Where justice requires confidentiality 

In an era of increasing insistence on public scrutiny into private lives, especially of the wealthy, the courts must increasingly perform a balancing act between private needs and public requirements.

In March, the Julius Baer Trust Company (Channel Islands) Limited issued an ex parte originating summons seeking various protections in proceedings regarding a Cayman Islands law governed discretionary trust. The main action was an application for directions by the Trustee seeking the Court's approval for proposed actions in relation to the Trust.

The Trustee sought a confidentiality order whereby only anonymised versions of court documents would be placed on the public register, and all applications relating to the substantive directions hearing would be heard in private.

The principle of open justice requires that justice must literally be seen to be done. But there are occasions when openness of court proceedings will be at odds with the requirements of justice. The Cayman Islands courts have often been required to find the right balance, particularly in proceedings relating to the administration of private trusts, where confidentiality of the proceedings may be a necessity for the protection of the interests of beneficiaries, the dispensation of which may well defeat the very interests of justice.

Justice Kawaley of the Cayman Islands Grand Court took a view of the public interest which takes into account the status and position of the Cayman Islands as an offshore jurisdiction. At the same time, he emphasised that applicants who obtain confidentiality orders are still subject to ongoing duties to ensure that the trust and trust beneficiaries are compliant with any applicable tax or regulatory obligations. He also pointed out that a confidentiality order is always liable to be set aside should public interest require.

The decision demonstrates that there will still continue to exist legitimate grounds, underpinned by the Bill of Rights in the Cayman Islands Constitution, for protecting the confidentiality of certain court proceedings.

The court's stance is a bold one, taken against an ever advancing tide towards openness without exception. In doing so, the court confirmed that it is legitimate to recognise and give effect to factors which help to define the public interest in the Cayman Islands which might be less relevant to other societies. The approach to the issue in Cayman may therefore be different to the approach in other jurisdictions, but by no means less legitimate.