Outline

1. Introduction: Related Concept

a. Definition: duty of secrecy
b. Four exceptions to the duty of secrecy
- Compulsion under Law
- Duty to the Public
- Banks concern and own interest
- Information disclosed with customers authority
2. Discussion:
I. Public interest is the most significant in the 4 exceptions
a. The exception compelled by law, from banks interests and customers
consent MUST be compatible with the public interest
b. Public interests should prior to private interests when dilemma is faced
II. Public interest is not the most significant in the 4 exceptions
a. Private interest is the primitive motivator for disclosure, not the public
interest
b. There is no clear standard of Public Interest
3. Opinion: I agree with the statement
4. Conclusion
5. References

Statement:
In respect of the banks duty of confidentiality, the exception relating to Public
Interest is the most significant of the 4 exceptions in the 21st century, especially in our
age of global terrorism that threatens human lives. It, therefore, follows that the other
three exceptions are subservient to the exception relating to Public Interest
1. Introduction
The definition of duty of secrecy and four exceptions will firstly be explained.
Then, I will discuss about different points of view, supported by few arguments
and proves, and express my opinion afterwards. The conclusion will be made
1

at last.
a. Definition: duty of secrecy
The duty states that there is no need for a customer to ask the bank to keep
his affairs confidential, while the banks duty extends to all information gained
by virtue of the banking relationship and is not limited to information from or
about the account itself1 which means, all the materials related to
customers2. The duty is not only held when the relationships exist, but also
extended to after the end of relationship, even the customer is dead 3.
However, the duty is not absolute, but qualified, and the justification will be
made in four ways.
b. Four exceptions to the duty of secrecy
By the compulsion of law
It can be broadly divided into 4 types: Prevention of crime; it means the
disclosure required by ordinance will not breach the duty. Regulatory; it
means the disclosure is required by the commission. Evidence in
Proceedings; it means the disclosure is used to be the proof for litigation.
Taxation; it means some kind of authorities can request taxpayers records. 4
By Duty to the public
There is a must to disclose the related materials, as the failure of disclosure
will result on crime, terrorism, which will harm the societys interest.
Consequently, the duty of secrecy can be exempted at that time.
By Banks concern and own interest
The banks legal proceedings mainly aim at recovering the non-payment or
claiming the losses derived from the customers, the bank can disclose the
materials in order to smooth the litigation.5
Information disclosed with customers authority
In expressed form, the bank normally wishes the consent can be obtained by
written form though the oral consent might be acceptable occasionally. An
implied consent is that the customers presumed to notice the bank can
disclose the information under certain circumstances.6
2. Discussion: Is public interest the most significant of the 4 exceptions?
This is an argumentative question. I will illustrate a different point of view in
the following.
1 The judgments of Bankes and Atkin LJJ In Tournier being preferred to that of Scrutton LJ on this point
2 Banking Code, n.18 above, paras 13.1.
3 M. Hapgood, Pagets Law of Banking (11th edn., London, 1996), 121.
4 Ozannes, M. (2009). The duty of confidentiality: The rule and four exceptions.
5 Hsiao, M. Principles of hong kong banking law. (pp. 129-130).
6 Chan, B. S. (2000). Hong kong banking law and practice. (Vol. 1, p. 67). The Hong Kong Institute of Bankers.

I.

Public interest is the most significant between the 4

exceptions

a. Public interest should prior to self-interest when dilemma is faced

Sometimes the self-interest will conflict with the public one, but public interest
should outweigh the self-one since it leads to disastrous outcome when the
public interests is being ignored. For instance, in exceptions - compulsion by
law, the disclosure under Police Force Ordinance may put the bank into a
dilemma. It is compulsory for banks to disclose the confidential materials
under the law, since the failure to comply will result on criminal proceedings;
in the meantime, it may be sued for breaching duty of secrecy by the
customer if he is innocent. The dilemma is that, the bank should obey the law
to protect the public interest, or keep the agreement with the customer. At that
time, the bank will bear an extra responsibility to make proper internal
investigations; if the customer was really being suspected under reasonable
grounds in serious offences, considering the consequences of the criminals
cannot be convicted, the bank have to disclose the materials, even the bank is
taking the risk of being charged7. In other words, the public interest
encompasses the ordinance.
b. The other 3 exceptions are devoting for protecting public interest
ultimately, or it should be compatible with the public interest.
The exception by compulsion of law, bank interest, and customers consent
cannot be incompatible with protecting the public interest; even some
exceptions serve to protect the public interest. Drug Trafficking Ordinance,
Organized and Serious Crime Ordinance, etc., require the banks (agent)
disclosure, as the conviction of crime can sustain the society, which
contributes positively in the public interest. Sometimes the duty to disclose is
due to the banks own interest since the failure may lead to criminal and civil
sanctions. But on the other hand, the bank may no longer function efficiently
since they cannot register the criminals account, and keep helping them to
complete the illegal transactions, which actually harmed public interest. 8 So, in
this case, the disclosure serves to protect the public interest as well.

