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  1. Media Law
March 18, 2009

Guardian Barclays gag continues after secret hearing

The Guardian will have to wait until tomorrow morning to find out whether it can publish seven leaked documents detailing the alleged tax avoidance measures adopted by Barclays Bank’s structured finance department.

In the second day of a High Court hearing in London today, the newspaper argued that the documents are now in the public domain after already appearing on The Guardian website – and being copied elsewhere on the web – and so cannot be the subject of an injunction.

Journalists were excluded for almost two hours of today’s three-hour hearing after Mr Justice Blake agreed to hold part of the hearing in private.

And the injunction has been extended to prevent the Guardian from inciting others to read about the documents elsewhere. It reads: “The defendant shall not whether directly or indirectly incite or encourage others to publish the documents.”

The Guardian revealed in the paper this morning that 127 people had accessed the files before the injunction forcing the paper to remove the files was imposed at 2.30am yesterday morning.

In written testimony to the court, published by The Guardian, editor Alan Rusbridger said: “I considered these documents to be of the highest significance in the debate about tax avoidance.

“They revealed at first hand the processes involved in structuring extremely complex and artificial tax avoidance vehicles; how lawyers and accountants worked together to exploit loopholes in government legislation; and the degree to which they are sanctioned at the highest levels within Barclays.”

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In the open court session, Hugh Tomlinson QC, representing the Guardian, said: “This information no longer has the necessary quality of confidentiality because of the publication that has already taken place.”

He added that the information contained in the documents was “at the lower end of confidentiality spectrum” and said there was no evidence of any specific harm being caused by the publication.

“The only damage they can identify is general abstract damage, no specific losses,” he said.

He added that the documents were “historic” and that there was no suggestion any current transaction could be prejudiced by publication.

“We are not saying that these documents reveal illegal conduct. We are not saying that these documents reveal wrongdoing,” Tomlinson told the court.

Charles Hollander QC for Barclays said: “They [The Guardian] accept that the information was confidential and was leaked in breach of contractual duties.

“We now know that some people saw it on The Guardian website and it’s now available elsewhere only as a result of that. It is an unattractive consequence of what The Guardian did.”

Mr Justice Blake said he would reach his decision by 9.30am tomorrow and in the meantime “the status quo will continue” – meaning that The Guardian remains barred from publishing the contentious documents.

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