Data Protection Bill [HL]

Lord Pannick Excerpts

Report: 2nd sitting (Hansard): House of Lords
Wednesday 13th December 2017 Lords Chamber

Moved by

[Lord Pannick]

48: Schedule 2, page 138, line 44, at end insert—
“Confidential trust information
The listed GDPR provisions do not apply to personal data in respect of which the controller is (or acts as agent or confidential adviser to) a trustee or other officer of a private trust to the extent that the data consists of information—(a) which records any person’s deliberations about the manner of exercise of a power or discretion under that trust, (b) which discloses any person’s reasons for any particular exercise of such power or discretion, or(c) upon which such deliberations or reasons were or might have been based.”

[Lord Pannick (CB)]

Amendment 48 is in my name and the name of the noble and learned Lord, Lord Walker of Gestingthorpe. It concerns the law of trusts, and I should mention, as the noble and learned Lord is unlikely to do so, that for many years he was the leading trusts practitioner at the Bar. During his career on the Bench, including in the Appellate Committee of this House, in the Supreme Court and in the Judicial Committee of the Privy Council, he gave many of the leading judgments that define the modern law of trusts.

I declare a much more modest interest as a practising barrister. I am not a specialist in the law of trusts but, as I explained in Committee, I know that the law has long recognised that a trustee is not obliged to disclose to a beneficiary the trustee’s confidential reasons for exercising or not exercising a discretionary power. The law recognises that if the trustee were to have such a duty of disclosure it would impede the trustee’s ability to perform his or her function, the effective exercise of which depends on confidentiality. The public interest is protected because the court has an inherent jurisdiction to supervise and, where appropriate, to intervene in the administration of trusts.

A recent Court of Appeal judgment, Dawson-Damer v Taylor Wessing, has prompted a concern of trust practitioners about the applicability of data protection law in this context. I have received powerful representations on this subject from the Trust Law Committee, which is a group of leading academics and practising lawyers. One of its concerns is that in other jurisdictions, such as Jersey, the data protection legislation contains express statutory restrictions on the right of a data subject to make a subject access request where that would intrude on the principle of confidentiality. Those who practise in this area are very concerned that offshore trusts, and offshore professionals providing trust services, are already actively encouraging the transfer of trusts business away from this jurisdiction because of data protection concerns. The irony in this is that data protection law may be driving trust business towards less transparent offshore jurisdictions.

The noble and learned Lord, Lord Walker, and I, accompanied by other trusts lawyers, had the benefit of a very helpful meeting with the Minister—the noble and learned Lord, Lord Keen—and members of the Bill team. I am extremely grateful to them for the very constructive discussions we had. I very much hope that the Minister, when he replies to this short debate—I hope it will be short—will be able to confirm three matters.

The first is that the Government understand and are sympathetic to the concerns raised by the Trust Law Committee, which I have just summarised. The second matter, which I hope the Minister can confirm, is that the Government’s view is that article 15(4) of the GDPR, which states that the right of access,

“shall not adversely affect the rights and freedoms of others”,

applies in this context to protect the confidentiality principle. The third matter, to which I hope the Minister will be able to respond, is that if that view is shown to be erroneous in future litigation—I anticipate the Government do not believe this will be the case, but if it were to occur—I hope the Government would consider using the delegated powers conferred by this Bill to enact a specific and express exemption. I recognise, of course, that the Minister will be unable to commit the Government to any future course of action. I hope that the Minister will be able to respond positively on those three matters. They would go a long way to alleviating the concerns of trusts lawyers. I beg to move.

[Lord Walker of Gestingthorpe (CB)]

I have added my name to the amendment proposed by my noble friend Lord Pannick, and I shall say a few words in support of it. I do not want to repeat any of the points my noble friend has made, but I shall say a little bit about the practicalities of the documents that are likely to be the subject of data access requests by a disappointed beneficiary who wants to circumvent by the use of these powers the traditional confidentiality of discussions between trustees, even if put down on paper, which has been established in English law for about 50 years or more.

Discretionary trusts are still very common—surprisingly, in a way, given the increasingly complex inheritance tax provisions that affect them. I am talking about trusts with English law as the proper law and trustees resident in this country, who pay all the income tax, capital gains and inheritance tax that is due from them from time to time. In my experience, trustees of long-term discretionary trusts are often not solicitors or accountants but friends or acquaintances—reliable people trusted by the settlor with important discretions. Solicitors and accountants are, of course, involved, but they get their fees for professional advice. The trustees themselves generally get no remuneration for taking on what are sometimes huge and increasingly worrying responsibilities.

Discretionary trusts commonly confer wide discretions over both the disposition of income and the eventual destination of capital—usually it is a trust over income and powers over capital, but I need not go into those technicalities. Often, there will be a large class of beneficiaries who can be the objects of the exercise of the trustees’ discretion, typically a settlor’s children and remoter issue, very often their spouses or some remoter relatives or friends—named, of course, rather than just left as “friend”—and named employees and retainers. All those beneficiaries are, in a sense, in competition with one another. They do not, of course, seek favours from the trustees, but the fact is that the trustees sometimes have to exercise very difficult decisions on how to spend resources.