II.

Public interest is not the most significant between the 4

exceptions

a. Self-interest is the primitive motivator for disclosure, not the public

interest
It should be noted that the public interest is not the sole motivation for the
agent (bank) disclosing materials to the third party. As mentioned before, one
7
8

Hsiao, M. Principles of hong kong banking law. (pp. 125,129).

Hsiao, M. Principles of hong kong banking law. (pp. 128)

of the exception banks interest is the motivation of self-interest; which

means in banks perspective, they want to recover their loss through legal
proceedings so that they choose to disclose. Another exception customers
consent; for instance, when the customer wants to facilitate the borrowing
process, he will sign the consent which permits other bank can disclose the
information to whom he want to borrow from, it is apparent for the selfinterest, which is unrelated to the public interest.
b. There is no clear standard of Public Interest
The Jack Committee has recommended the duty to the public should be
abolished, since it is the generalized ground of exception, which is imprecise
in scope and uncertain in its application. Indeed, many ordinances have
existed which compels disclosure for conviction of money-laundering or
terrorist-financing activities.9 These ordinances can identify the clearer role
than that of the qualification by duty to public, and well-defined what
circumstances should the materials are being disclosed. In the modern age,
there is a claim that the duty to the public can be abandoned, as the
exceptions by compulsion of law have already illustrated the principles of the
duty to the public. As long as it was proposed to abolish, it will not be the most
significant one.

3. Opinion:
After illustrating for and against argument, in my opinion, I suggest that the
public interest is the most significant out of the 4 exceptions.
The former part has mentioned some decisions are just motivated by the
private interests, e.g. the banks interests or customers consent. However,
the self-interest can be the reasonable qualification of disclosing materials
only if the disclosure is compatible with the public interests. Indeed, the public
interest is the key decision elements which it gains the first seniority to
determine whether the disclosure is legitimate or not. Also, in certain extent,
the other 3 exceptions are aiming to protect the public interest as well, not
only the private one.
Although the public interest may not have the clear standard, but it cannot be
abolished since it gives the reason to the bank about being permitted to
disclose even absence of compulsion. Moreover, it stands the vital role since
it gives the greatest flexibility of disclosing information in order to deal with the
unpredictable contemporary situation.

Ellinger, E. P., Lomnicka, E., & Hoolet, R. J. A. (2009).Modern banking law. (5th ed., p. 190). Oxford
University Press

4. Conclusion
The exception by duty to public is non-replaceable, and it has the highest
priority within that four exceptions when considering the disclosure, and the
rationale of drawing this conclusion has been established in the paragraphs
above.
5. Reference
Chan, B. S. (2000). Hong kong banking law and practice, The Hong Kong
Institute of Bankers
Ellinger, E. P., Lomnicka, E., & Hoolet, R. J. A. (2009).Modern banking law.
Oxford University Press.
Hsiao, M (2013). Principles of hong kong banking law
M. Hapgood, Pagets Law of Banking (11th edn., London, 1996)
Ozannes, M. (2009). The duty of confidentiality: The rule and four exceptions.
Retrieved from http://www.mourantozannes.com/media/453284/the duty of
confidentiality the rule and four exceptions.pdf
Alan L Tyree (1998), Banking Law in Austrlia 3rd edition
Andrew Laidlaw & Graham Roberts (1989), Law relating to banking services
Hood, P., & Virgo, J. (2012). Principles of lender liability. Oxford University
Press.
Ko, S. (1998). Law and practice of banking services in Hong Kong . City
University of Hong Kong Press.