Omers Administration Corporation & Ors v Tesco Plc

The Defendant has in its possession and control certain documents obtained by the Serious Fraud Office (“the SFO”) for the most part pursuant to (or in anticipation of) the exercise of its powers under section 2 of the Criminal Justice Act 1987 (“the CJA 1987”). The SFO provided the Defendant with these documents (“the SFO

The question now to be considered is whether, having regard to (a) the terms on which the SFO obtained the SFO Documents and (b) the terms on which the SFO provided the SFO Documents to the Defendant, such documents should be disclosed to the Claimants, and if so, whether any restrictions should be stipulated in relation to their retention and use.

As I shall explain, the case law reveals many situations which are suggested to be nearly analogous, but no exact precedent: and both the proper test to be adopted and its application raise issues of some novelty, difficulty and importance.

As it happens, there was no real contest between the parties, the Defendant being ready if so directed to disclose the SFO Documents, and the Claimants being broadly agreeable to appropriate restrictions in respect of their retention and deployment. However, a number of third parties (for convenience and anonymity together “the Third Party Objectors” or “the TPOs”) from whom the SFO had obtained documents or information objected to any further disclosure.

In such circumstances, Mr Kitchener QC (leading Mr Andrew Lodder) on behalf of the SL Claimants and Mr Peter de Verneuil Smith (leading Mr Dominic Kennelly) have diligently advanced submissions from slightly different perspectives to illuminate the difficulties and their possible resolution. Further, although the Defendant (represented by Mr Michael Watkins) has been studiously neutral, the SFO (represented by Ms Victoria Wakefield and Ms Emma Mockford) has provided valuable further assistance both in addressing the legal principles involved and in drawing to my attention, and where necessary elaborating, the various objections received, in effect as a self-appointed amicus curiae. I am very grateful to them all, and their teams, for their very considerable assistance.

I propose to deal with the issues thus canvassed before me under the following headings:

Context of the issues arising and nature of the SFO Documents

As will be apparent from my previous decisions in this matter, in these proceedings the two sets of claimants (“the SL Claimants” and “the MLB Claimants”) seek compensation under the Financial Services Act 2000 (“FSMA”) in respect of the losses they contend they suffered as a result of the Defendant’s false and misleading statements to the market and its omissions from those statements. It is contended that these statements wrongly reported the Defendant’s commercial income and very materially overstated its trading profits, and were designed to and did conceal a serious downturn in the Defendant’s business. The Defendant is a well-known high street retailer with publicly listed shares (“Tesco shares”).

The two claimant groups differ in that (amongst other things) one is comprised of some 77 institutional investors who dealt in Tesco shares between April 2013 and 22 October 2014 and the other is comprised of two claimants bringing claims on behalf of investors for whom they purchased and/or retained Tesco shares between October 2009 and 19 September 2014. However, the broad thrust of their respective claims is similar enough that an exegesis of their differences in detail is not required for present purposes.

What is of more direct import is that the circumstances which have given rise to the claims of both sets of Claimants also led the SFO to pursue a criminal investigation

The SFO Documents comprise (a) documents provided to the SFO by third parties and (b) documents containing information provided to the SFO by third parties (including, in particular, transcripts of interviews with third parties and their witness statements).

I return to the relevance of the documentation in more detail later: for the present suffice it to say that there can be no real doubt, and (although the SFO was careful to emphasise that it could not “comment on the probative value of the underlying documents”) there was no dispute, as to the likely relevance of the SFO documentation in the context of these proceedings. The Defendant’s solicitors, having reviewed them at least twice, accept that they are such as would be required to be disclosed, leaving aside the confidentiality undertaking given by acceptance of the terms of the SFO’s letters. Counsel for the SL Claimants put it this way in their skeleton argument for this hearing:

“The SFO investigation concerned how the [alleged] fraud was carried out, by whom and who knew about it. The material is therefore not merely relevant to these proceedings, it goes to the very heart of the Claimants’ pleaded case against Tesco under section 90A of FSMA.”

The circumstances in which the SFO (a) obtained the SFO Documents from third parties (including the TPOs) and (b) thereafter disclosed them to the Defendant

This material had been obtained by the SFO during and for the purposes of its TSC01 investigation, generally by the use or prospective use of the SFO’s powers to compel the production of information and documents conferred by and pursuant to section 2 of the CJA 1987.

Such powers are effected through a production notice (a “section 2 notice”). Specifically:

Save for information and documents protected by legal professional privilege, and in the absence of a “reasonable excuse”, the obligation to provide documents or information of the type demanded in a section 2 notice overrides common law obligations of confidence, most statutory obligations of secrecy (see section 3(3) CJA 1987) and the privilege against self-incrimination (see section 2(8) CJA 1987).

Notices under section 2(2) or 2(3), as applicable, were issued to 21 of the 25 TPOs. Of the remaining four third parties:

Each section 2 notice contained a note in the following terms:

“NOTE: Any document or information obtained by the Serious Fraud Office (SFO) under Section 2 of the Criminal Justice Act 1987 may be disclosed by the SFO for the purposes of any criminal investigation or criminal proceeding or for any other permitted purpose. The SFO’s principal gateway for disclosing information is Section 3(5) of the Criminal Justice Act 1987. Notice of any disclosure will not necessarily be given to the provider of the document or information or to any other person.”

