. If they fail to disclose it - and the return they make - on their tax return, then that’s tax evasion. But to make the quantum leap and suggest that everyone from the Queen to Bono is dodging tax because some of their investments are made via Bermuda, Cayman or Malta is stupidity on a grand scale.”

As with last year's Panama Papers, the Paradise Papers were obtained by the Washington DC-headquartered International Consortium of Investigative Journalists (ICIJ) and shared initially with German newspaper Süddeutsche Zeitung. There are now nearly 100 media groups scouring the documents. This publication has not seen the documents, however. 

Last month, Appleby defended itself against the claims of malpractice before the documents were made public. The firm said it had “thoroughly and vigorously investigated the allegations” and found no evidence of wrongdoing in-house or among its clients. 

“We refute any allegations which may suggest otherwise and we would be happy to cooperate fully with any legitimate and authorised investigation of the allegations by the appropriate and relevant authorities,” Appleby said. The firm also has offices in the British Virgin Islands, the Cayman Islands, the Isle of Man, Jersey, Guernsey, Mauritius, Seychelles, Hong Kong and Shanghai.

“Appleby’s clients would be well advised not to place too much hope in these actions,” Grant said. “It may well be more a case of the firm sending a loud message saying: ‘At least we tried’.”

Initially, UK media was abuzz around claims that that those acting for Queen Elizabeth II made investments in a Cayman Islands fund through the monarchy’s private estate, the Duchy of Lancaster (source: Guardian newspaper). Around £10 million ($13 million) of the Queen’s private money was invested offshore, raising questions about whether the monarch should be using tax-efficient structures. The Duchy said it was not involved in decisions made by funds and there is no suggestion the Queen had any knowledge of investments made on her behalf, according to the BBC

The ICIJ said its trove of data “reveals offshore interests and activities of more than 120 politicians and world leaders” and exposes the “tax engineering” of “more than 100 multinational corporations, including Apple, Nike and Botox-maker Allergan”.

To view a related article by a Geneva-based academic about the Paradise Papers, see here.