Summit pushes action on discredited Cayman law

Confidential Relationships (Preservation) Law to be replaced

The Confidential Relationships (Preservation) Law – which Cayman’s attorney general once referred to as “the bane of our existence since the 1970s” – will be replaced by rewritten legislation as early as this summer.

The new law, called the Confidential Information Disclosure Bill, could come before the Legislative Assembly as early as next month following budget discussions. Premier Alden McLaughlin announced plans to repeal the territory’s current law at the Anti-Corruption Summit in London this week.

New proposal

Much of what was contained in the previous Confidential Relationships (Preservation) Law has survived in the rewritten version of the legislation, which was made public Thursday.

However, the new proposal reads as enabling legislation, rather than preventative, stating under what circumstances confidential information is able to be disclosed.

Most instances where confidential information can be disclosed center around requests by law enforcement and financial regulatory authorities, including requests from the Royal Cayman Islands Police, the Cayman Islands Anti-Corruption Commission, the Cayman Islands Grand Court and the Cayman Islands Monetary Authority.

Disclosures made under Cayman’s Mutual Legal Assistance Treaty with the U.S. or where lawful requests are made by the Cayman Islands Monetary Authority or the Financial Reporting Authority are also permitted.

Confidential information disclosures, as was the case under the previous law, are allowed with the consent of the business entity’s principals.

A new section of the legislation concerns disclosures of confidential information “in relation to a serious threat to life, health, safety of a person or in relation to a serious threat to the environment, shall have a defense to an action for breach of the duty of confidence.” This protection depends on the person acting “in good faith,” in the same manner as would normally occur in a whistleblower situation.

‘Duty of confidence’

The rewritten law also contains a similar requirement as the previous legislation for an individual, who is said to have a “duty of confidence” to their employer or organization, who is due to give evidence in a court proceeding.

The proposed legislation maintains the requirement that the person apply for directions from the Grand Court prior to giving their evidence, unless they have already been allowed to divulge that information by the company’s principal.

A Grand Court judge, when hearing such an application, can then direct – based on the information before the court – whether the evidence can be given, or whether some of it should be withheld or even if some of it should be given only under certain conditions.

The judge can also order the evidence to be disclosed only to certain individuals in order to safeguard confidentiality.

Repeal considered ‘some years ago’

In February 2010, Cayman Attorney General Sam Bulgin told the Legislative Assembly that a financial task force reviewing the islands’ reporting regime recommended the repeal of the Confidential Relationships (Preservation) Law “some years ago.”

However, back in 2010, a considerable amount of uncertainty about Cayman’s fledgling data protection legislation – aimed at preventing the disclosure of an individual’s private information – still existed. Mr. Bulgin said it was decided that government should not attempt to amend the confidential relationships law until the other proposal had been dealt with.

Six years later, the Data Protection Bill has not been approved nor the Confidential Relationships (Preservation) Law been repealed. The Data Protection Bill is expected to be voted on by lawmakers in September.