Cayman’s Confidential Information Disclosure Law, 2016
An event like the “Panama Papers” has raised questions about the restrictions on disclosure of information in offshore jurisdictions. In response to these concerns, on 15 July 2016, the Governor of the Cayman Islands assented to a bill repealing and replacing the preexisting Confidential Relationships (Preservation) Law (2015 Revision) (the “CRPL”) with the Confidential Information Disclosure Law, 2016 (the “CIDL”). The Cayman Island’s Minister for Financial Services, Wayne Payton, said the CIDL was “not secrecy legislation”, rather it was enacted in light of recent events to maintain “a respect for privacy whilst providing appropriate gateways to information by local competent authorities”.
So, what are the key differences and developments arising out of the CIDL?
One key difference is that the disclosure of confidential information is now restricted to being a common law breach of the duty of confidence. This confines remedies to civil sanctions; criminal liability found under s. 5 of the CPRL for disclosing confidential information has now been removed. The CIDL also limits the definition of “confidential information” to only include “information, arising in or brought into the Islands, concerning any property of the principal, to whom a duty of confidence is owed by the recipient of the information” (emphasis added). Previously, the CRPL did not specify that a duty of confidence had to be present to constitute the meaning of “confidential information”.
Section 3(2) of the CIDL is also a noteworthy addition. That provision now permits a party to use a “whistle-blower” defence by extending the exceptions for disclosure beyond simply “in the normal course of business” and allows disclosure of confidential information when it is conducted in good faith with reasonable belief that the information disclosed evidence of a serious wrongdoing.
Finally, the CIDL further revises instances when a party may fall under an obligation to disclose confidential information, in the event that express consent cannot be obtained by the principal, by clarifying the specific local authorities to whom information can be disclosed and the relevant permitted circumstances.
Real practical implications arise from the changes in the CIDL, but the main take-away is the jurisdiction’s commitment to finding the balance between protecting confidential information on the one hand and the public interest on the other.