Kent Pharmaceuticals Ltd, (R on Application of) v Serious Fraud Office & Anor

This is the judgment of the Court to which both members have contributed. It relates to a claim for judicial review by Kent Pharmaceuticals (“KP”) of a decision of the Director of the Serious Fraud Office (“the SFO”) to disclose copies of documents seized from KP to the Department of Health (“the DoH”). KP seeks a declaration that the decision of the Director of the SFO on 14^th January 2003 to disclose copies of documents seized from KP to the DoH is unlawful. KP also claims damages and, by an amendment to its claim form, a declaration that the Director of the SFO is obliged to notify it of any disclosure to a government department of information contained in documents seized from the Claimant.

The claim arises out of an as yet unconcluded investigation into suspected serious fraud. The investigation concerns generic drugs supplied by a number of companies, one of which is KP, to the National Health Service. The SFO had received information suggesting that a number of companies within the industry, including KP, had acted unlawfully in concert so as to increase the selling price of certain generic drugs, in particular Warfarin and penicillin-based antibiotics.

On 27^th March 2002 a District Judge at Bow Street Magistrates’ Court was asked to consider a written application by the SFO for search warrants. An oral application for warrants was made on 2^nd April 2002. In the result some 31 warrants were issued, two of which related to premises occupied by KP and a further two related to premises occupied by two persons who were or had been its directors. The warrant against KP, issued under Section 2(4) of the Criminal Justice Act 1987, authorised entry into their premises and-

“…search for the following documents including information recorded in any form from July 1997 through to December 2000 which appears to relate to any matter relevant to the investigation into the production, supply and pricing of penicillin-based antibiotics”.

(A large number of companies were then named in an Appendix to the warrant as “entities relevant to the investigation”). The warrant then continued-

“the information includes:

(a)

Examples of identical or similar schedules and correspondence to those provided to the investigation.

(b)

Material which is relevant to the meetings at which it is alleged that the conspiracy was discussed: This includes reception logs, diaries, agendas, set up paperwork including invitations, papers for discussion, minutes or notes.

(c)

Correspondence, e-mails, faxes, notes of telephone conversations between any entity and the primary relevant groups set out above and any entity in either the primary or the secondary relevant group set out above including in particular communications involving [15 named individuals] together with any corresponding internal file notes.

(d)

Material relating to the auditing to the sales of antibiotics including audit working papers and the reception logs.

(e)

Evidence of all payments and receipts between any entity in the primary relevant group set out above and any entity in either the primary or secondary relevant group set out above and accompanying explanatory invoices, payment instructions, receipt records and correspondence. Such evidence will be contained in nominal (also known as general) ledgers, purchase ledgers, sale ledgers, cashbooks and bank statements.

(f)

Price lists for penicillin-based antibiotics.

(g)

External penicillin-based antibiotics market data from e.g. Intercontinental Medical Statistics or Generics Monitor internal penicillin-based antibiotic market data including volumes and values of sales and customer lists. In addition any documents which evidence the sharing of market data between any entity in the primary relevant group set out above and any entity in either the primary or the secondary relevant group set out above.

(h)

Memoranda, file notes of instructions, notes of telephone conversations, e-mails to/from the sales force concerning availability or withholding of stocks, prices to wholesalers and pharmacies, special offers, discounts.

(i)

Board minutes of any entity in the primary relevant group set out above.

(j)

Correspondence notes of phone calls, faxes, e-mails to the Prescription Pricing Authority and any other arm of the DoH relating to prices, stock and supply.

(k)

Communications and internal documents concerning the reasons and explanations for rises in the price of generic drugs including those with the DoH and to or from the British Generic Manufacturers Association (BGMA).

Authority is hereby given for any constable to enter using such force as is reasonably necessary for the purpose and search the said premises on one occasion only within one month from the date of issue of the warrant and take possession of any documents appearing to be documents of the description referred to above (other than those documents which any person would be entitled to refuse to disclose or produce in the High Court on the grounds of legal professional privilege) or take in relation to any documents so appearing any other steps which may appear to be necessary for preserving them and preventing interference with them.”

