Court of Appeal rules on beneficiaries’ rights under the Data Protection Act

The Court of Appeal, allowing an appeal under the Data Protection Act 1998 (DPA) on 11 March 2020, ordered the international law firm Taylor Wessing to hand over documents containing personal data about the beneficiaries of a multi-million-dollar fund in the Bahamas. It held that the international law firm, which acts for the fund’s trustee, could not rely on privilege because, under English law, beneficiaries enjoy joint privilege with their trustees in respect of advice taken by the trustees for the benefit of the trust.

In the case of Dawson-Damer v Taylor Wessing [2020] EWCA Civ 352, the claimants were Mrs Ashley Dawson-Damer and her children Piers and Adelicia, who were (or had been) beneficiaries of certain Bahamian trusts. They had discovered that substantial funds had been paid out of one of the trusts for the benefit of other beneficiaries, potentially in breach of trust.

Before issuing breach of trust proceedings in the Bahamas, they served Subject Access Requests under the DPA on a number of people connected to the trust, including individual fiduciaries and law firm Taylor Wessing, which acted for both the individual fiduciaries and the trustee.

The appeal arose from a judgment that Andrew Hochhauser QC, sitting as a Deputy High Court Judge, handed down in May 2019, in respect of two principle questions: whether trustees can maintain legal professional privilege (other than litigation privilege) against beneficiaries; and whether paper files are a “relevant filing system” for the purposes of the DPA and need not be searched for the personal data of a person who submits a Subject Access Request.

At first instance, the court held that the effect of s.83(8) of the Bahamian Trustee Act 1998, which enables a trustee to refuse to disclose information concerning the exercise of its fiduciary discretions, was to remove joint privilege as between a trustee and a beneficiary. It therefore entitled Taylor Wessing to rely on the exemption for legally privileged material under paragraph 10 of schedule 7 DPA.

The Court of Appeal disagreed: “In our view, ‘joint privilege’ arises as a matter of procedural law rather than trust law and its scope therefore falls to be determined on the basis of domestic principles rather than Bahamian law. It follows that the Bahamian Trustee Act is of no significance.”

The Court confirmed the principle that under English law a beneficiary is in a position of joint privilege with a trustee and that personal data sought by a trust beneficiary under a subject access request under the DPA cannot be withheld on the grounds of legal advice privilege belonging to the trustee. Only in circumstances where privilege can be asserted under English Law will the privilege exemption be available as a basis for non-disclosure.

The decision means that Mrs Dawson-Damer will now receive further data which was previously incorrectly withheld on the grounds of privilege. However, the Court of Appeal also allowed a cross-appeal concerning the status of certain paper files which it held do not constitute a ‘relevant filing system’ under the DPA.

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