It is the duty of the unremunerated trustees to keep themselves fully informed about the beneficiaries. They have to take account of births, deaths, marriages, separations and divorces; of success or failure in education, and in business or professional life; of disability or injury—and sometimes, sadly, of beneficiaries who have become addicted to drink, drugs or gambling. So let us imagine trustees of a discretionary trust who meet once or twice a year to consider how they will distribute income and whether they will distribute capital in the course of that year, or six months. In a sense, all the beneficiaries are in competition, and inevitably the confidential minutes of the trustees’ deliberations will record how the trustees approached those competing demands and how they measured up, as they have to in a sense, the claims of one beneficiary rather than another on the settlor’s bounty. It is a consideration by the trustees collectively of all the competing claims on the settlor’s bounty, yet the data subject, to use the phrase in the Bill, who will in this case typically be a disgruntled and disaffected beneficiary, is entitled to information about the data subject himself or herself alone. That is fundamental to how the provisions work, which is underlined by paragraph 14 in Part 3 of Schedule 2, which relieves the data controller, who in this case will be the solicitor or accountant who keeps the trust records,

“to the extent that doing so would involve disclosing information relating to another individual who can be identified from the information”.

If one looks at the practicalities, the likelihood is that those confidential minutes would have to be so savagely redacted with the censor’s blue pencil as to be barely comprehensible—certainly, not giving any sort of true picture of how the trustees had operated. Redaction would be troublesome and oppressive to the trustees, but even more oppressive—and I come back to the central point made by the noble Lord, Lord Pannick—is the fact that the trustees, who are typically unremunerated and doing their best to do what is sometimes a very difficult job, would be compelled to disclose what was not redacted to the disaffected beneficiary: the data subject. For those reasons, which I have briefly given, and all the reasons given by the noble Lord, Lord Pannick, I support the amendment.

[The Advocate-General for Scotland (Lord Keen of Elie) (Con)]

My Lords, I begin by thanking the noble Lord, Lord Pannick, and the noble and learned Lord, Lord Walker of Gestingthorpe, for taking the time to meet me and officials to explain in detail the concerns following the debate in Committee. The question about the interaction of the fundamental principles of trust law and the GDPR is a valid one that we understand, and which deserves a response.

In Committee, my noble friend the Minister conveyed that it is not our intention to compel trustees to disclose the kind of information described in the noble Lord’s amendment. The Government both understand and are sympathetic to the noble Lord’s concerns in this respect.

Article 15 of the GDPR confers a general right for a data subject to seek access to personal data held by a controller, but there are a number of exemptions, set out directly in both article 15 and in Schedule 2 to the Bill. The amendment of the noble Lord, Lord Pannick, seeks to add an additional exemption to Schedule 2 to preserve the confidentiality of trustees’ decision-making and to minimise the risk of disagreement between beneficiaries and trustees, to which the noble and learned Lord, Lord Walker, referred. The Government’s position remains that article 15(4) of the GDPR already prevents the disclosure of the material the noble Lord’s amendment is concerned with. This is because the Government consider that the,

“rights and freedoms of others”,

referred to in article 15(4) includes the rights of both trustees and other beneficiaries. Where disclosure under data protection law would reveal information about a trustee’s deliberations or reasons for their decisions that would otherwise be protected from disclosure under trust law, the Government’s view is that disclosure would adversely affect the rights and freedoms of trustees and beneficiaries in the trustees’ ability to make independent decisions in the best interests of the trust without fear of disagreement with beneficiaries.

While I appreciate the noble Lord’s concerns, rushing to codify what in trust law is generally referred to as the Londonderry principle would, we consider, be a disproportionate step. The wider potential risks and unintended consequences involved mean that pre-emptive action in this area, far from clarifying the position, might actually confuse it. Should the law be tested after Royal Assent and found wanting—which, I stress, the Government do not expect to happen—the delegated power in Clause 15(1) allows the Secretary of State to bring forward regulations to correct this. By that point it will be much clearer what deficiency, if any, has in fact been identified in the law and we would expect a Government to consider those powers in such circumstances. I hope that is a full and adequate response to the three points the noble Lord, Lord Pannick, made. In those circumstances, I invite him to withdraw the amendment.

[Lord Pannick]

I am very grateful to the Minister. He has responded positively to each of the points that I made. I know that the House is anxious to move on to reaffirming freedom of speech. Therefore, I will say no more other than to beg leave to withdraw the amendment.

Amendment 48 withdrawn.

--- Later in debate ---

[Lord Lester of Herne Hill (LD)]

My Lords, we had rather strong debates in Committee and I am not going to repeat any part of those. I have thought about how I could best help the House at this stage, and I think it is by stating what I believe the law to be and why Amendment 50A, if carried, would put the Bill in breach of the Human Rights Act and the European Convention on Human Rights.