The warrants were executed on the 10^th April 2002 with the assistance of a number of detectives from the Metropolitan Police Service who had previously been extensively briefed on the nature and scope of the investigation. A large quantity of documents and material was seized.

Following the execution of the warrants, the Claimant KP, together with the individual directors, sought permission to apply for judicial review of the decision of the Director to apply for the warrants, the decision of the Magistrates’ Court to issue them and the execution of the warrants by the officers of the Metropolitan Police. That permission was refused on paper on the 25^th July 2002 and the application was renewed to this Court. By a Judgment dated 22^nd November 2002, the application for permission was dismissed. Lord Woolf CJ at paragraph 24 considered the attack on the scope and breadth of the warrants and stated:

“It states that the information recorded is to be “in any form from July 1997 through to December 2000”; it is to relate to any matter relevant to the investigation into (and this is the important part) “the production, supply and pricing of penicillin-based antibiotics”. It identifies the bodies referred to”.

He held that the nature of the events to which the investigation related was identified with sufficient particularity and added:

“A document of this nature has to be approached with a sense of proportion to the type of issues which are embraced by an investigation of this scale.

The words “including” or “includes” have to be treated in a restrictive manner. What is specified thereafter is non-exhaustive, but it clearly gives a sufficient definition to the nature of the investigation and the nature of the documents which are being sought to comply with the requirements of Section 15 [of the Police and Criminal Evidence Act 1984]”.

On 13^th January 2003 the SFO wrote to KP’s solicitors and other legal advisors representing other companies and individuals who had been subjected to the same search. In that letter it stated that the DoH had commenced proceedings in relation to some of the searches in December 2002 concerning Warfarin and that an urgent requirement for access to Warfarin related documents had arisen. The result was that the SFO said that it expected to send “this week” to the relevant parties copies of the Warfarin documents which it had been able to identify. The SFO then proceeded to disclose documents relating to Warfarin to the DoH, which in turn issued a claim form in the Chancery Division of the High Court on 11^th February 2003 against a number of drug companies, including KP. In a sentence, these proceedings claim relief based on alleged agreements unlawfully to manipulate and increase the price at which Warfarin was supplied to the National Health Service.

On 16^th January 2003 the SFO notified KP that the Director had exercised her discretion under Section 3(5) of the Criminal Justice Act 1987 to accede to the request of the DoH to disclose copies of certain documents seized during the course of the searches. These included documents seized from the premises of KP. It is this decision to disclose that is at the heart of this claim.

On 4^th April 2003 KP issued its claim in these proceedings. It sought, on an interim basis, an undertaking from the SFO to make no further disclosures of documentation pending determination of the application for judicial review. In the course of discussions about this request, which was eventually satisfied, the SFO informed KP that on 14^th August 2003 it had disclosed to the DoH a further tranche of some 6,000 documents. This disclosure has been made the subject of a third set of judicial review proceedings, which have had to be issued prior to the determination of the present claim to preserve the Claimant’s position.

KP argues that 5 particular documents were unlawfully seized on 10^th April 2002 in that they were neither taken in accordance with the terms of the warrant issued under Section 2(5) of the Criminal Justice Act 1987 nor under Section 19 of the Police and Criminal Evidence Act 1984 (“PACE”). If this is right they cannot have been lawfully disclosed under Section 3(5) of the 1987 Act. In its original claim 36 examples of unlawful seizure were put forward. Before us these were reduced to 5, without prejudice to KP’s argument that these are not the only examples of unlawful seizure and with a reservation by them of the right to argue that there are further examples which could be put forward. But Mr. Stuart Isaacs QC for KP candidly said, in effect, that these were the best apples on his stall in this respect.

Therefore it will be seen that common to both powers is the requirement that the constable seizing the material must have reasonable grounds for belief under one or other of these statutory provisions.

Before turning to the substance of this allegation we must deal with a claim by the SFO that this issue has already been adjudicated upon by a court of competent jurisdiction, namely the Administrative Court, when it refused the renewed application for permission in the first judicial review proceedings. The SFO argues that in correspondence prior to the conclusion of those proceedings it had on the 16^th May 2002, invoked Section 19 of PACE in justification of certain seizures. As a matter of fact this is so; but on examination it is plain that it was only relied on in the context of a complaint by KP’s solicitors that documents had been seized which fell outside the time envelope specified in the warrant.

