Post Panama Papers: a litigious era?

With a plethora of issues unleashed by the leak, Dominic Crossley says this is a busy period for lawyers.

Journalists have been poring over the ‘Panama Papers’ for months. The result has been sensational stories that have dominated headlines all over the world. The financial conduct of the rich, powerful and famous has been laid bare for our consumption.

The journalists have done their bit, having had extraordinary access to information from Mossack Fonseca, and the lawyers have been getting busy too. There are a plethora of issues, and angry clients with deep pockets.

Of course, the lawyers for the publishers will have had the first chance to assess the risks and minimise liabilities. They will have considered issues including privacy, defamation, breach of confidence and data protection knowing that the stakes were huge. I would be fascinated to know the advice the publishers’ lawyers gave as to how the huge cache of data was to be handled. Hundreds of journalists from numerous publications in different jurisdictions had access to this material. Those European publications will be subject to the directive on data protection. It may well be that those identified in the stories will be making use of this law to find out what data is being held beyond what has been published in the newspapers. Presumably there is extensive irrelevant, privileged and confidential material that may not meet the exemption afforded to journalism.

And what about Mossack Fonseca itself? Its reputation has taken a battering and all the data belonging to the firm and its clients remain terribly exposed. The time may have come to issue writs rather than press statements. The firm and its insurers will be desperate to limit the damage so as to maintain its business and protect it from liabilities. One question they will be asking is whether the leak arose from inadequate security and/or negligence. For those exposed by the reporting, Mossack Fonseca may make a more attractive target than a newspaper or journalist.

Newspapers will still have to take care in their reporting. Football superstar Lionel Messi is already said to be taking action against a Spanish newspaper that published allegations arising from his name being linked to this scandal. Unless precautions are taken, others will follow. In the UK, we have become familiar with the repeated phrases in the articles telling us that there is nothing unlawful about use of these offshore structures. But an article may still be defamatory even if it is clear that it is not making an allegation of unlawful conduct. A number of articles have an unjustified focus on a celebrity; associating him/her with corruption and hypocrisy among the genuinely powerful.

To sue for libel in the UK, claimants will have to overcome new defences under section 1 (serious harm) and section 4 (public interest) of the Defamation Act. Both defences apply even if the allegation could not be proven true. The public interest in this story may also provide protection for claims in privacy and confidence.

Publishers appear to be treading carefully thus far and I do not know of any imminent writs in this jurisdiction. We will have to wait and see whether this will remain the case as the demands for the next exclusives emerge.