Section 3(5) CJA 1987 provides:

“Subject to subsections (1) and (3) above and to any provision of an agreement for the supply of information which restricts the disclosure of the information supplied, 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 government department or Northern Ireland department or other authority or body discharging its functions on behalf of the Crown (including the Crown in right of Her Majesty’s Government in Northern Ireland); (b)to any competent authority; (c)for the purposes of any prosecution in England and Wales, Northern Ireland or elsewhere; and (d)for the purposes of assisting any public or other authority for the time being designated for the purposes of this paragraph by an order made by the Secretary of State to discharge any functions which are specified in the order.”

In this case, the SFO Documents (and certain other materials) were provided to TSL and to the Defendant (its 100% parent company) in two stages. The first stage of disclosure, which did not comprise all the material, was disclosed in May 2016 in advance of negotiations for the DPA, to enable TSL and the Defendant to take advice on the desirability of entering into negotiations for a deferred prosecution agreement.

The second stage of disclosure took place in 2016 and 2017 after negotiations for the

The first of the two letters (dated 24 May 2016) stipulated that the advance disclosure material was being provided to the legal representatives of the two companies “in confidence for the purpose only of providing legal advice in relation to the criminal investigation being conducted by the [SFO]”. A second letter the next day (dated 25 May 2016) clarified (and narrowed) the extent of the confidentiality prescribed in the following terms:

“Confidentiality

The advance disclosure material is provided to the legal representatives of Tesco PLC in confidence for the purpose only of providing legal advice in relation to the criminal investigation being conducted by the UK Serious Fraud Office. The material must under no circumstances be disclosed voluntarily to any third party for use in any civil, disciplinary, employment or ancillary proceedings of whatever nature. If Tesco PLC becomes aware that it is, or may be, compelled by law or Court order to disclose the documents to a third party, it will promptly give the SFO written notice so as to enable the SFO to make representations or intervene prior to disclosure.”

Plainly, the Defendant is thus bound by two potentially conflicting obligations: the obligation of confidentiality as thus expressed (and subject to the limitations stated) on the one hand, and the obligation to give full and proper disclosure in these proceedings to enable their fair trial and disposition. For its part, the SFO naturally considers that the confidentiality assurances given to those who responded to section 2 notices are coextensive with the confidentiality obligations imposed on TSL and the Defendant: but that too needs consideration. Before turning to that, however, it is necessary to describe the process adopted to enable these matters to be determined, which has been multi-layered and complex.

The process preceding this hearing to enable the issues to be adjudicated on notice to potential objectors

By application notice dated 9 October 2017, the Defendant applied for permission to review the SFO Documents for the purposes of (a) ascertaining whether they were relevant and (b) listing them for disclosure in these proceedings. In response to that the SFO indicated that it was amenable to the application provided that a process was devised to enable it to notify relevant individuals about the proposed disclosure and inspection of the documents as it had stated it would in the section 2 notices.

By my order sealed on 6 December 2017 (“the Tesco/SFO Documents Order”) the Court set down a timetable for the Defendant’s relevance review and the SFO’s notification process, stipulating as part of the same order that the SFO should identify whether any public interest immunity or legal professional privilege was considered to attach to any of such documents.

The Defendant complied with that order and identified SFO Documents as being relevant for the purposes of disclosure. There was then something of a hiatus whilst the SFO considered the position and put before the Court (in July 2018) its concerns as to potential prejudice to the criminal proceedings (which had been expected to have ended by then but for which a re-trial had in the event been directed) if it consulted with third parties who were or might become witnesses in the criminal proceedings.

This occasioned a fairly long hearing also concerned with other matters of case management after which I determined that the SFO should proceed to notify all persons whose evidence or documents were proposed to be disclosed in a form approved, on an amended timetable (thus varying the Tesco/SFO Documents Order). That determination is encapsulated in my order of July 2018 (sealed on 20 July 2018, “the 20 July Order”). My reasons are set out in my approved oral judgment and postscript (for which the neutral citation is [2018] EWHC 2358 (Ch)).

Further to the 20 July Order, in late July 2018, each affected third party was contacted by the SFO, provided with a copy of all of the SFO Documents relating to them, informed of the risk of disclosure of that material in these proceedings and told that any objections would be determined at a hearing (“the Objections Hearing”) to be held on or after 15 October 2018. Third parties were required to submit any responses by 14 September 2018.

On 19 October, the SFO served the fifth witness statement of Raymond Neal Emson (“Emson 5”, to which I have referred earlier, see paragraph 19 above). This set out in the exhibit written responses from TPOs which, at least in the view of the SFO, amounted to third party objections for the purposes of paragraph 3F of the Tesco/SFO Document Order as varied by the 20 July Order.

Then, at a second Case Management Conference (“CMC 2”) heard on 23 to 25 October 2018, the Court ordered that, should the TPOs wish to file written representations to be considered at the Objections Hearing, they should do so by 4pm on 30 October 2018. At CMC 2, I heard preliminary submissions as to the conduct and ambit of the Objections Hearing, and as to the likely relevant factors to be taken into account. It appeared to me that TPOs having particular or private objections (personal to them, in other words, as distinct from issues as to the public interest) should be given an opportunity to state them.

