In recent years, the issue of open justice has surfaced in the public’s consciousness, partly due to media attention on cases involving high‑profile public figures, notably the British royal family. The debate centres around two apparently competing human rights: an individual’s right to privacy and the right to freedom of expression advocated by the press as necessary to bolster the public’s confidence in the legal process.

Originally published in STEP Journal 2022 Issue 4, this article by Emma Holland, Jenny Duggan and Judith Swinhoe-Standen considers privacy and open justice in England and Wales and offshore jurisdictions.

Trust cases in England and Wales

In trust cases, the starting point is that there is no general exception to the principle of open justice. Accordingly, applications for privacy based on, for example, the risk that publication of confidential financial information about a private company underlying a trust might damage its value, are likely to be rejected.

Where minor beneficiaries and/or vulnerable adults are involved, the courts will weigh the open justice principle against the risk of harm to their interests, an approach illustrated in recent applications related to the Variation of Trusts Act 1958. Although the courts appear unlikely to allow hearings to proceed in private, they may order reporting restrictions and/or anonymise judgments to avoid minors being identified. However, it is clear that anonymity is not the default position, even where minors are involved.

How is the law in this area likely to evolve?

In considering how the approach of the English and Welsh courts to open justice may evolve, it is useful to look at recent developments in the Family Division of the England and Wales High Court (the Family Division), not least because financial remedy claims often involve trusts and the parties frequently raise similar concerns about information becoming publicly available. Similarly, it is interesting to observe how the courts of other jurisdictions have broached such issues.

Recent developments in the Family Division

In 2021, the President of the Family Division addressed the issue of transparency and concluded that accredited media representatives and legal bloggers should be able to not only attend Family Division hearings but also report publicly on them. However, he accepted that there must be very clear rules to maintain the anonymity of children and family members, and the confidentiality of intimate details of their private lives.

Since then, a series of cases has shed light on the Family Division’s promotion of open justice. For example, in BT v CU, Mr Justice Mostyn stated: ‘My default position from now on will be to publish financial remedy judgments in full without anonymisation, save that any children will continue to be granted anonymity. Derogation from this principle will need to be distinctly justified by reference to specific facts, rather than by reliance on generalisations.’ He essentially repeated this warning in A v M.

Subsequently, in XZ v YZ, Mr Justice Mostyn took a more cautious approach. In that case, he imposed an interim reporting restrictions order (RRO) on the basis that its scope was to be addressed in final submissions at the end of the trial. He explained that the balancing exercise between the principle of open justice and the rights to privacy and freedom of expression could be properly carried out only at the end of the financial remedies hearing. At the beginning of the hearing, it was not known to what extent, if at all, the oral evidence would disclose matters that could adversely prejudice the parties and related third parties. However, by the end of the hearing, the press who had attended would be more informed regarding any opposition they may wish to make to the RRO. Mr Justice Mostyn suggested that this ‘would be a useful procedure in many cases’ and commented that it would ‘ensure that the balancing exercise is done on the best available evidence’.

The approach in other jurisdictions

Although the authors cannot advise on foreign laws, it is interesting to observe that in matters concerning trusts certain jurisdictions appear particularly protective of privacy rights.

The Court of Appeal for Bermuda’s (the Court’s) view in Re BCD Trust (Confidentiality Order) was that it was ‘inherently consistent with the public interest and the administration of justice generally that applications [relating to internal trust administration] should be anonymised and dealt with as private applications, where there is no obvious public interest in knowing about an internal trust administration matter’.

Further, it found that ‘the general public [had] no right to pry’ into the internal administration of a private trust and that the law was ‘merely designed to enable law‑abiding citizens to peaceably enjoy their actual and contingent property rights’. More recently, where trustees sought an order empowering them to add a charitable foundation as a discretionary beneficiary of the trust, the Court granted accompanying privacy orders on the basis that the application was ‘purely transactional’ and that there was ‘no legitimate interest that the public would have in knowing about the wealth and the vesting affairs of the settlor’.

In other jurisdictions, the constitution provides an apparent exception to open justice. The parties in AB and Line Trust Corporation Ltd and Ors sought to invoke the Gibraltar Constitution Order 2006, which provides that all court proceedings are held in public ‘except with the agreement of all the parties’. The Supreme Court of Gibraltar held that the provision’s purpose was not to override the principle of open justice but to create a limited exception to it, which necessarily involved exercising judicial discretion. It accepted the application of the exception in that case on the basis that:

• the underlying proceedings had settled;
• publicity could jeopardise the settlement and the value of the trusts; and
• publicity could adversely affect beneficiaries not involved in the underlying proceedings.

As to the risks of publicity, in HSBC Trustee CI v Kwong, the Jersey Royal Court (the Jersey Court) declined to make a privacy order despite the parties agreeing that one was necessary to mitigate media attention towards them. The Jersey Court identified three broad circumstances where ‘public justice may yield to some other factor’, where:

• minors or persons with a disability are involved;
• the court would be unable to do justice sitting in public; and
• the right to privacy outweighs the interests of public justice.

It was heavily influenced by the fact that the essential features of the background to the underlying litigation were already in the public domain via media reporting. Consequently, the Jersey Court found that the judgment’s publication would cause little further invasion of the beneficiaries’ privacy.

In the Cayman Islands, the courts appear to aim to strike a balance between ‘the general rule as to publicity’ against ‘any requirements for confidentiality or privacy in the interest of justice that might arise in a particular case’. Therefore, applications are likely to be granted where there is ‘no public interest in open justice which outweigh[s] the countervailing interests of’ the beneficiaries and the trustee’s ability to administer the trust. Conversely, it seems the Cayman Islands courts are unlikely to grant privacy orders in trust proceedings involving tax or regulatory matters or where relevant information is already in the public domain.

In the Isle of Man, Re Delphi clarified that questions of construction of the trust instrument and/or a statute, or where a trustee’s decision is being attacked in hostile litigation, would generally be heard in an open court. Conversely, matters in which the trustees seek directions or approval from the court for an action proposed in respect of the trust, or where there is a surrender of discretion, would normally be heard in private. Where applications fall into more than one category, the court will consider whether there is a ‘clear public interest’ in the case being heard in an open court.

Comment

It is unsurprising that privacy orders are so commonly sought, given the inherently private nature of most trust cases. Although open justice appears to be viewed as a fundamental principle by all the jurisdictions referred to above, all seem to accept that in certain circumstances there is a need for exceptions to apply. The scope of the exceptions varies, as does the extent to which judges appear willing to exercise their discretion and the importance attributed to relevant factors.

Of the jurisdictions considered, the courts of England and Wales appear to uphold the principle of open justice most robustly. There is no general exception to open justice, and it appears that anonymity and/or reporting restrictions will be considered only where necessary to protect the interests of minors or vulnerable people.

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