In its original claim KP had complained of seizure of material which fell outside the terms of the warrant, and the SFO, in its Grounds of Opposition, argued that the officers had reasonable grounds to believe that all the material seized either comprised documents of the kind described in the warrant or were evidence in relation to an offence under investigation and therefore were lawfully seized under Section 19(3) of PACE. The SFO argue that the extensive citation of the terms of Section 19 by Lord Woolf CJ in his Judgment can only be relevant to this argument.

So, it is argued, under the principle identified by the House of Lords in Hunter v Chief Constable of West Midlands [1982] AC 529 the current proceedings are a collateral attack on a final decision by a court of competent jurisdiction and objectionable as an abuse of process.

In R(Opoku) v Principal of Southwark College [2003] 1 WLR 234 Lightman J also held that such decisions were interlocutory in their nature and not final and therefore not capable of bringing into play the doctrine of res judicata. He too held that a fresh application might be vulnerable to dismissal as an abuse unless new material was advanced in support of it.

In the present case KP says that on the facts it is not shown to have been aware that the SFO had taken significant documents relating to Warfarin and that Warfarin documents were not the focus of the previous application. The SFO’s response is to say that on their face, four of the five documents now relied on in this part of KP’s submissions evidently relate to Warfarin. In our judgment, while this is factually correct it is not an entirely full or fair description of the reality of the position. Once the needles have been taken out of the haystack (which was said to comprise in excess of a million documents) then of course their nature becomes readily apparent. But that would not have appeared to be the case in the weeks between the seizure and the issue of the first judicial review proceedings. Warfarin plays no part in the Judgment of Lord Woolf. In our judgment the seizures of the particular documents identified as having been unlawfully taken will have to be considered on their merits in this application and KP is not debarred from raising this issue in the way it has.

We approach the submissions by KP as to individual documents reminding ourselves of the requirements of the legislation, namely that the officer seizing each document has only to have reasonable grounds for believing the relevance of the document either to the matters described in the warrant or to “any other offence”. We also remind ourselves of Lord Woolf’s Judgment in which he said that a document such as this warrant has to be approached with a sense of proportion to the type of issues which are embraced by an investigation of this scale. KP complained in the first application for permission of the length of time which the officers spent on its premises. That problem would only be further aggravated if too high a duty was imposed on the seizing officer to satisfy himself to some higher standard that each document was in fact proved, say as a matter of certainty or probability, to be a document of the kind described in the warrant. We shall identify each document by the lettering given to it in the exhibit “DON2” to the witness statement of Denis O’Neill dated 3^rd April 2003.

Document D. This was dated 20^th April 2000 and came from the head of the Medicines Pharmacy and Industry Division of the DoH. It is on its face a document dealing with proposals “for setting maximum prices for generic medicines supplied for use in NHS primary care across the UK” and was issued to all interested parties. The witness statement of the officer who seized this particular document says he considered that it was covered by the terms of the warrant. KP argues that it plainly falls outside the scope of the warrant as being irrelevant to an investigation into penicillin-based antibiotics and it cannot therefore be evidence of any offence. We note however that it features as a document in the particulars of claim now issued by the Secretary of State for Health and Others against KP and Others. Its relevance is that it forms part of the history of the claim for collusive and unlawful action by the drug companies. What is alleged is that after this document was circulated and in advance of the Government setting prices, market prices from the drug companies to the wholesalers for Warfarin collapsed. It is therefore plain to us that there were reasonable grounds for believing that this document was capable of being evidence of unlawful concerted action in relation to the price of Warfarin and at least potentially other drugs. We reject the criticisms made of its seizure.