Accordingly, following CMC 2 and at the Court’s invitation, the Government Legal Department (“the GLD”) on behalf of the SFO sent a letter to the TPOs on 26 October 2018 stating (amongst other things) that:

“The Court would be particularly assisted if objectors were to set out precisely what, as a matter of fact, they would wish the Judge to weigh in the balance against disclosure. For example, you might wish to draw the Court’s attention to specific personal concerns to you, or to some particular prejudice to you that you anticipate or fear might result from disclosure”.

A number of TPOs responded to the GLD’s letter of 26 October 2018, and these responses have been included in the 14 files relating to objections provided to me at the hearing to which this judgment particularly relates. It was submitted by the Claimants, and I think it is fair to say, that those responses broadly reiterated the general concerns the TPOs had outlined in previous correspondence but did not further particularise “specific personal concerns … or particular prejudice” that might result from disclosure of the SFO Documents.

I should also mention that amongst the orders made at CMC 2 (sealed on 2 November

Indeed, the purpose of all these orders and directions was to enable informed submissions at the Objections Hearing without foreclosing the issue as to the use that could be made outside the protection of a very restricted confidentiality ring.

The Objections Hearing itself was for the most part in public. However, in order to preserve individual privacy, a key was provided to enable the Court and those present to avoid naming individuals and disclosing personal details; and for a limited time I directed the hearing to be in private to deal with matters which I was persuaded were best thus dealt with.

The nature of the TPO’s objections

In the skeleton argument for this hearing Counsel for the SFO gave an overview of the objections received as follows:

“…most of the third party objectors who have (to date) set out their position in any detail, appear to be objecting to the disclosure of their documents on principle, taking into account the fact that the information and/or documents in question were provided under compulsion and in the reasonable expectation that they would be kept confidential.”

Most of the TPOs who set out their position in any detail had the benefit of legal advice and representation, although none in the end appeared before me either by an advocate or in person. The numbers or appellations attributed will not make much sense for the present but are shown by the following breakdown:

The SL Claimants and the MLB Claimants sensibly and constructively divided between themselves the task of further analysing the TPOs’ objections for the benefit and determination of the Court. For that purpose, they divided the TPOs into two main categories, with sub-categories as follows:

The common feature of all TPOs in category 1 is their reliance on the expectations they had by virtue of the SFO’s section 2 notices and the fact that they provided evidence and documents under compulsion, rather than on any specific concerns about privacy or confidentiality, or any reservations as to relevance. Category 2 TPOs relied on objections based on some specific individual concern, whether as to privacy and confidentiality or as regards relevance.

I address the positions of each of the numbered TPOs later. For the present, however, I need to consider a point made by the Claimants as to what I should treat as an “objection” such as to invite and require determination.

The Claimants submitted (correctly, in my view) that third party consent is not a requirement for the disclosure through a ‘gateway’ prescribed by section 3(5) CJA 1987 of documents containing material confidential to that third party and obtained by the SFO in the exercise of its powers under the CJA 1987. All that is required is that the third party must be notified properly and given the right to advance and elaborate representations in support of an objection to disclosure: see R (Kent Pharmaceuticals Ltd) v Director of the SFO [2005] 1 WLR 1302 at [25], [27], 36] and [42].

However, the Claimants went on from this to submit that disclosure of relevant material is the default position unless a third party puts forward a legitimate objection to such disclosure: in other words, in default of adumbrated objection, disclosure should follow (being an incident of the proceedings and express directions for disclosure made in the course of them). Alternatively, the Claimants submitted that the “objection” of a person who refuses to state on what basis he or she objects despite being invited to do so should be given little if any weight.

In the present case, the Claimants contended, the procedure (to which I have more generally referred above) provided for notification and afforded ample opportunity for objection. Thus, paragraph 3D of the 20 July Order provided that:

“The notification letter shall invite the third parties in question to state by 14 September 2018 whether they object to disclosure and inspection of the relevant SFO Document(s) and, if so, to set out the grounds for that objection in writing.”

The SFO was then required by paragraph 3E of the 20 July Order to notify the parties of any third-party objections. In the absence of any written objection, paragraph 3F provided that:

“As soon as reasonably practicable following receipt of the Third Party Notice, and in any event by 12 October 2018, Tesco shall provide disclosure to the SL Claimants and the MLB Claimants (and shall permit simultaneous inspection, subject to appropriate redactions for irrelevance and/or privilege) of all SFO Documents … in respect of which no third party objections have been received pursuant to paragraphs 3D and 3E above.”

The Claimants urged the conclusion that at least as regards all of the TPOs who had expressly stated in correspondence that they were neither consenting nor objecting and/or were “content for the matter to be determined by the Court” (TPOs numbered 1, 2, 3, 8, 13, 20, 22, 23, 24, 25), all of whom were legally represented and who the Claimants placed in a sub-category 1(a)), the Court should proceed as if they had made no material objection.

The SFO, on the other hand, submitted that these TPOs were thereby evincing “implicit objections” such as to necessitate the Court adjudicating as to whether the documents they had provided should be disclosed or not.

