The Panama Papers represented an unprecedented leak of 11.5 million files from the database of the world’s fourth biggest offshore law firm, Mossack Fonseca. The cache of documents, which detailed information for more than 214,488 offshore entities, highlighted myriad ways in which the rich use secretive offshore tax regimes.

Obtained from an anonymous source by the German newspaper Süddeutsche Zeitung, the leak was subsequently shared with the International Consortium of Investigative Journalists (ICIJ). When published in early 2016, it caused an international sensation – leading to calls for greater international financial transparency.

As the Irish member of the ICIJ, The Irish Times reported extensively on the Irish links to the documents under the headline “Global leak reveals secret offshore activities of world leaders and stars”. A separate story on the same day, April 4, 2016, disclosed that the Panama Papers revealed the involvement of an Irish-registered company in the international arms trade.

On April 7, 2016 The Irish Times published a further article based on the Panama Papers under the headline “Mossack Fonseca’s Irish clients came from all walks of life”.

One of those named was Dermot Desmond, the billionaire Irish financier and dealmaker. A picture of Desmond accompanied the piece.

The following day, Desmond’s lawyers send a letter to The Irish Times.

Almost four years later, the legal battle between the two sides continues. Desmond claims the publication was a clear breach of his privacy and also suggested he was involved in suspicious transactions designed to hide wrongdoing and rogue transactions intended to hide money or assets.

The Irish Times rejects the claims, arguing that it was published in the public interest and did not mean what Desmond argues it means.

The case has now reached discovery, with The Irish Times being told by the High Court to hand over a number of documents it claims were confidential.

The looming High Court battle will test Ireland’s embryonic privacy laws, as well as the issue of the public interest. It will also pit one of the country’s richest men against one of its most respected media titles.

This is the story, so far, of the battle between Dermot Desmond and The Irish Times.

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Claims, counter-claims and comments

A new High Court judgement, written by Mr Justice Maurice Collins, sheds new lights on the case – and the areas of clash between the two sides. Much centres on a Panamanian company called Ard International Inc.

According to the judgement, Ard International had issued bearer shares in June 2005. Bearer shares were company shares that belong to whoever has them and were being done away with in most jurisdictions because of concerns over transparency. The Irish Times article stated that, at the same time as deciding to issue those bearer shares, the company’s directors (employees of Mossack Fonseca) granted a general power of attorney over its affairs to Desmond.

It added that the files included a note from Desmond from November 2005 asking the directors to grant power of attorney to two Swiss lawyers, resigning as attorney and asking the directors to destroy the documents associated with his appointment and resignation. The article noted that it was not known what business – if any – had ever been conducted by Ard International and stated that a “spokesperson for Desmond said he did not want to comment”.

The article added that Desmond and another well-known business person referred to in the article were “active in international investments and are not tax-resident in this jurisdiction, and it is not surprising that they might show up in the files of a major law firm that provides global services”.

The response was immediate. Suzanne McNulty, described in court papers as Desmond’s general counsel, wrote to The Irish Times on Desmond’s behalf asserting that the article breached his rights to privacy and confidentiality and was not justified by any public interest and also that the publication had caused damage to Desmond’s reputation.

The then editor of The Irish Times Kevin O’Sullivan responded, denying that the article breached any of Desmond’s rights and emphasising the public interest relating to the international financial services system.

In particular, it focused on the quote attributed to Desmond spokesman. McNulty indicated that she was the spokesperson concerned and complained that the statement in the article was not accurate. She said the comment provided to Colm Keena, an award-winning Irish Times journalist, on 29 March 2016, said: “Please note that it is not our policy to comment on enquiries about Mr Desmond’s personal affairs, which are private and conducted properly in compliance with the law.”

According to the High Court judgement, McNulty “complained that these words had been twisted to imply that Mr Desmond had something to hide. The letter concluded by asking for the publication of an ‘unequivocal apology’ to Mr Desmond.”

The then editor of The Irish Times Kevin O’Sullivan responded, denying that the article breached any of Desmond’s rights and emphasising the public interest relating to the international financial services system. He said The Irish Times had “made clear at all times that it is legal and can be used for legitimate business purposes” and the article had made clear that the use of the services of Mossack Fonseca was “perfectly legal”.

There was further correspondence between the two parties, but no resolution was reached. Desmond issued proceedings on July 11, 2016.

“Serious wrongdoing” and “rogue transactions”

Desmond’s statement of claim outlines his grievances, and there are many (all denied by The Irish Times). Documents opened before the court state that Desmond claimed that “this unprecedented breach of lawyer-client confidence had occurred as a consequence of a ‘hack’ of the law firm’s email server.” He also pleads that The Irish Times was aware that it was confidential between the firm and its clients, had been unlawfully obtained and procured illegally.