Document S. This is a 13 page price list relating to generic drugs of various descriptions and sizes. It was, on its face, issued by Unichem who are not alleged to be a co-conspirator with KP but one of its customers. So far as its subject matter is concerned it is plainly relevant to an investigation on price fixing by KP and Others. The officer who seized it took the view that it clearly fell within the scope of the warrant, particularly sub-paragraph (f), and in that regard we consider he was right. The objection taken to it is there is nothing on the document to show that it related to the time envelope specified in the warrant namely July 1997 through to December 2000. Though KP concede that it might therefore have been seized under Section 19, it could not be seized under the warrant. We are not impressed by these criticisms. The officer faced with the decision whether to seize the document or not is entitled, when the document is plainly highly relevant as this one is, to resolve doubts as to whether it spans or includes any part of the appropriate time period in favour of seizing the document and will if he does so have reasonable grounds for his belief.

Document M. This on its face is a director's report dated December 1997 which among other things describes a meeting between KP and Goldshield Pharmaceuticals. The Goldshield Group was an entity listed in Appendix A to the warrant being there described as “relevant only to Warfarin”. The product discussed with Goldshield was Warfarin. The officer who seized this document says that all the items he seized were material in respect of which he “formed the view [they] fell within the warrant or within Section 19 of PACE”. In relation to this document he said:-

“I also took note of one meeting in December 19977 which particularly referred to Warfarin. I was aware from the briefing that there was an investigation into Warfarin. I therefore seized the file” [of board meeting papers and minutes for KP for 1997].

The document is pleaded in the civil proceedings as evidence of Goldshield’s manipulation of the price of Warfarin and is therefore plainly relevant to the Warfarin investigation. KP objects that, while it might have been seized under Section 19, that is not the basis upon which the officer seizing it “appears to have been operating”. That is not how we read his evidence. His view was that all the documents he personally seized fell within the warrant or within Section 19, that the blue file in which ‘M’ was contained had papers and minutes for 1997 covered by the warrant, but he also noted the particular meeting recorded in ‘M’ which specifically referred to Warfarin. It is therefore a necessary and easy inference to be drawn on our reading of his evidence that he was relying on his Section 19 powers when he took this document and that he was entitled so to do.

Document B. This is dated November 1996 and on its face is a confidentiality agreement between Goldshield Healthcare, which as we have said was named in the Appendix to the warrant as an entity relevant to Warfarin, and KP. By the terms of this agreement KP agrees to keep secret and confidential inter alia marketing information, in relation to three different sizes of Warfarin produced by Goldshield. KP asserts in these proceeding that such agreements are common in industry and are not necessarily to be construed as sinister or evidence of unlawful activity. The officer who seized it says in his witness statement:

“I believe that the documents were evidence connected to the suspected offences or other offences. I therefore seized the ….Agreements …..”.

They were marked as having been seized under Section 19 of PACE. The complaint made in respect of this seizure is that there is no evidence that the officer addressed his mind to the requirements of Section 19, that the document is not evidence in relation to any offence and there could not have been reasonable grounds for concluding the contrary. The SFO argue that the construction to be placed on this document was a matter for the officer to form an opinion on and that he plainly formed the opinion that they were at least potentially relevant to the investigation as to Warfarin and about which he was briefed. We do not consider that there is any force in the objection to this document; it is of course entirely capable of bearing an innocent explanation but there were also reasonable grounds for seizing it under Section 19 in our judgment.

Document A. This is an undated profile of KP as a company, describing its history, the numbers of its staff, the products which it produced and its customer base. There is a list of its “own label” products which includes Warfarin. The officer who seized this document describes it as having been found in a yellow folder in an office occupied by the Commercial Director of KP. He does not state in terms whether he seized the document under Section 19 or under the warrant although earlier in his witness statement he made the general assertion that the material he seized comprised “items that I formed the view fell within the warrant or within section 19 of PACE”. KP argues that if the warrant is relied on such reliance is misplaced since it is not possible to bring it within its terms. If, on the other hand, Section 19 is relied on that too is misplaced as there is, it claims, no evidence that the officer seizing the document ever addressed his mind as to whether it comprised evidence of any offence or, if he did, whether he had a reasonable basis for so concluding, nor does he give his reasons now for not so doing.