For my part, and as I indicated at the hearing, I consider this to be something of a storm in a tea-cup which I have felt necessary to address only out of deference to the tenacity with which it was pressed, especially by Mr Kitchener QC on behalf of the SL Claimants. In my view, both as a matter of pragmatism and because this seems to me to be consistent with what I interpret to be the position and desire of category 1(a) TPOs, the Court should adjudicate upon the matter, in a context in which documents have in fact been obtained by the use of compulsive powers by an emanation of the state, unless the relevant third parties have actually expressed their consent. As I remarked during the hearing, the difference between non-objection and consent is frequently noted, not least in the context of interlocutory relief, and is as valid here as it is in those albeit rather different contexts.

For similar reasons, I likewise consider that an explicit but unreasoned objection

The Claimants also sub-divided TPOs in category 2 into two categories. Category 2(a), comprised of TPOs numbered 7, 9,10, 15, 16 and 18, raised objections based on matters specific to their personal positions. TPOs numbered 17 and 19 each raised objections based on the propositions that (a) SFO transcripts attract litigation privilege; (b) the SFO transcripts should not have been disclosed to the Defendant or,

Before dealing with these objections (in all categories) I turn to discuss the general principles to be applied when doing so, which were the subject of extended argument.

Submissions on the applicable legal principles

I start with three preliminary points. First, I think it is important to re-emphasise at the outset of this part of this judgment that, though for the purposes of analysis I may depict the arguments of the SFO on the one hand and the Claimants on the other as being opposing, the SFO stressed that its role was as a “self-appointed amicus”, though with a brief also to ensure that the Court was aware of the substance of and any strength in the objections (both implicit and express) that it had been sent. My references to ‘competing’ submissions should be read as a shorthand and understood accordingly.

Secondly, the SFO distinguished (as, in my view, is necessary and appropriate) between “public interest” and “private interest” confidentiality. Both the SL Claimants and the MLB Claimants were broadly content to adopt the distinction, but the SL Claimants further defined the terms as follows (I consider accurately):

Thirdly, and before summarising the arguments put forward on behalf of the SFO and the Claimants, it is convenient to set out the parts of the CPR which were referred to by analogy, though all concerned agreed that the particular circumstances of this case mean that none seems to be plainly and exclusively engaged. Those rules are:

The difficulty in this case is the product of the fact that the SFO Documents are only in the control now of the Defendant further to (a) the exercise of powers of compulsion in which obligations of confidence were given and relied upon and (b) the release of such documents (despite such obligations) through an established gateway but on the express basis of confidentiality and privacy. It is at least arguable that the differentiation in the CPR between (a) documents held by a party (b) documents held by a third party and (c) documents held subject to the prohibition against collateral use does not fairly reflect the position in this case where it is argued that though the documents are in the possession of a party, they were provided by a third party on terms as to confidentiality and were (as to the most part) generated in a context where it was understood that no collateral use should be made of them. Thus, looking at the realities, it is arguable that none of these rules quite fits the circumstances. I turn to the ‘competing’ arguments as to how these difficulties should be resolved. SFO submissions

The SFO’s helpful skeleton argument, provided to the Claimants (and to the Court) in advance of their own, summarised the propositions it submitted should be derived from its review of the law as follows:

Very broadly, the SFO summarised the TPOs’ preponderant view as to the test to be applied in striking the requisite balance in the present case as being closest to an application for release from an undertaking against collateral use such as that found in CPR 31.22(1) (in which case, the balancing exercise is less inclined in favour of disclosure).

However, the SFO suggested that the Court “might think it strange” if the documents were to be better protected by dint of their disclosure as part of the DPA process than they would have been if they were in the hands of a third party and CPR 31.17 applied. CPR 31.17 stipulates a more conventional balancing exercise or judgment (such as that required in Frankson v Home Office [2003] 1 WLR 1952); the necessity of disclosure in order to dispose fairly of the claim is weighed against the public and private interests in confidentiality, with the former to override the latter where the necessity is clear and substantial.

Although Counsel for the SFO was careful to explain fully, but not to espouse strongly, any particular argument, it seemed to me that ultimately the logic of its position was that the SFO favoured and recommended to the Court the same approach in essence as in the context of CPR 31.17 as explained in Frankson (supra), thus importing the test of ‘necessity’. However, Counsel for the SFO floated the possible rider, which became a focus of dispute, that in that case necessity was established because the documents in question were “potentially critical evidence”, from which might be extrapolated a test requiring the documents in question to be central to the case, or at least such that a trial would be skewed if they were not disclosed.

There were differences in emphasis as between the SL Claimants and the MLB Claimants in the way they formulated their submissions.

In summary, the SL Claimants placed greater emphasis on characterising this case simply as one of inter partes disclosure, where (unlike strangers to the suit) the parties were under a “fundamental obligation” to give disclosure; CPR 31.17 had no application, since this was not an application against a third party; and still less did CPR 31.22, since this was not an application for the subsequent use of disclosed documents.

On their behalf Mr Kitchener QC described his “essential proposition” as being “that the disclosure of documents in the possession of a party that are relevant and that are or may be adverse to its case is necessary for dealing with a case justly”. As to what is “necessary”, he submitted that “…necessity sounds like it may be a high test, but it is not”: if the documents in question could confer a ‘litigious advantage’, or their nondisclosure result in a ‘litigious disadvantage’ (phrases culled from the authorities as elaborated later), then the test was satisfied, and the documents should be disclosed and produced.