Desmond also claims that the coverage was defamatory and had the meaning that Desmond was involved in “suspicious financial transactions designed to hide some type of serious wrongdoing”.

According to the recent High Court judgement: “In its defence, The Irish Times denies that it was aware that the material complained of by Mr Desmond was obtained unlawfully and does not admit that the material was in fact so obtained. It denies any involvement in any unlawful removal of information and documents from the firm’s offices, denies that the information was confidential and pleads that the published information was originally supplied to the German newspaper Süddeutsche Zeitung, which it shared it with other news outlets, including The Irish Times, through the ICIJ.”

In his statement of claim, Desmond also claims that the coverage was defamatory and had the meaning that Desmond was involved in “suspicious financial transactions designed to hide some type of serious wrongdoing, that he was involved in rogue transactions intended to hide money or assets”.

[The claim about ‘rogue transactions’ stems from a separate but related article. Readers of the Irish Times website at the time could see a video which gave further background and provided a link to a special website set up by the ICIJ which, according to Mr Desmond, carried a banner headline “THE PANAMA PAPERS Politicians, Criminals and the Rogue Industry that Hides their Cash.”]

Desmond also claimed the articles had the meaning that “there was something improper or sinister” about his financial affairs he was anxious to conceal, and that right-thinking members of society sought to regard him with suspicion and disdain as a result of how he conducted his financial affairs.

The financier also claims the article “infringed his right to privacy in his business and financial affairs” and that no public interest justified the publication.

It is also pleaded that the “gratuitous nature of the publication” and the way in which Mr Desmond’s name and photograph had been so prominently published aggravated the hurt, upset and damage caused to him.

In relation to Desmond’s claim that the paper owes him a duty of confidence (which it denies), it argues that his interest is outweighed by the public interest in publication.

In its defence, The Irish Times admits publication but denies that the article was defamatory of Desmond and denies the pleaded meanings. It also pleaded that the articles had qualified privilege under the Constitution as they were in the public interest.

According to the paper’s pleadings: “The article was published in good faith and in the course of and for the purpose of, the discussion of a subject of public interest, the discussion of which was for the public benefit, namely the growth of offshore tax and regulatory havens. The Defendant pleads that in all the circumstances of the case, the manner and extent of publication did not exceed that which was reasonably sufficient and it was fair and reasonable to publish the statement. The article constituted fair and reasonable journalism on a matter of public interest.”

In relation to Desmond’s claim that the paper owes him a duty of confidence (which it denies), it argues that his interest is outweighed by the public interest in publication.

It said Desmond is a public figure with a high public profile “in part through having given evidence to two tribunals of inquiry about payments to politicians”. The reference to this claim is stated in the High Court judgement, although Desmond had long denied any wrongdoing.

Once the two sides had set out their case, the issue then turned to the matter of discovery.

The discovery battle

In September 2018, Desmond’s solicitors wrote to The Irish Times seeking voluntary disclosure of a range of documents. The Irish Times is objecting to many of these.

Mr Justice Collins broke down the request for discovery into four separate areas.

Category 1. This relates to all documentation supplied to The Irish Times – either from the ICIJ, the Süddeutsche Zeitung or otherwise – relating to Desmond and forming the basis for one of the articles referring to him in the newspaper.

Desmond’s lawyers claim he has been unable to access his own files relating to the company affairs held by Mossack Fonseca as the firm is no longer in existence. In correspondence opened before the court, it claims that Desmond requires the documents to prove his case and to “establish that the documents do not disclose any illegality, wrongdoing or other morally reprehensible behaviour that might legitimately justify publication in the ‘public interest’ as claimed” by The Irish Times.  

An affidavit by Deirdre Veldon, the deputy editor of The Irish Times, sets out The Irish Times‘ position. Veldon said that no documents were provided to The Irish Times by the Süddeutsche Zeitung and that the documents provided by the ICIJ have since been destroyed. She states that documents in the ICIJ archive are not within the paper’s power and, in any event, they are “protected by journalistic privilege”.

She asserts that Desmond clearly intends to use discovery as a means to investigate the original source of the documents emanating from Mossack Fonseca and that it would not be appropriate to grant discovery. She also claims that the request is a “fishing expedition”.

Mr Justice Collins ruled that the discovery was relevant as necessary because a key issue “in the proceedings is whether it is fair and reasonable to publish the article complained of”.

