London,
11
May
2016
|
16:53
Europe/Amsterdam

Investigators and Privileged Material

A recent High Court ruling has permitted the Serious Fraud Office ("SFO") to continue using its current approach when identifying material that is potentially subject to Legal Professional Privilege ("LPP").

Case Summary

The case of R (on the application of Colin McKenzie) v Director of the Serious Fraud Office was a judicial review in which the Claimant argued that the procedure set out in the Operational Handbook of the SFO for dealing with material potentially subject to LPP embedded within electronic devices, is unlawful.

In McKenzie the SFO seized several electronic devices as part of their investigation into offences under the Bribery Act 2010. In this case it was the SFO who brought it to the attention of the Claimant’s solicitors that one of the devices contained potentially LPP material. The SFO then set out their procedure for handling potential LPP material.

The procedure adopted by the SFO requires them to agree search terms with the Claimant. The search terms would then be applied to all documents by an in-house specialist IT team who would then isolate a pool of potentially LPP documents. The documents would then be sent to independent Counsel to assess.

The Claimant submitted that this procedure was inconsistent with the terms of the Attorney General's Supplementary Guidelines on Digitally Stored Material (2011) namely that the SFO should be under an obligation to engage with a third party at the stage of agreeing search terms. The Claimant also argued that the procedure resulted in a real risk that the SFO investigative team could gain access to the LPP material.

The High Court dismissed the claim and allowed the SFO to continue to use its own technical staff to process privileged documents. They ruled that there was no obligation on the SFO to engage with a third party at the stage of agreeing search terms. They also ruled that there was no real risk that the SFO investigation team would be disclosed LPP material.

The decision is significant as it sets out several obligations placed upon investigating authorities when handling LPP material.
 

What Can Be Seized?

The general rule is that investigating authorities cannot seize material that is subject to LPP. However, Sections 50 and 51 of the Criminal Justice and Police Act 2001 (the "2001 Act") permits the authorities to seize devices that they suspect contain LPP material. The law states that, where an investigator finds a device that they have reasonable grounds for believing may contain material they are searching for, they are allowed to seize the device to allow them to determine if such material exists.

Investigators can therefore seize devices where it is not reasonably practicable to separate the LPP from the non-LPP material contained on the device. The provisions of the 2001 Act apply not only to electronically stored material but also to material stored in hard copy.
 

The SFO Policy for Handling LPP Material

The policy is not limited to material contained within electronic devices, but it can relate to material in paper documents too. The policy for handling LPP material, as set out in the Operational Handbook of the SFO, is as follows:

“When the SFO requires the production of material, or seizes material pursuant to its statutory powers, all material which is potentially protected by LPP must be treated with great care to:

  • Minimise the risk that LPP material is seen or seized by an SFO investigator or a lawyer involved in the investigation
  • Ensure that any LPP material which is seized is properly isolated and promptly returned to the owner without having been seen by an SFO investigator or a lawyer involved in the investigation
  • Ensure that any dispute relating to LPP is resolved in advance of the material being seen by an SFO investigator or a lawyer involved in the investigation
  • Ensure that where an SFO investigator or a lawyer involved in the investigation inadvertently sees LPP material, measures are in place to ensure that the investigation and any subsequent prosecution is not adversely affected as a result. Care must always be taken that LPP material is not viewed by the SFO staff involved in the investigation."

 

When Should Independent Third Parties Be Used?

In McKenzie the dispute arose due to the procedure followed by the SFO when implementing this policy, namely agreeing search terms for the preliminary sifting of material and using their own in-house IT team to separate the potential LPP material. The High Court clarified the position in relation to the use of internal staff processing LPP material.

The High Court stated that there was no obligation on the SFO, as an investigating body, to satisfy the court that there was no real risk that LPP material would be disclosed to an investigator. Even though they are not required by law to outsource the preliminary sifting process, the court did identify the importance of investigating authorities having in place robust procedures to prevent investigators from accessing LPP material.

The High Court set out the scope of the duty upon a seizing authority as follows:

“to devise and operate a system to isolate potential LPP material from bulk material lawfully in its possession, which can reasonably be expected to ensure that such material will not be read by members of the investigative team before it has been reviewed by an independent lawyer to establish whether privilege exists”.

The High Court went further to say that there should be clear guidance in place in the event that an investigator does read material subject to LPP. Such instances should be recorded and reported, the potential conflict recognised, and steps taken to prevent such information from being deployed in the investigation. This could mean the removal of the relevant investigator from the case.
 

Effect of the Ruling

The ruling has provided clarification about the policies and procedures expected of enforcement agencies when handling LPP material.

Although it is interesting to see the policy and procedure adopted by the SFO, it will be important to see how other enforcement agencies react to this ruling. The High Court has set out the unequivocal legal duty of law enforcement bodies to implement procedures for protecting LPP when dealing with seized material.

In light of this ruling it would be advisable that companies subject to search and seizure place a positive obligation on the investigating authority to provide clarification of their set policies and procedures for handling LPP material. If their procedures fail to comply with the requirements as set out above by the High Court, then potential recourse may be sought by the investigated party. It is also imperative that from the outset an investigating authority is informed about the existence of LPP material.

Full Judgment http://www.bailii.org/ew/cases/EWHC/Admin/2016/102.html




 

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