He submitted further that “[t]here is no elevated test…[which]…applies to disclosure where rights of confidence are possessed by third parties.” In any event, he submitted that the documents in question “are prima facie of key significance”; and in the context especially of allegations of fraud, they should plainly and obviously be disclosed. The only exception might be if the person in possession of the documents in question could show that materially the same document or information was readily available from another non-confidential source.

These submissions were elaborated by reference to the case law as follows:

The MLB Claimants urged the same conclusion as the SL Claimants that the documentation in question in this case should all be produced. But Mr de Verneuil Smith on their behalf adopted a more nuanced approach, accepting that the case could not be characterised so simply, given the nature of the documents, their source, and the conditions under which they had been generated and then subsequently passed on to the Defendant.

He submitted that even if (as indeed he contended) neither CPR 31.17 nor CPR 31.22 was applicable (for the reasons given by the SL Claimants), the test of proportionality and the requirement to exercise all judicial discretions under the rules in pursuance of the overriding objective set out in CPR 1.1(1) and (2) required consideration of all these factors and a balancing exercise accordingly.

Mr de Verneuil Smith’s overarching point was that since the introduction of the CPR, the test of ‘necessity’ was subsumed within the test of proportionality, and that whether or not a particular part of CPR 31 referred to the ‘necessity test’ (contrasting CPR 31.12 which does not and 31.17 which does) it is always likely to be a factor where the disclosure sought may impact on other interests and the Court’s task is to strike a just and proportionate balance between the competing interests involved.

Mr de Verneuil Smith referred me in this regard to the decision of the Court of Appeal in National Crime Agency v Abacha and others [2016] 1 WLR 4375, which concerned an application under CPR rule 31.14 (which contains no express reference to a ‘necessity’ standard) for specific inspection of a document referred to in witness statements. He cited in particular the following passages (at [31] to [32]) in the judgment of Gross LJ (with whom Hamblen LJ and Sir Colin Rimer agreed):

“…it was not argued before us and there is nothing to suggest that the RSC approach to confidentiality has changed under the CPR…Accordingly, while disclosure and inspection cannot be refused by reason of the confidentiality of the document in question alone, confidentiality (where it is asserted) is a relevant factor to be taken into account by the court in determining whether or not to order inspection. The court’s task is to strike a just balance between the competing interest involved – those of the party asserting an entitlement to inspect the documents and those of the party claiming confidentiality in the documents. In striking that balance in the exercise of its discretion, the court may properly have regard to the question of whether inspection of the documents is necessary for disposing fairly of the proceedings in question: see…[the Nassé case]…

….

…differing from the judge, I am not persuaded that that there is some freestanding “necessity” case which needs to be satisfied before permitting inspection where CPR 31.14 is otherwise satisfied. In this regard, the CPR differ from the previous regime contained in RSC Order 24, though, as already demonstrated, the question of whether inspection is “necessary to dispose fairly” of the application or case is not rendered irrelevant – and may well arise in the context of proportionality or that of confidentiality. On this analysis “necessity” is or may be (depending on the facts) a relevant factor in striking the just balance; it is not a free-standing hurdle to be considered and surmounted in isolation before inspection may be permitted.”

Consistently with his acceptance of the discretionary nature of the Court’s jurisdiction, and the need to balance competing considerations by reference to the overriding objective (including proportionality, and within that “necessity”), Mr de Verneuil Smith acknowledged the need to look at the facts relevant to each objection; but he emphasised four points which he submitted were relevant across the board, as follows:

Thus, put shortly, the MLB Claimants favoured a more balanced, and fact-sensitive approach, more in line overall with that of the SFO; whereas the SL Claimants favoured an almost binary approach: if relevant and material in terms of being likely to confer a litigious advantage then confidentiality could provide no answer and disclosure should be ordered.

Nevertheless, as I have stated, both sets of Claimants urged the same conclusion, and before turning to my own conclusions as to the applicable principles, I should address a line of authorities they all relied on (despite the MLB Claimants warning that they were pre-CPR) as being of special closeness to the position in this case, and as thus offering particularly apposite guidance.

The cases concerned are the Wallace Smith case (which I have already mentioned above) and two further cases which appeared to adopt its approach. These decisions were submitted by the Claimants to support strongly what they contend should be the result in this case.

The Wallace Smith case involved an application by the claimant (an insolvent bank acting by its liquidators) against the defendant accountancy firm (the insolvent company’s auditors) for the production and inspection of SFO transcripts and tapes of interviews with a partner and an employee of the defendant firm. These interviews had been conducted under section 2 CJA 1987 as part of an investigation into the insolvent bank and, in particular, as to whether its business was being fraudulently conducted. The application was for inspection (rather than discovery) of the tapes and transcripts and was brought under RSC Order 24 rule 13, which prescribed that no order should be made unless the Court “is of opinion that the order is necessary either for disposing fairly of the cause or matter or for saving costs.”

