What happens when there’s suspected criminal activity in your place of work, and how do you gain access to protected evidence in order to prove your innocence?
Imagine you work for a company that discovers there may have been criminal activity taking place in its midst. The Board becomes rightly concerned about its legal exposure, and quickly instructs an external firm of lawyers to conduct an internal investigation and report back. The findings of that initial investigation result in the company making a ‘self-report’ to the Serious Fraud Office (SFO) about the suspected wrongdoing. Having gone through various processes and discussions with the SFO, the company ultimately manages to secure a Deferred Prosecution Agreement (or DPA).
Now imagine it from the human’s perspective.
As an employee of the company, you find that you were part of that original internal investigation by the law firm and that you’re suspected of some wrongdoing. You’re relieved of your duties, but worse still, you then find by reason of the ‘self-report’ that you’re being investigated by the SFO. Things turn from bad to worse when the SFO decides to charge you with suspected criminal offences.
This is where your troubles really begin, as you try to defend your case and seek to gain access to material that you want to use as part of your defence.
An example case
The DPA in The Queen (AL) v SFO & XYZ Limited and Others [2018] EWHC 856 arose out of such circumstances, and concerned events connected to only the second DPA to be concluded by the SFO. It tackled, for the first time, a number of important issues, such as disclosure required by human defendants in their parallel criminal proceedings which originated out of the company’s internal investigations. There were claims of legal professional privilege (LPP) over the material. It reviewed the SFO’s obligations to human defendants where there is a co-operation term in existence on the company, under the DPA, to divulge such material to the SFO when requested, and to which an LPP claim cannot attach. In particular, the Court examined whether ‘first account’ interview material could be subject to LPP in such circumstances.
The result
This case has seen some difficult and novel issues raised. The SFO’s disclosure duty towards a defendant under these specific circumstances has come under the microscope of the Divisional Court. Whilst the Divisional Court found that the Crown Court was the most appropriate forum for resolving disclosure disputes, it has to be said that the SFO didn’t come out of this matter particularly well. Indeed, the Court found that numerous public law errors had been made. This exacerbated the investigators’ failures to challenge the company’s assertion of LPP over the first account material in the internal investigation, which led to the ‘self-report’ and its present stance on the viability of such a claim, despite there being clear settled law on such privileged claims. The net result of the judgment is a useful analysis of the scope and nature of a Prosecutor’s duty of disclosure in the context of a concluded DPA. There may even be wider implications for criminal trials in general.
The company’s internal investigation saw the engagement of outside lawyers to look into the alleged bribery of agents acting for overseas customers between June 2004 and June 2012. The central issue at the core of the judicial review claim concerned the human defendant’s lawyers seeking access to the full first account interviews provided by senior company employees to the company’s lawyers, and which were undertaken as part of that investigation. The interviews had been lengthy, but the company’s lawyers sought to provide brief summaries of those only to the SFO, not the actual factual accounts given. The company refused to waive LPP over the product of the investigation, or to accept that LPP could not apply on the basis of existing case law.
An alternative solution?
This impasse could have been resolved in a different way. The DPA comes with a number of clauses attached. One of these clauses requires the company to co-operate in the future, and that includes the need to disclose to the SFO all material and information in its possession that is not protected by a valid claim of LPP or any other legal protection. Despite the fact that the SFO had made it clear to XYZ’s lawyers that the claim to LPP was untenable, the SFO refused to trigger the breach clause within the DPA or to issue a witness summons (under Section 2 of the Criminal Procedure (Attendance of Witnesses) Act 1965). Had either of these options been utilised, the issue of LPP could have been determined by the trial Judge.
The SFO did not have the first account material in its possession. The trial Judge, based on the submissions of the SFO, concluded that he did not have the power to examine the SFO’s failure to trigger breach proceedings in relation to the DPA. The trial Judge therefore ruled that he could not order the SFO to obtain the material, despite the Attorney General’s Guidelines on Disclosure. But the Divisional Court concluded that according to Parliamentary intent, trial matters such as disclosure should be determined within the Crown Court rather than the High Court, and that there were alternative remedies available. The SFO therefore succeeded in its submission that the High Court was not the appropriate venue for matters of disclosure to be heard. However, the Court did not stop there. The Court’s wider observations represented something of a significant defeat for the SFO in its approach to the issue of disclosure and its treatment of the company’s LPP claim.
The Court’s judgment
The court concluded that: “The SFO failed to address relevant considerations, took into account irrelevant matters and applied the wrong legal test to the assessment that it made. These public law errors were material. If, on proper analysis no privilege applies (either per se or because of waiver), then XYZ Limited should simply disclose the interview records forthwith.”
It was also suggested that the SFO have been in breach of the Attorney General’s Guidelines on Disclosure in its approach to XYZ Limited, in that it did not enjoy the level of discretion it asserted that it had. The Attorney General’s Guidelines, Article 6 of the European Convention of Human Rights, and the common law right to a fair trial were all key limitations to the SFO’s discretion and indeed were cited as potentially giving grounds in the future for a possible abuse of process application, if other remedies fell short of obtaining the material. The SFO has a duty to explore privilege claims properly. In this present case, though, it appears it simply accepted the company lawyers’ assertion that LPP applied even though the SFO questioned that claim, and the case law supported the SFO’s position that the claim could not be sustained.
A bad day at the office
What appeared to be a ‘bad day at the office’ for the SFO was compounded by the fact that the Court had declined to make an order for costs against the Claimant. The SFO had won the battle on the basis of jurisdiction but lost the war as all of the substantive issues raised by the Claimant were upheld by the Court.
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