The SFO point to the fact that this document is relied on in the civil proceedings as evidence of the claim against KP and Others. It also relies on R v Chesterfield Justices and another ex-parte Bramley [2000] QB 576 where this Court considered the position of a searching officer confronted by the problem of documents which might or might not be covered by legal professional privilege and therefore protected from seizure under Section 8 (1) of PACE. At 584D Kennedy L J rejected the notion that, before seizing the document, the officer had to be satisfied that it did not consist of or include items subject to legal privilege. He concluded:

“The officers are not, for example, required to be satisfied that there are reasonable grounds for believing that the material sought does not consist of or include items subject to legal professional privilege”.

Analogously, therefore, the SFO contends that the officer seizing this particular document did not have to give any detailed explanation of his thought processes as to why he considered this document relevant. As a matter of fact it establishes KP’s ownership of the Warfarin label which is self evidently relevant to any investigation centred on manipulation of the price of that product. In our judgment the omissions in the evidence relied on by KP are not valid and do not render this seizure unlawful. We reject the criticisms in respect of the seizure of this document.

It therefore follows that KP’s argument based on the illegality of the seizure of the documents fails.

The disclosure by the SFO to the DoH was based on section 3(5)(a) of the 1987 Act which provides that, subject to certain exceptions which do not apply in the present case,

“information obtained by any person in his capacity as a member of the Serious Fraud Office may be disclosed by any member of that office designated by the Director for the purposes of this subsection –

(a)

to any other government department….. ”

The case for KP is that, there being an admitted interference with its Article 8 rights, the interference cannot be justified under Article 8(2) because the disclosure was not “in accordance with law”. In this context, Mr. Isaacs submits that the disclosure was on the basis of a discretion which is conferred in terms which fail to identify the scope and manner in which it may be exercised and the grounds which would warrant its exercise. He relies on two Strasbourg authorities. In The Sunday Times v. United Kingdom (1979) 2 EHHR 245 the Court said (at p 271):

“In the Court’s opinion, the following are two of the requirements that flow from the expression ‘prescribed by law’. First, the law must be adequately accessible: the citizen must be able to have an indication that is adequate in the circumstances of the legal rules applicable to a given case. Secondly, a norm cannot be regarded as a ‘law’ unless it is formulated with sufficient precision to enable the citizen to regulate his conduct: he must be able – if need be with appropriate advice – to foresee, to a degree that is reasonable in the circumstances, the consequences which a given action may entail. Those consequences need not be foreseeable with absolute certainty: experience shows this to be unattainable. Again, whilst certainty is highly desirable, it may bring in its train excessive rigidity and the law must be able to keep pace with changing circumstances. Accordingly, many laws are inevitably couched in terms which, to a greater or lesser extent, are vague and whose interpretation and application are questions of practice. ”

The second authority, Domenichini v. Italy (1996) 32 EHRR 68, was concerned with the monitoring of the correspondence of prisoners, including legal correspondence. The relevant Italian law permitted such monitoring if a judge, in his discretion, ordered it in a reasoned decision. The Court said (at paras 32-33):

“The Court reiterates that while a law which confers a discretion must indicate the scope of that discretion, it is impossible to attain absolute certainty in the framing of the law, and the likely outcome of any search for certainty would be excessive rigidity. In this instance, however, Law No 354 leaves the authorities too much latitude. In particular, it goes no further than identifying the category of persons whose correspondence may be censored and the competent court, without saying anything about the length of the measure or the reasons that may warrant it. The gaps in….the Law weigh in favour of rejecting the Government’s argument.

In sum, the Italian Law does not indicate with reasonable clarity the scope and manner of exercise of the relevant discretion conferred on the public authorities, so that Mr. Domenichini did not enjoy the minimum degree of protection to which citizens are entitled under the rule of law in a democratic society. There has therefore been a breach of Article 8.”