The defendant firm contended that the test was not satisfied and that the application was misconceived: the liquidators had already been provided with witness statements of two of the bank’s directors (Mr Davies and Mr Ginsberg) and the actual evidence given at an earlier criminal trial of its chairman and managing director (Mr Wallace Duncan Smith), as well as other evidence previously disclosed and produced, and it was submitted that although “[t]he liquidators might be curious about the contents of the tapes…that was not enough” [page 266G]. The defendant firm also claimed that the tapes and transcripts were protected from production by the principles of public interest immunity. The liquidators denied the claim to public interest immunity; and, rejecting the suggestion to the contrary, contended that the tapes and transcripts, which were plainly and accepted to be relevant, were equally plainly ‘necessary’ in that they were: (a) fuller and more contemporaneous than the witness statements; (b) likely to contain frank and unedited answers to questions posed by experienced investigators who had by then acquired a detailed knowledge of the case, and insights

At first instance, Carnwath J (as he then was) dismissed the application, essentially on the basis that he was not satisfied that the production of the documents was “‘necessary’ for the fair disposal of the cause or matter” (though he did not himself inspect them). He rejected the claim to public interest immunity. The Court of Appeal reversed the decision on the first point and remitted the matter back to the judge for him to inspect the documents, whilst upholding the decision as to public interest immunity. All three members of the Court concluded (without inspecting the documents) that the tapes and transcripts were “undoubtedly likely to contain material necessary for the fair disposal of the action” (per Neill LJ at page 268C) for all the reasons advanced by the liquidators. In such circumstances, despite the fact that they came into being under statutory compulsion, and should be treated as confidential, any interest (public or private) in confidentiality was likely to give way to the overriding public interest in the production of all material in the control of a party which was ‘necessary’ for disposing fairly of the proceedings at trial. The Court of Appeal also stated that production of documents which were accepted to be relevant should not be denied unless “the court has examined the documents and considered them in the light of the material already in the applicant’s possession” (pages 267H to 268A). I asked Counsel whether in the end, when remitted to him for inspection of the documents, Carnwath J ordered production: but though their supposition was that he did, none could say for sure.

The Wallace Smith case is obviously of considerable import in the circumstances of this case. It is of note also in that the documents were, as in this case, produced after the event: they were not source material in the usual sense; and they would not have existed or been available but for the SFO investigations.

The two further cases where its reasoning was followed and on which both sets of Claimants relied are British and Commonwealth Holdings plc (in administration) v

The B&C Holdings case also concerned an application under RSC Order 24 rule 13, this time for production on the application of a defendant in proceedings brought by B&C of transcripts of evidence given to Department of Trade Inspectors which were in the possession of other parties to such proceedings. The applicant itself had transcripts of evidence given to such Inspectors by its own employees. It was a feature of the case that all the parties to the proceedings had some of the transcripts and one or two parties had all of them: so that as Neuberger J (as he then was) accepted there was “considerable force in the argument…on behalf of [the applicant] to the effect that it is desirable to have a ‘level playing field’ with all parties to the litigation having all the transcripts” (see page 100d). In acceding to the application and ordering production Neuberger J stressed also: (a) the risk of unfairness to the applicant and all parties, and the litigious disadvantage of denying production; (b) the likely advantage of contemporaneity (the interviews the subject of the disputed transcripts having taken place some two to (a maximum of) four years after the crucial events, whereas the witnesses at trial would be giving evidence some 12 years after such events (see page 102a-c)); and (c) although itself costly and time-consuming a requirement for production could not plausibly be characterised as oppressive (see page 105c).

The Real Estate case concerned transcripts or records of statements made to the Financial Services Authority (“the FSA”) in the course of an investigation under FSMA. It was accepted that the documents were subject to strict confidentiality restrictions under section 348 FSMA. Nevertheless, the Court of Appeal upheld the decision at first instance to order production. It is not, with respect, altogether easy to discern from the judgment of Arden LJ (as she then was) what parts are recitation of argument and what parts constitute her own conclusions; but it appears that she agreed with the submissions of the applicant to the effect that neither the fact of compulsion nor the confidentiality restrictions were such as to prevent production. (Mr Sumption QC, for the applicant, had argued that the elements of compulsion and confidentiality were not relevant.)

It is right to note at this stage that against all this, the SFO suggested that none of the cases is really on all fours with this one, principally because (so Ms Wakefield submitted on its behalf) in each of those other cases, the disputed documentation was, as it were, the respondent’s own (directly or via its employee(s)): she suggested that it had not obtained the document from the SFO, the FSA or the DTI, in contrast to the position in the present case. That, Ms Wakefield suggested, makes this case “perhaps closer to a third-party style case rather than a standard party/party case”. However, I am not convinced she is right about either the factual premise or her suggested conclusion from it. It is not entirely clear from any of the cases how in each case the respondent to the application had obtained the documents; but, to my mind, it seems likely that they came from the person who had undertaken the interviews at the request of the respondent, as in this case.

I turn to my own conclusions as to the applicable legal principles in the circumstances of the present case.

In my view:

It is then necessary to determine how these principles should be applied in the present case in light of the objections put forward.

In agreement with the Claimants, and I think the SFO as a quasi-amicus, this case does not (subject to paragraph 82(10) below) in form or substance fall within or engage the test prescribed by, and the cases decided in relation to, CPR 31.22.

