An island law firm says journalists investigating alleged VAT abuse could be using material illegally obtained from its files in a sophisticated cyber attack.

In a statement released last night, Appleby said the data security incident happened last year.

It said: ’We are committed to protecting our clients’ data and we have reviewed our cyber security and data access arrangements following a data security incident last year which involved some of our data being compromised.

’These arrangements were reviewed and tested by a leading IT Forensics team and we are confident that our data integrity is secure.

’We are disappointed that the media may choose to use information which could have emanated from material obtained illegally and that this may result in exposing innocent parties to data protection breaches.’Appleby said it has thoroughly and vigorously investigated the allegations and are satisfied that there is no evidence of any wrongdoing, 'either on the part of ourselves or our clients'.It added: 'We refute any allegations which may suggest otherwise and we would be happy to cooperate fully with any legitimate and authorised investigation of the allegations by the appropriate and relevant authorities.'Appleby told iomtoday: 'This was a sophisticated cyber-attack. We cannot confirm what documents may have been viewed illegally. 'We can confirm that the security breach was limited and involved a very small percentage of our global document library. It was not a full-scale automated attack.'It said the breach was discovered in May 2016 during a routine check of security perimeters.'We reacted immediately and we employed an IT forensics team to investigate the breach and to ensure there was no illegal presence in our network,' Appleby added.'We have reviewed our cyber security and data access arrangements and implemented remedial actions. These arrangements were reviewed and tested by a leading IT Forensics team and we are confident that our data integrity is secure.'