On behalf of the SFO, Mr. Perry makes the following submissions. First, it is important to have regard to the context. The 1987 Act confers a range of special powers upon the SFO because it is concerned exclusively with the investigation and prosecution of “serious or complex fraud”, which Parliament has identified as calling for special and in some ways draconian treatment. Secondly, what is in issue in this case is disclosure of material which had been seized pursuant to a warrant issued by a District Judge. Thirdly, the disclosure permitted by section 3(5)(a) is limited by the fact that the only recipients are government departments and the like and it is implicit that such a disclosure can only be made lawfully if it is for a purpose in which the recipient in question has a lawful interest. Fourthly, such a lawful interest is obvious in the present case and relates to the potential recovery for public funds of a large amount of money. Fifthly, there are other limitations upon disclosure. For example, only a person specifically designated by the Director can decide to disclose. Moreover, section 3(5), read as a whole, draws tight lines around disclosure by the SFO in that, apart from government departments, the other permitted recipients are closely defined and are limited to persons such as a company inspectors, insolvency officials, prosecutors and bodies carrying out supervisory, regulatory and disciplinary functions (see sections 3(5)(b), (c), (d) and (6)). Sixthly, all this provides a proper framework in domestic law and, since the coming into force of the Human Rights Act, it satisfies the “in accordance with law” requirement of Article 8(2) providing the person disadvantaged by the disclosure with the additional protection of the other requirements of Article 8(2). Seventhly, the case for the SFO is supported by other Strasbourg authority. Mr. Perry seeks particularly to rely on Klass v. Germany (1979) 2 EHRR 214 which concerned the surveillance of communications. However, it seems to us that on analysis, that case is more concerned with proportionality than “in accordance with law”.

Clearly, the discretion conferred by section 3(5)(a) is a wide one. In our judgment, however, when considered in context it does not offend against the principles enunciated in the Sunday Times and Domenichini cases. It is important to have regard to the particular context of serious and complex fraud. It is also significant that the beneficiary of a lawful disclosure will always be a government department carrying out its functions in the public interest. Here the DoH is attempting to recover very substantial damages by civil action. This Court is in no position to form a view about the prospects of success in that litigation which, we are told, is the subject of a strike out application to be heard in early 2004. If disclosure had been made in bad faith or for an improper purpose, in the sense of a purpose not within the proper functions of the recipient department, it would have been judicially reviewable in domestic law on traditional public law grounds. Moreover, even if otherwise within the statute, it would also now be reviewable on a proportionality basis by reason of the SFO’s status as a public authority and the operation of the Human Rights Act.

For these reasons, we are satisfied that the decisions of the SFO to disclose material to the DoH in January and August 2003 were “in accordance with law” within the meaning of Article 8(2), notwithstanding the width of the discretion conferred by section 3(5)(a). It is not suggested on behalf of KP that, on that basis, the decision was disproportionate.

It is axiomatic that the SFO was obliged to treat KP fairly. The issue in relation to this ground of challenge is as to the ambit of the requirement of fairness in this case. Mr. Isaacs submits that fairness required the SFO to give KP the opportunity to make representations on the proposed disclosure and to give sufficient time for this to happen. If he is right, it is clear that, whilst the SFO forewarned KP of the request of the DoH for disclosure by a letter dated 13 January 2003 and indicated that it expected to send the Warfarin documents to the DoH by the end of the week, in fact the disclosure was made on the very next day, 14 January. If there is a duty to allow a reasonable time for representations, it was not complied with in January. So far as the August disclosure is concerned, the case for KP is that it knew nothing of it until two months after it had taken place.

Mr. Isaacs seeks to rely on two authorities to support his case on the requirement of fairness. In Woolgar v. Chief Constable of Sussex [2000] 1 WLR 25, the issue was the potential disclosure by the police to the regulatory body for nursing of confidential information concerning the plaintiff, the matron of a nursing home. There had been insufficient evidence to charge the plaintiff with a criminal offence. The regulatory body wished to consider disciplinary proceedings. The plaintiff unsuccessfully sought an injunction to restrain the disclosure. A countervailing public interest prevailed. However, Kennedy LJ said (at p37):

“In order to safeguard the interests of the individual, it is, in my judgment, desirable that, where the police are minded to disclose, they should, as in this case, inform the person affected of what they propose to do in such time as to enable that person, if so advised, to seek assistance from the court. In some cases, that may not be practicable or desirable, but in most cases that seems to me to be the course that should be followed.”

In Regina v. Chief Constable of North Wales Police, ex parte Thorpe [1999] QB 396 the context was the sensitive one of disclosure of the past convictions of paedophiles to the public. Lord Woolf MR said (at p 428):

“Before reaching their decision as to whether to disclose the police require as much information as can reasonably practicably be obtained in the circumstances. In the majority of the situations which can be anticipated, it will be obvious that the subject of the possible disclosure will often be in the best position to provide information which will be valuable when assessing the risk.”