Nor, strictly, is CPR 31.17 engaged. Disclosure and production are sought from an existing party to the proceedings. Accordingly, the test of necessity, which (as noted above) is expressly retained in CPR 31.17(3)(c), but not in CPR 31.6 or 31.12, is not expressed to apply. The question is therefore whether in the particular circumstances the objective of dealing with the case justly and at proportionate cost can be achieved without disclosure of the relevant documents.

I address first the issue of public interest confidentiality in the context of the fact that the documents in question were obtained or created under compulsion. As to this:

Before considering whether any protections may be provided for to seek to reduce any invasion of privacy or breach of confidentiality, I confirm that in reaching these conclusions I have had in mind and taken careful account of the more particular objections floated or advanced on behalf of specific TPOs.

In that regard, I can state first my views in respect of TPOs who I have taken to object but who do not rely on any personal confidence or special privacy:

Lastly certain TPOs (TPOs 7, 9, 10, 15, 16, 17, 18 and 19) have suggested personal reasons based on private interests for their objections: I deal with these under headings below, both to explain why I have not been persuaded that any is such as to tip the balance against production, and also with a view to assessing whether any, and if so what, protective measures might be proportionate and effective. TPOs 7, 9, 15 and 16

TPOs 7, 9, 15 and 16 were represented by the same highly regarded City solicitors’ firm. TPOs 9, 15 and 16 have all consented to their witness statements being disclosed in these proceedings, but they object to disclosure of their SFO interview transcripts. In the case of TPO 9, objection is also taken to disclosure of an exhibit to his witness statement. (TPO 7 has not prepared a witness statement.)

I accept the MLB Claimants’ argument that the evidence of each of these TPOs is important:

Nevertheless, and in addition to objections based on public interest confidentiality which I have already taken into account, along with expectations of privacy and confidentiality, each objects to disclosure on the basis that the interview transcript is said to contain personal information which is irrelevant to the civil proceedings, including information about: (a) their professional history, external career opportunities and aspirations, family life and situations, financial position and prospects, and mental and physical health; and (b) their several opinions about the business, their colleagues, and their mental health. It is also suggested in a detailed annex to a letter to the GLD from the solicitors acting for these TPO that the transcripts in question:

“generally, contain discursive and in some cases slightly confused evidence, as our client made their best attempts to respond to the SFO’s choice of questions in respect of events from years earlier in the context of a compelled interview, with limited documents.”

In the same annex the point is also made that the SL Claimants in particular are very numerous and that:

“disclosure of the Transcripts in the Civil Proceedings would therefore represent a wide dissemination of information that was given in confidence and contains private details about the lives of our clients, their thoughts, opinions and feelings.”

However, these TPOs’ objections are stated without identifying particular passages and without proposing any redactions which would alleviate these concerns. The solicitors acting for the three TPOs have confirmed by letter to the GLD that each of their clients would maintain their objections even if limited redactions were made, and that in any event they were not in a position to advise on any redactions for want of funding. In view of the latter point, they have proposed that if disclosure is required by the Court, “the defendants in the first instance redact the material to remove any information which is (i) not strictly relevant; and (ii) personal and/or sensitive”. In the last resort, they leave the matter to the Court:

“If the Court is not minded to order that the Transcripts not be disclosed, we would ask that any sections of the Transcripts which are not directly relevant to the Civil Proceedings be redacted. That is on the basis that the Transcripts are confidential…, and in any balancing act undertaken between the public interest in their continued confidentiality on the one hand, and the public interest in the fullest possible evidence being available in the Civil Proceedings on the other, the former must prevail in respect of any and all information which is not strictly required to be disclosed in the Civil Proceedings.”

That proposal to remit the task of redaction to the Court or the Defendant puts the Court in some difficulty. If discrete passages can be identified in the transcript which can be redacted without materially affecting the sense or substance of the evidence relevant to the issues in the proceedings, I agree that such redactions should be made as a condition of disclosure. However, and though I appreciate that funding constraints may have dictated this course, leaving the task of redaction to the Court or the Defendant, as is proposed, is less than satisfactory. Neither the Court nor the Defendant can realistically identify every particular or peculiar sensitivities which may seem obvious to the person whose privacy is sought to be protected, especially where the sensitivity arises in more general circumstances or in a context of which the Court or the Defendant cannot reasonably be expected to be aware.

I should add that the difficulties seem to me to be particularly acute in the case of the documents in question, since after a brief review of them, I have found it difficult to identify matters of real personal sensitivity; as I put it at the hearing, there are passages which simply provide what might be described as domestic, sometimes humdrum, context but:

“It’s not the sort of stuff which is a window into their souls or private lives or families or work or anything like that…”

I consider that it must be left to the relevant TPOs to identify what they regard as truly private, confidential passages that may be redacted without undermining the substantive content of the document in terms of the issues in the proceedings. I am prepared to give some additional time to enable these TPOs to identify any specific text which they consider to be seriously prejudicial, but not to exercise my discretion against production, nor to agree to deletions or redactions which erode the potential value of the document in terms of the fair disposition of the case.