He ruled: “It is clear from Mr Desmond’s statement of claim that he is contesting the decision to publish an article based on (confidential) information relating to him, which information (he says) did not disclose any wrongdoing on his part and which article (he says) was defamatory of him by effectively connecting him in the public mind to the unlawful activities disclosed by the Panama Papers. Mr Desmond also relies on these facts (as he says they are) for the purposes of seeking aggravated and/or exemplary damages.”

He added: “It seems to me that it is relevant for Mr Desmond to know what material relating to him was provided to The Irish Times. What material was available, what material was selected for inclusion in the article the subject of the proceedings and what material it was decided to omit are all matters which potentially bear on the fairness and reasonableness of the publication and thus on The Irish Times’ section 26 defence in these proceedings.”

Category 2: Desmond’s legal team sought all documentation concerning efforts make to contact with the financier for comment, including notes of any discussions. In addition, Desmond sought notes relating to any editorial decisions for the story.

Desmond’s lawyers sought these documents on the grounds that they believed the statement provided to The Irish Times by Desmond’s legal counsel had not been published in full.

In her affidavit, Veldon said The Irish Times had no other documents in its possession other than the email that Desmond’s team already had. Over the course of legal argument, Desmond’s lawyers proposed limiting the amount of documentation being sought to the correspondence between the two sides and any notes of editorial decisions concerning “the response to the plaintiff’s spokesperson”.

The judge ruled that there was no evidence that there was any more correspondence between the two sides than the two emails, so did not make an order for further discovery there. However, in relation to the issue of editorial decisions, the judge said the issue was relevant as it concerned whether the statement provided by McNulty was fairly reported.

According to the judgement: “It would [of] course be open to Mr Desmond and his legal team at trial to conduct an exercise of comparing the relevant part of the article with the statement provided by Ms McNulty. However, it appears to me that the editorial decision that resulted in Mr Desmond’s position being recorded as it was is in itself relevant to the issue of whether it was fair and reasonable to publish the article in the form in which it was published and, given that discovery is the only means by which information regarding that decision can be obtained by Mr Desmond, I consider it appropriate to direct discovery…”

Category 3: Desmond’s legal team sought all documentation held by The Irish Times as “to the origins of the Panama Papers” and specifically, the data/files/documents received by The Irish Times relating to Desmond and/or his companies.

Desmond’s team claimed that The Irish Times “was at all times fully aware” that the files and documents referred to in its article had been unlawfully taken from Mossack Fonseca, something that was denied by the newspaper.

In the course of his submissions, lawyers for The Irish Times indicated that the paper would be willing to make discovery of this category, subject to it being revised so as to read as follows: “All documentation recording the knowledge of the defendant, its servants or agents as to the origins of the Panama Papers that relate to the plaintiff or his associated companies.”

Category 4: The financier sought all documentation relating to any discussion or communications between The Irish Times and other journalists (including members of the ICJI) and/or with persons who supplied the paper with the leaked material that was relevant to Ireland and Desmond.

In their letter seeking discovery, Desmond’s team made reference to The Irish Times’ claim that the publication was in the public interest and to the article published by The Irish Times on April 9, 2016, saying it had been involved “in a process of sifting through the material and potentially engaging in real time chat with other journalists and members of the [ICIJ] and with a view to identifying what material might be ‘in the public interest for your country’.”

The Irish Times objected on five grounds:

  1. that the question of whether the published material was published in the public interest is fundamentally a question of law, to which discovery is irrelevant;
  2. that there are no documents because any communication took the form of “real-time chat” on a website which did not generate documents or records;
  3. that any documents in this category would be protected by journalistic privilege; and
  4. the documents were not relevant or necessary to deciding the issues between the parties.

The judge ruled that this category was not relevant to any of the issues arising in the case, and agreed with The Irish Times that the “issue of whether publication of the disputed article was (as The Irish Times asserts) in the public interest, is a matter for assessment by the court”.

The judge added: “The subjective views of The Irish Times itself, and/or of other members of the ICIJ involved in the Panama Papers exercise, do not appear to me to be relevant to that assessment. Secondly, and in any event, this aspect of the application must fail because it is wholly speculative. I am effectively asked to infer that other members of the ICIJ had an input into the decision of The Irish Times to publish the article the subject of these proceedings. There is no basis for any such inference in the material that has been put before me.”

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The matter will return to court in the coming months, ahead of a full hearing. Like other defamation cases, it will be subject to a jury trial.

The two sides have outlined their position. Desmond believes his privacy has been breached and that the articles falsely accused his of wrongdoing. The Irish Times maintains the article was in the public good and shined a light on offshore structures.

Amid the chasm between plaintiff and defendant, it will be up to a jury of citizens to decide who is right.