Counsel also referred to Marcel v. Commissioner of Police for the Metropolis [1992] Ch 225.

Against this background, Mr. Isaacs makes the point that, in the present case, it cannot be said that it was not practicable or desirable to receive and consider the representations of KP prior to the decision to disclose. The documents in question are KP’s own documents and there is therefore no security risk in allowing KP to make representations. Indeed, in January, KP was informed prior to the decision, but not in sufficient time to enable meaningful representations to be made.

The response of Mr. Perry is to postulate circumstances which might make it inappropriate to inform the person whose documents are under consideration for disclosure. For example, there might be issues of public interest immunity and/or informants might be involved. Moreover, there could be potential difficulties in identifying documents and persons in respect of whom representations might be appropriate.

We do not doubt that such difficulties may arise and that in some cases the desirability of informing an interested party so as to permit representations may be overridden by other factors. However, we are not persuaded that there were any such difficulties or factors in the present case in January or August. To that extent, we are satisfied that the SFO did not act fairly. However, that does not necessarily mean that the particular manifestations of unfairness will attract discretionary relief. We have yet to receive submissions on relief. They should include submissions on materiality and the relationship with KP’s duty of disclosure to the DoH in the civil proceedings.

So far as the August disclosure is concerned, Mr. Isaacs’ submission is founded upon a misapprehension. As Mr. Jones observes, on 30 July the solicitors acting for the DoH, responding to a request from KP’s solicitors, sent to KP’s solicitors a copy of a letter dated 22 July (which had been written by an SFO official to the DoH’s solicitors). It referred to the January disclosure and added:

“Further material will be disclosed to you shortly concerning warfarin and penicillin based antibiotics.”

Thus, KP’s solicitors were on notice of the August disclosure from the end of July, a fortnight before the disclosure took place. However, they took no steps to influence, question or prevent it. Although the notice came from the DoH’s solicitors rather than directly from the SFO, we do not consider that KP suffered any detriment as a result of the failure of the SFO to give notice of its intention to make further disclosure.

This ground of challenge relates to a later stage in the sequence of events. It is to the effect that, after the SFO has made a disclosure to a government department or other authorised recipient under section 3(5), it is obliged to inform the owner of the disclosed information. Unless it does so, the owner has no means of taking advice and, if appropriate, instituting legal proceedings. Accordingly, it is suggested, Article 6 of the ECHR is engaged. Article 6(1) provides:

“In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law.”

Mr. Isaacs seeks to draw support from Golder v. United Kingdom (1975) 1 EHRR 524 and, in particular from the following passages from paragraphs 28 and 36 of the judgment:

“28…..Article 6(1) does not state a right of access to the courts or tribunals in express terms. It enunciates rights which are distinct but stem from the same basic idea and which, taken together, make up a single right not specifically defined in the narrower sense of the term. It is the duty of the Court to ascertain, by means of interpretation, whether access to the courts constitutes one factor or aspect of this right……

36…..the right of access constitutes an element which is inherent in the right stated by Article 6(1)…….”

This principle is also illustrated by Tinnelly & Sons Ltd and McElduff & Others v. United Kingdonm (1998) 27 EHRR 249 where the Court said (at paragraph 77):

“The right guaranteed to an applicant under Article 6(1)…..to submit a dispute to a court or tribunal in order to have a determination on questions of both fact and law cannot be displaced by the ipse dixit of the executive.”

However, it is to be observed that, as the Court stated in an earlier passage of its judgment in Tinnelly (paragraph 72):

“……this right is not absolute, but may be subject to limitations; these are permitted by implication since the right of access by its very nature calls for the regulation by the State. In this respect, the Contracting States enjoy a certain margin of appreciation, although the final decision as to the observance of the Convention’s requirements rests with the Court. It must be satisfied that the limitations applied do not restrict or reduce the access left to the individual in such a way or to such an extent that the very essence of the right is impaired. Furthermore, a limitation will not be compatible with Article 6(1) if it does not pursue a legitimate aim and if there is not a reasonable relationship of proportionality between the means employed and the aim sought to be achieved.”

