In its recent judgment in the case of Ingenious Media Holdings plc & Anor, R (on the application of)v Revenue and Customs  UKSC 54, the United Kingdom Supreme Court has found the UK’s tax authority, Her Majesty’s Revenue and Customs, liable for a breach of its common law and statutory duties of confidentiality, as owed to a taxpayer.
The breach occurred when the Permanent Secretary for Tax in HMRC, Mr David Hartnett, gave an interview to two financial journalists from The Times newspaper. They had requested the meeting to discuss tax avoidance. The meeting was recorded, and was agreed to be “off the record”.
However, some of the information provided by Mr Hartnett during the course of the interview was quoted, or alluded to, in two subsequent articles in The Times.
Lord Toulson’s speech makes a number of important, and interesting, observations:
- Firstly, as to the law on confidentiality: “The duty of confidentiality owed by HMRC to individual taxpayers is not something which sprang fresh from the mind of the legislative drafter. 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 it was received or to whom it relates not to use it for other purposes. The principle is sometimes referred to as the Marcel principle, after Marcel v Commissioner of Police of the Metropolis  Ch 225. In relation to taxpayers, HMRC’s entitlement to receive and hold confidential information about a person or a company’s financial affairs is for the purpose of enabling it to assess and collect (or pay) what is properly due from (or to) the tax payer. In R v Inland Revenue Comrs, Ex p National Federation of Self-Employed and Small Businesses Ltd  AC 617, 633, Lord Wilberforce said that “the whole system … involves that … matters relating to income tax are between the commissioners and the taxpayer concerned”, and that the “total confidentiality of assessments and of negotiations between individuals and the revenue is a vital element in the working of the system”. See also Conway v Rimmer  AC 910, 946 (Lord Reid); and R v Inland Revenue Comrs, Ex p Preston  AC 835, 864F (Lord Templeman).”
- Secondly, as to the Court’s function when determining a complaint that a public authority has breached a statutory or common law duty of confidentiality: “Ordinarily it is a matter for the court to decide the question whether there has been a breach of a duty of confidentiality, applying established principles of law to its own judgment of the facts. … It is a cardinal error to suppose that the public law remedies and principles associated with judicial review of the exercise of administrative power, developed by the common law from the ancient prerogative writs, occupy the entire field whenever the party whose conduct is under challenge holds a public position. It is important to emphasise that public bodies are not immune from the ordinary application of the common law, including in this case the law of confidentiality. The common law is multi-faceted and remains the bedrock of the English legal system“. The point is that a claim for breach of confidence (or analogous causes of action, such as misfeasance in public office, breach of statutory duty, or misuse of private information) are private law claims, not public law claims (notwithstanding the fact that the defendant is a public authority).
- Thirdly, briefing a journalist “off the record” does not mean that a breach of confidence has not occurred: on the contrary, the briefing itself is the breach (even if it was not intended that the information would be published more widely): “every schoolchild knows that this is how secrets get passed on”.