Private Investigators Geelong - Commercial Intelligence
Law Snapshots

Confidential Information

Introduction

 

There is a case-based body of law called Equity which is based on principles of keeping promises and behaving conscientiously. One of the rules of Equity is the Duty of Confidentiality. This is a law which says that if you are provided with information that appears to be confidential, given its nature, or given the manner in which you were provided with it, or in which you obtained it, then you should keep it confidential. This basic principle is well established and it stands alongside statutory rules in the Privacy Act 1988 and the Surveillance Devices Act 1999, overlapping with some of those provisions. However there are a number of details which are not so well established or well founded, and some are downright unhelpful to investigators acting in pursuit of justice. These are so heavily subject to conflicting judicial opinion that this area of law is very murky and uncertain. Given that some courts and legal writers have it that you do not even need to identify any harm caused by a breach of confidence, and that an action can succeed for a breach that was justifiable in all the circumstances, then for investigators of all kinds it is a minefield just waiting to blow, provided the right case comes along. The writing below comes from a two year long study of cases and extra-judicial writings and the author stands by it as arising from the most thorough work on areas of the topic relevant to investigators. While the reader should be aware that it differs significantly from much opinion on the subject, these differences are only where detailed and logical reasoning based on judicial authority demands it.

What makes information confidential?

When someone tells you to keep a secret, this is express confidentiality, but confidence can also be implied by the following rules, The general rule is that if you come by information of such a nature that commonsense says it should be confidential, then it really is confidential. The same applies if you come by it in a context which says it ought to be confidential. Confidence is implied even though the person whose confidence is protected has placed no trust in the person acquiring that knowledge. Either way you are bound by civil law to keep the secret you have discovered.

Iniquity

The iniquity rule creates an exception for the keeping of a confidence, based on the principle that a wrongful act ought to be reported. This erroneously is understood by many to be a singular rule, but in fact there were two entirely separate sub-headings of law. 

The Gartside v Outtram Defence

The foundations of the iniquity exception were laid in the case of Gartside v Outtram in 1856. This matter concerned a series of unethical business dealings and the defendant's right to pass on information about them. The court gave clear definition to the principle that confidence cannot exist as to the revelation of an iniquity. In essence, the law is unwilling to assign rights that protect illegality and immorality. This means that if you are asked to keep a criminal conspiracy secret, you are free to report it to the police, the intended victim, or whomever may be interested. The rule also applies when confidence is only implied by the nature of the subject matter.

The Equitable Maxim of Clean Hands

In Equity law there are a range of maxims which act as guiding principles for courts. The maxim of clean hands means that you cannot rely on a rule of Equity if you have some relevant guilt in the matter. As opposed to the above, the maxim operates when the party seeking redress has committed a wrong that is unrelated to the actual information that may be protected. It may, for instance, be their conduct in protecting their rights as to the secrets they are guarding. The operation of this rule also is different in that it does not exculpate anyone, but simply disallows a court action.

Is There a Detriment Rule?

It was once regarded as part of the Equitable duty of confidentiality that there had to be some form of detriment in the breach of confidence for the plaintiff to have a case at all. You could not sue for a breach per se, but only if there was something likely to go wrong because of the breach. It is law in the United Kingdom, and was adopted by the High Court in Commonwealth v Fairfax. Notwithstanding this subsequent appeal decisions have discarded it in ignorance of the High Court and it appears accepted by a lot of lawyers that there is no detriment rule in Australia. Other more recent decisions, however, support the continued existence of a detriment rule.

 

 

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