TPO 10 (who, unlike TPOs 9, 15 and 16, has not prepared a witness statement) objects to the production of his SFO interview transcript on two grounds:

From a limited review of his transcript it appears that:

As in the case of TPOs 7, 9, 15 and 16 I shall allow a limited time to TPO 10 to identify any specific text which he considers to be seriously prejudicial to his private interests, but not to exercise my discretion against production, nor to agree to deletions or redactions which erode the potential value of the document in terms of the fair disposition of the case.

TPO 18 objects to disclosure and inspection in these proceedings of: (a) the transcripts of his interviews with the SFO conducted under s.2 CJA 1987; (b) the witness statement that he provided to the SFO; and (c) the exhibits to that witness statement.

As the Claimants were quick to point out, and as must colour my approach very significantly, TPO 18’s evidence is of central importance to this case. TPO 18 is the whistle-blower whose actions led to Tesco’s profit overstatements being revealed to the market, and whose team compiled the legacy paper that was central to that process. He was the chief witness for the prosecution at the first criminal trial. He is a senior accountant who reported directly to TPO 25 (the UK Finance Director and an alleged PDMR), and who attended a number of meetings with TPO 23 (the UK Managing Director and an alleged PDMR) that were relied upon by the prosecution in the first criminal trial as establishing knowledge of the overstatements on the part of TPO 23. His interview transcripts and witness statement deal extensively with these matters.

TPO 18 raises the following objections to disclosure in these proceedings:

The MLB Claimants, supported by the SL Claimants, stress the following points:

I enquired of the SFO at the hearing whether there were any special protections for whistle-blowers in such a position. Ms Wakefield told me that, there being no public interest immunity interest or concerns, there was no specific or special protection of which the SFO was aware. Very fairly she put it this way:

“[He] doesn’t fall within particular statutory protection for whistleblowers and so on. We’re not aware of any particular case saying that there’s any particular body of rights held by a whistleblower. However, your Lordship may well think it relevant that he was a whistleblower, in that he came voluntarily, [and there is] the chilling effects argument that we’ve been discussing earlier in respect of public interest confidentiality…”

Although Mr de Verneuil Smith submitted that “when we get to probative value there’s an embarrassment of riches in respect of this particular objector”, I have had to consider whether there is anything in the transcripts which cannot be expected sufficiently to emerge from the documentation and from the evidence he has already given, and weigh that against what I would be minded to accept is a particularly

“weighty” factor of safeguarding a whistle-blower’s privacy and confidentiality. In my judgment, however, the transcripts are likely to offer a plain and obvious litigious advantage to the Claimants; whilst their non-disclosure would put the Claimants at a litigious disadvantage to the Defendant. The identity of the whistle-blower is no secret; and the confidentiality argument has been considerably eroded by the fact of his previous evidence in Court. I would be disposed to permit TPO 18 an opportunity to suggest redactions for entirely private material: but not such as to erode the substantive value of the transcripts; and subject to that I would not prevent disclosure.

TPOs 17 and 19 object to disclosure on the basis that: (a) the contents of their SFO transcripts attract litigation privilege; (b) the SFO transcripts should have been disclosed to Tesco subject to a confidentiality undertaking; and (c) they would not have been compelled to give such extensive evidence in the context of the civil proceedings.

I agree with the Claimants that none of these points is such as to prevent disclosure:

TPOs 17 and 19 have not otherwise articulated any grounds for private interest confidentiality nor for public interest confidentiality not previously addressed. I would accept that their SFO transcripts are likely to contain material of considerable potential relevance for the reasons stated by the SL Claimants, being:

There was some suggestion that TPOs 17 and 19 might have made witness statements which they were prepared to disclose (though they had not yet done so) and which might enable part of the information to be conveyed in that way consensually. I take this into account; but I do not attach great weight to it, in view of the likely comprehensiveness and greater contemporaneity of their SFO transcripts.

In the circumstances, I accept the Claimants’ argument that TPO 17 and 19 have not raised any private interest and/or public interest confidentiality that would give

Should any further restrictions be imposed?

I have indicated above that those of the TPOs who have raised personal concerns and a general wish to redact discrete parts of their evidence should be afforded a reasonable (but short and finite) opportunity to identify them, subject to the constraints I have sought to state.

In that interval, it will be necessary for the SFO Documents in question to be kept tightly confidential on the same conditions as at present. That does not apply to SFO Documents not subject to such special considerations. But then the question arises what if any further restrictions might be imposed in order to protect confidentiality as far as practicably possible notwithstanding disclosure, as is required (as emphasised in Frankson, especially at page 1968 A-B).

In Frankson the judge at first instance imposed extensive restrictions (which were apparently approved by the Court of Appeal in dismissing the appeals), to protect confidentiality and with a view to maintaining the court’s control over what use could be made of the material at trial, including the following (see page 1959 F-H):

In conclusion, therefore, I do not consider that any of the objections to disclosure of the documents in question is such as to warrant what would be an unusual, and it may be in the context of an application by one party against another, unprecedented, order preventing their production.

Subject to the possibility of imposing restrictions, I am firmly of the view that it would not be just to deny the Claimants production of the documents which the Defendant

However, I should like to consider further whether there may be means of mitigating the adverse consequences. It may be that this may be done by further written submissions, but I think it likely that a short further hearing may be required.