Demanding public disclosure creates more problems than it solves

‘Opening up everyone’s cupboards in the expectation that it will make everything better’ is not only wrong, but naïve and potentially damaging to clients, according to James Quarmby of law firm Stephenson Harwood.
Quarmby was speaking at the Jersey Finance Private Wealth Conference about the increasing drive for transparency in international finance and the tension caused in relation to data protection and a client’s right to privacy.

“There is a huge human rights element to the common reporting standard,” he said. “The view of many political commentators is that transparency will make everything better – but what about privacy?”

Earlier at the conference, where Moore Stephens was involved as a sponsor, Jersey Finance’s Geoff Cook had highlighted the case of actor Emma Watson, who had been caught up in the Panama Papers incident. Watson had used a trust structure in order hold ownership of a property, ensuring that the identity of the property’s owner remained private – an important factor for a popular and well know young celebrity.

The structure was disclosed and there was no tax benefit to this, but still the public perception, because of the data leak, was negative.

Quarmby highlighted that this right to privacy was important to many families, and that publication of information such as this could be exceptionally damaging, and sometimes actually dangerous.
Siobhan Riley, a partner at Carey Olsen, put forward the case for the Jersey way: “We gather information, keep it securely – and we disclose it when necessary, complying as we always do with international standards.” There was no need for Jersey to go further, and the island’s finance sector should stand its ground on reporting. In some ways the introduction of GPDR will give families more protection. “It will hopefully put the brakes on the culture of oversharing we have at the moment,” she said.