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Rio Tinto v. Vale: UK High Court protects identity of whistleblowers

The issue of whether the identities of confidential sources for business intelligence reports should be protected from disclosure in civil litigation was the subject of a High Court decision in London yesterday arising from ongoing proceedings in New York.

In New York-based civil RICO proceedings, Rio Tinto plc alleged that the loss of its Guinean iron ore concessions was due to a fraudulent conspiracy between Vale and its joint venture partner. As part of pre-trial disclosure, Vale, which denies the allegations, obtained reports commissioned by Rio containing confidential business intelligence on the contemporary political and commercial situation in Guinea.

By imputing the knowledge of those compiling the reports to Rio, Vale sought to bar the claim on the grounds that Rio had sufficient knowledge of the facts prior to the four-year statute of limitations period for commencing the claim.

Rio sought to refute that by relying on an “equitable tolling” defense which turned on whether its investigations were or were not sufficiently diligent, whether it was aware of so-called “red flags” putting it on notice of its potential claim, and whether or not there was any deliberate cover-up by Vale.

The New York court issued a Letter of Request, at Vale’s behest, that the authors of the various business intelligence reports should attend for witness examination abroad. Each of the business intelligence firms that produced the reports sought to vary the Letter of Request in order to give effect to confidentiality assurances and to protect the identities of their confidential sources.

The Judge’s observations on the precarious position of whistleblowers and investigative reporters compiling such business intelligence reports are noteworthy:

Nevertheless, it seems to me that in this rather different context, the court may take judicial cognizance of the truism that even in a democratic society such as this jurisdiction or the United States, whistleblowers may be castigated for speaking out and suffer prejudice to themselves or their families, whether or not they act within the four corners of the law and whether or not they are exposing wrongdoing. Human nature is such that those who engage in corruption, particularly if they are in positions of power, do not take kindly to their wrongdoing being exposed. There are many corners of the globe where journalists are targeted and even imprisoned for fair and impartial reporting, or accused of being spies. This jurisdiction expressly recognizes the importance of keeping confidential the identity of journalists’ sources (indeed there is legislation to protect them)… There is no reason to suppose that any of the sources in this case have acted unlawfully, but that does not mean that they have nothing to fear if their identities come to light. …It is in the public interest that they should not be discouraged from speaking out or from providing intelligence of this nature.

The High Court varied the Letter of Request to protect the identities of the confidential sources on the grounds that justification for disclosure was outweighed by the resultant breaches of confidence and the potential risks for those sources.

A copy of the High Court decision in Rio Tinto Plc v Vale S.A. & Ors [2015] EWHC 1865 (QB) (29 June 2015)  is here.


Alistair Craig, a commercial barrister practicing in London, is a frequent contributor to the FCPA Blog.

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1 Comment

  1. After these past years of truly grubby, underhanded, vengeful treatment of American whistleblowers, this British news makes me feel as if I've just had a shower in sunlight.

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