This leads Mr. Isaacs to submit that (1) secrecy about the fact of a disclosure under section 3(5)(a) means that the very essence of the right of access is frustrated; (2) there was no legitimate purpose served by not informing KP that such a disclosure had been made to the DoH on 14 August; and (3) it was neither necessary nor proportionate that there should be no notice of such disclosure bearing in mind that the disclosure was to a government department to assist in the preparation of civil proceedings against KP and that on the occasion of the initial disclosure in January notice had been given. Finally, Mr. Isaacs seeks to draw an analogy with Marcel v. Commissioner of Police for the Metropolis [1992] Ch 225 in which the Court of Appeal considered that, in domestic law, notification by the police to the owner of documents seized under PACE of their proposed disclosure to a third party for the purpose of civil proceedings is desirable.

The case for the SFO is that, in this context of serious and complex fraud investigation, it was clearly the intention of Parliament that the limited power of disclosure to specified categories of public authority recipients in the public interest does not require notice of the disclosure to be given to the owner of the information. If such notice were required, it would impede the SFO and the recipients in carrying out their statutory functions. It would engender undesirable satellite litigation. Moreover, in comparable recent legislation of a regulatory or investigatory nature, whether passed before or after the Human Rights Act, there are other examples of a power to disclose to other bodies but without any provision for notice that disclosure has taken place: see, for example, section 84 of the Banking Act 1987, sections 348 and 349 of the Financial Services and Markets Act 2000, sections 17 and 19 of the Anti-Terrorism, Crime and Security Act 2001 and sections 240 and 241 of the Enterprise Act 2002. Mr. Perry submits that the real paradigm is not Golder or Tinnelly but Klass v. Germany (1979) 2 EHRR 214 in which a number of lawyers sought to challenge legislation, which permitted surveillance but did not require the authorities to notify the subjects that surveillance had taken place.

In our judgment, Klass fell within a very different factual matrix from which exists in the present case. In Klass, disclosure even after the event “might well jeopardise the long-term purpose that originally prompted the surveillance” (para. 58) and, in any event, there were statutory bodies “independent of the authorities carrying out the surveillance and…vested with sufficient powers and competence to exercise an effective and continuous control” (para 56). We do not find those elements in the present case where what is in issue is the disclosure by one public authority to another of property taken, and known to have been taken, from KP. Nor do we find the comparison with other recent domestic legislation to be particularly instructive. The issue is a fact sensitive one. On the facts of the present case, if (as we have held), it was incumbent upon the SFO to give KP advance notice of the intended disclosure to the DoH, with a reasonable time allowed for KP to make representations or (if so advised) to apply to the Court, it follows that, in the absence of such advance notice, it is incumbent upon the SFO to give notice as soon as possible after the disclosure for the same purposes. The facts which made advance disclosure obligatory in the present case apply similarly to subsequent disclosure where advance disclosure did not occur. We base this on a temporal extension of the domestic authorities referred to in connection with ground 3 and an application of the principle – Golder and Tinnelly. We are unpersuaded by Mr. Perry’s point about satellite litigation. In truth, we see very little scope for it. If the SFO is minded to disclose seized material to a public authority which is a competent recipient of it pursuant to section 3 and the intended purpose falls within the normal functions of the recipient authority, whether it be civil litigation or something else, the circumstances in which a potential complainant would have any legitimate cause for complaint would be exceptional.

When these principles are applied to the present case, KP faces difficulty. As we observe in paragraph 34, KP’s solicitors were on notice (albeit via DoH’s solicitors) of a proposed further disclosure “concerning warfarin and penicillin based antibiotics” from the end of July but they made no representations against it. Even now KP seems somewhat coy about any meaningful representations it could have made. Accordingly, we repeat our scepticism about whether it would be appropriate to grant KP discretionary relief.

This application for judicial review has met with limited substantive success. We shall consider relief on the occasion when judgment is handed down. Skeleton arguments should be lodged two days before on behalf of KP and one day before on behalf of the SFO and the DoH.