Landmark case finds that Jersey law “represents a barrier to justice”

Thursday 28 March 2024

A landmark case has found that a Jersey law passed in 2018 “represents a barrier to justice” – despite the Law Officers’ Department claiming that it raised “no human rights issues” at the time.

The Court of Appeal has made a formal declaration that the International Co-operation (Protection from Liability) (Jersey) Law, introduced in 2018, is incompatible with the European Convention on Human Rights, following a successful challenge brought by Imperium Trustees (Jersey) Ltd in a tax information exchange case.

The court noted that, when the law came to the States, a note from the LOD “which curiously is described as not providing legal advice, signally does not address the matters which have become apparent in the course of argument before us”.

It continued: “[The note] is not a correct statement of the legal position. In the circumstances, it is hardly surprising that there was no debate on those issues.

"Where, as here, it is apparent that the legislature has neither been advised of the convention rights issues which arise, nor appears to have considered the underlying substantive issues which would require to be addressed to determine whether any interference with convention rights is justified.”

It adds: “It is very hard to accept that the legislature has balanced the various factors on either side and made an informed political choice that the impact on convention rights is justified by the particular needs of the island’s community.”

The case brought by Imperium Trustees Ltd concerned an order to disclose confidential information under a tax information exchange agreement which they subsequently successfully appealed against.

But they were unable to recover their costs because of the 2018 law.

Intended to ensure that public authorities are not deterred from international co-operation because of the fear of any financial consequences, the law specifically protects those authorities from legal costs even if they lose a case in court, something which the Appeal Court said effectively restricted access to justice.

Those pursuing appeals faced the prospect of paying costs if unsuccessful, while equally knowing that, if they won, they would be unable to recover those costs.

Giving the court’s judgment, Paul Matthews – who was sitting with president Sir William Bailhache and the Rt Hon James Wolffe – recognised that this might not prove a restriction for well-financed corporations managing the affairs of the wealthy. 

But he continued: “There is nothing in the 2018 law to confine the costs rule to such parties. It may, for other potential applicants, represent a very significant barrier to access to justice. The argument before us proceeded on the basis that the 2018 law concerned only judicial review of tax information requests.

"But that is palpably not the case; and for potential appellants against other administrative directions, for example, of the Jersey Financial Services Commission or the Jersey Competition Regulatory Authority, it may be especially true that the 2018 law represents a barrier to access to justice.”

The court’s declaration that the law is incompatible with the European Convention on Human Rights has no immediate impact on the legislation, and Imperium remain unable to secure their legal costs.

But Mr Matthews said it was right that the court’s view should be authoritatively stated “in order that the legislature can consider if it thinks fit whether the 2018 law should be amended or repealed”.