When the Bill was first introduced, the Minister certified, as is required under the Human Rights Act, that in his view it was compatible with the convention rights; those being the right to free speech, the right to personal privacy and the right to equal treatment without discrimination. The amendments that the noble and learned Lord, Lord Keen, has introduced in this group would pursue the convention rights and, if carried, as I hope they will be, make sure that the Bill continues to be compatible with the convention rights.

In the light of the speech by the noble and learned Lord, Lord Brown, it would be quite unnecessary and wrong for me to go through the relevant law in any detail. But perhaps I can help the House a bit by giving a very brief summary of why I consider the government amendment compatible, and the amendment put forward by the noble Baroness, Lady Hollins, or those supporting Hacked Off and all the rest, incompatible.

The position is this. Article 10 of the convention protects the right to free speech and freedom of the press, subject to necessary and appropriate exceptions. One exception is, of course, personal privacy, which is guaranteed by Article 8 of the convention. The test the convention uses, as interpreted by the European Court of Human Rights, is a pressing social need test. The starting point is free expression and any restriction or limitation on that right must be in accordance with legal certainty and must be proportionate. The Human Rights Act requires that all legislation, old and new, including this Bill, must be compatible with the convention rights. It also requires courts to read and give effect to the convention compatibly with those rights.

Together with the noble Lord, Lord Pannick, I edited a textbook, the third edition of which we published in 2009. It has a whole chapter on free speech and another on privacy. What I am trying to summarise now, we spelled out in that large textbook some years ago. I am trying to help the House by giving a legal opinion on what I consider the law to be. I very much hope that the noble and learned Lord, Lord Keen, will correct me if I have got it wrong in any respect, because the House needs to know that if it were to support Amendment 50A, it would, in my view and that of the noble and learned Lord, Lord Brown, put the Bill in breach of the convention and the Human Rights Act. The Minister could then no longer certify that it was compatible with the convention rights.

[Lord Pannick]

My Lords, I declare an interest as the co-author with the noble Lord, Lord Lester, of Human Rights Law and Practice, available in all good bookshops. I declare an interest also as a practising barrister. I have represented newspaper groups many times in relation to privacy and freedom of speech issues, but I have also represented individuals complaining about breaches of their privacy—individuals as diverse as Max Mosley and Her Majesty the Queen. Noble Lords may remember that the contents of Her Majesty the Queen’s breakfast tray were disclosed in the Daily Mirror by a footman who was, in truth, a foot-in-the-door man from that paper. I speak, therefore, from legal experience.

I agree entirely with what was said by the noble Lord, Lord Lester, my noble and learned friend Lord Brown of Eaton-under-Heywood and my noble friend Lord Colville. We should be very slow indeed to limit the scope of the exemptions for journalists and in relation to academic, artistic and literary material. Without these exemptions, as defined in government Amendment 50, journalists cannot do their job effectively: you cannot investigate child sex abuse in Rotherham, corruption in Tower Hamlets or any of the other examples that have been given if those you are investigating are entitled to see the data you are processing that relates to them. Such data may not be “necessary” but it may be material that needs to be retained and published. It is as serious as that.

These are not theoretical concerns. Earlier this year, Mr Justice Popplewell dismissed a claim by James Stunt, a businessman who was married to one of Bernie Ecclestone’s daughters. Mr Stunt complained about a number of articles in the Daily Mail and the Mail on Sunday, claiming rights under the Data Protection Act 1998. The judge dismissed the claim, stating in paragraph 56 of the judgment that journalism would be discouraged or impeded,

“if the subject had access to the detailed extent or direction of the investigation, of the information gathered or of the intended story”.

That is right. In my view, government Amendment 50 adopts the right approach with its focus on the reasonable belief—not any belief, but the reasonable belief—of the data controller that publication is in the public interest.

It gives me no pleasure to say that many of the amendments in this and the next group are not concerned with promoting the ability of journalists and others to carry out their essential functions under Article 10 in relation to freedom of speech and freedom of information. They pursue a different agenda: either to encourage newspaper groups to join Impress as their regulator or to punish the press for the wrongdoing of some of its members. I say to noble Lords that that should not be the concern of this Bill, which should focus on protecting freedom of information in relation to data.

I cannot agree with manuscript Amendment 50A. It would provide a field day for those seeking to impede academic work, artistic and literary expression, and journalism that they do not welcome. It would inevitably create a chilling effect on work in academia, the arts, literature and journalism. I simply do not understand how a necessity test would work. When the journalist, the academic or the artistic or literary individual is conducting the processing, they cannot know whether it is necessary for future publication—they may reasonably believe that it will be or that it may be, and that is enough. Manuscript Amendment 50A, if accepted, would seriously damage freedom of expression in this country. As the noble Lord, Lord Lester, said, it would be a blatant breach of Article 10 of the European Convention on Human Rights.