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Industry Updates

The Confidential Information Disclosure Law, 2016

12 Aug 2016

The Confidential Information Disclosure Law, 2016 (the "CIDL") was gazetted on 22 July 2016 and is in effect.  The CIDL has been under consultation in the Cayman Islands for a number of years and has been enacted to dispel the misconception that the Cayman Islands is a secrecy jurisdiction.  The CIDL better reflects the principles of transparency and cooperation which the Cayman Islands has committed to for well over a decade, including for tax information exchange and mutual legal assistance. 

Repeal of CRPL 

Amongst other things, the CIDL repeals the Confidential Relationships (Preservation) Law (2015 Revision) (the "CRPL"), which has been in force since 1976.  In essence, the primary purpose of CIDL was merely to remove the criminal sanctions that attached to the disclosure of confidential information under the CRPL.  

The main objective of the CRPL was to highlight the different ways that confidential information could be disclosed without breaching the offence provisions, including: (i) the codification of some of the common law exceptions to the duty of confidence; (ii) by compulsion under specific Cayman laws; and (iii) seeking the court's direction for disclosure in proceedings. 

Disclosure of Confidential Information 

These sections continue in force under the CIDL, and exceptions to the duty of confidence include disclosure of confidential information in the normal course of business, with the implied or express consent of the principal, where such disclosure is compelled under law to a specific authority, and upon direction of the court pursuant to an application under CIDL. 

Any breach of the common law duty of confidence shall still give rise to a right of remedy, including a claim for damages or an injunction.  Furthermore, offence and penalty provisions shall also exist for the unauthorised obtaining or disclosure of a data subject's personal data under new data protection legislation that is currently under final consultation. 

The CIDL defines "confidential information" as information, arising in or brought into the [Cayman] Islands, concerning any property of a principal, to whom a duty of confidence is owed by the recipient of the information.  The term duty of confidence is not defined, but will be interpreted in accordance with common law at the time. 

Section 4 Applications 

As with the CRPL, the CIDL retains the ability to seek the court's direction where confidential information is to be given as evidence in relation to any proceeding, whether within or outside of the Cayman Islands.  Many of the conditions and much of the jurisprudence in relation to these applications will continue to apply, but the CIDL makes provision for the ability to amend the Grand Court Rules in relation to the procedures for making these applications. 

Expected Evolution of Statutory Confidentiality and Data Protections 

The CIDL was expected to be introduced in tandem with the enactment of a data protection law in the Cayman Islands.  Accordingly, there may still be some comments from the industry to be taken into account in order for the two laws to align, which may result in further amendments to the CIDL in due course.

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