Appleby, Guardian, BBC settle breach of confidence lawsuit

Michael O’Connell, Appleby group managing partner

Appleby, The Guardian newspaper and the BBC announced they have settled a lawsuit brought by the offshore law firm against the British media organizations in the wake of the so-called “Paradise Papers” coverage that was based on documents that Appleby said were stolen from the firm in a cyberattack.

In the suit, Appleby claimed a breach of confidence by the media organizations and sought a permanent injunction against further use of the information, as well as the disclosure and return of the documents.

In a joint statement, the companies said “they have resolved their differences in relation to Appleby’s breach of confidence claim against The Guardian and the BBC.”

The offshore law firm maintained that the main objective for bringing the proceedings was to understand which of its confidential and privileged documents had been taken to be able to respond “meaningfully” to clients, regulators and colleagues about exactly what information has been taken.

According to the joint statement, The Guardian and the BBC have assisted Appleby, “without compromising their journalistic integrity,” by explaining which of the law firm’s documents the media organizations used.

Michael O’Connell, group managing partner of Appleby, said, “From the outset we wanted to be able to explain to our clients and colleagues what information of theirs had been stolen. That was our duty. As a result of this legal action, we are well on our way to achieving our objectives.”

The documents were first obtained by the German newspaper, Süddeutsche Zeitung, which shared them with the U.S.-based International Consortium of Investigative Journalists (ICIJ). The ICIJ then coordinated the Paradise Papers project with 380 journalists from 96 media organizations in 67 countries.

The consortium also included the New York Times, Le Monde, the ABC in Australia and CBC News in Canada. However, Appleby only took legal action in the U.K.

In the lawsuit, Appleby claimed the documents used in the Paradise Papers coverage were stolen in a data breach and that there was no public interest in the stories published about it and its clients.

The Guardian and the BBC, in turn, argued that their “serious and responsible journalism” had revealed matters that were in the highest public interest and that otherwise would have remained secret.

“We welcome this settlement which preserves our ability to carry out investigative journalism in the public interest,” a spokesperson for the BBC said.

A spokesperson for The Guardian added, “The Guardian’s reporting from the Paradise Papers is investigative journalism that has raised important issues in the public interest.”

Details of the settlement remain confidential, but the settlement statement does not refer to any requirement to pay damages.

Data belonged mainly to fiduciary business

The joint statement also noted that most documents belonged to the trust and fiduciary arm of the group and were not legally privileged.

“It is now clear that the vast majority of documents that were of interest in the Paradise Papers investigation related to the fiduciary business that is no longer owned by Appleby and so were not legally privileged documents,” the statement said.

Appleby’s fiduciary business was spun off in a management buy-out in 2015 and now trades as Estera.

Farah Ballands, the chief executive officer of Estera, contacted clients on Oct. 25 informing them in an email that “a very small number of our clients have been approached by media organizations that appear to have accessed historical and confidential information.”

The clients were affected because Estera’s data was still stored on Appleby’s computer systems at the time of the data breach.

“At the time of the security incident, Appleby continued to host Estera’s data on its servers as part of a transition period post separation,” the email explained.

Estera said it has since established a fully standalone, independent IT system.

“As normal media practice is for approaches to be made before publication, we believe that if you have not been contacted by the press, you are unlikely to feature in any upcoming coverage,” the October email said.