Judgment - Taylor and Others v. Director of the Serious Fraud Office and Others  continued

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    In later cases there has been some discussion of the general principle upon which this extension was based. Judges have rightly cautioned against further extension merely by analogy. In Mann v. O'Neill (1997) 71 A.L.J.R. 903, 912 McHugh J. identified two dangers in judicial reasoning - a Scylla and Charybdis through which it was necessary to navigate. The first was:

     ". . . the temptation to recognise the availability of the defence for new factual circumstances simply because they are closely analogous to an existing category (or cases within an existing category) without examining the case for recognition in light of the underlying rationale for the defence."

On the other hand, there was an opposite peril in:

     ". . . the temptation too readily to dismiss the defence as applicable in novel circumstances because the case is not within or analogous to an existing category but without determining the matter by reference to the defence's underlying rationale."

    There is no doubt that the claim for absolute immunity in respect of statements made by one investigator to another (as in the case of the letter from the S.F.O. to the Attorney-General of the Isle of Man) or by an investigator to a person helping with the inquiry (as in the statements of Ms McKenzie recorded in the file note) or to an investigator by a person helping the inquiry who is not intended to be called as a witness (as in the remarks of Mr. Rogerson included in the file note) is a novel one. So far as I know, it is not a category of absolute immunity which has been considered before. But it should not for that reason be rejected. Again, I would imagine that the reason why this question now arises for the first time is that before the broadening of the prosecution's disclosure obligation, such letters and memoranda, internal to the investigation, would never have seen the light of day. At any rate, the question is now whether they fall within the underlying rationale for the existence of immunity from suit.

In Mann v. O'Neill (1997) 71 A.L.J.R 903, 907 the judgment of Brennan C.J., Dawson, Toohey and Gaudron L.JJ. describes the rationale as one of necessity:

     "It may be that the various categories of absolute privilege are all properly to be seen as grounded in necessity, and not on broader grounds of public policy. Whether or not that is so, the general rule is that the extension of absolute privilege is 'viewed with the most jealous suspicion, and resisted, unless its necessity is demonstrated.' Certainly, absolute privilege should not be extended to statements which are said to be analogous to statements in judicial proceedings unless there is demonstrated some necessity of the kind that dictates that judicial proceedings are absolutely privileged."

    Thus the test is a strict one; necessity must be shown, but the decision on whether immunity is necessary for the administration of justice must have regard to the cases in which immunity has been held necessary in the past, so as to form part of a coherent principle.

    Approaching the matter on this basis, I find it impossible to identify any rational principle which would confine the immunity for out of court statements to persons who are subsequently called as witnesses. The policy of the immunity is to enable people to speak freely without fear of being sued, whether successfully or not. If this object is to be achieved, the person in question must know at the time he speaks whether or not the immunity will attach. If it depends upon the contingencies of whether he will be called as a witness, the value of the immunity is destroyed. At the time of the investigation it is often unclear whether any crime has been committed at all. Persons assisting the police with their inquiries may not be able to give any admissible evidence; for example, their information may be hearsay, but nonetheless valuable for the purposes of the investigation. But the proper administration of justice requires that such people should have the same inducement to speak freely as those whose information subsequently forms the basis of evidence at a trial.

    When one turns to the position of investigators, it seems to me that the same degree of necessity applies. It would be an incoherent rule which gave a potential witness immunity in respect of the statements which he made to an investigator but offered no similar immunity to the investigator if he passed that information to a colleague engaged in the investigation or put it to another potential witness. In my view it is necessary for the administration of justice that investigators should be able to exchange information, theories and hypotheses among themselves and to put them to other persons assisting in the inquiry without fear of being sued if such statements are disclosed in the course of the proceedings. I therefore agree with the test proposed by Drake J. in Evans v. London Hospital Medical College (University of London) [1981] 1 W.L.R. 184, 192:

     ". . . the protection exists only where the statement or conduct is such that it can fairly be said to be part of the process of investigating a crime or a possible crime with a view to a prosecution or a possible prosecution in respect of the matter being investigated."

    This formulation excludes statements which are wholly extraneous to the investigation - irrelevant and gratuitous libels - but applies equally to statements made by persons assisting the inquiry to investigators and by investigators to those persons or to each other.

    As the policy of the immunity is to encourage freedom of expression, it is limited to actions in which the alleged statement constitutes the cause of action. In Marrinan v. Vibart [1963] 1 Q.B. 528 the Court of Appeal held that the immunity in respect of statements made in court or with a view to a prosecution could not be circumvented by alleging that it formed part of a conspiracy with other witnesses to give false evidence. That seems to me to be right. On the other hand, the immunity does not apply to actions for malicious prosecution where the cause of action consists in abusing legal process by maliciously and without reasonable cause setting the law in motion against the plaintiff. It does not matter that an essential step in setting the law in motion was a statement made by the defendant to a prosecuting authority or even the court: see Roy v. Prior [1971] A.C. 470.

    Actions for defamation and for conspiracy to give false evidence plainly fall within the policy of the immunity and actions for malicious prosecution fall outside it. In between, there is some disputed ground. In Evans v. London Hospital Medical College (University of London) [1981] 1 W.L.R. 184 Drake J. held that it precluded reliance on the statement in an action for negligence in which it was alleged that a carelessly prepared post mortem report had led to the plaintiff being unjustifiably arrested and charged with murder. I express no view on this case, which I think might nowadays have been decided on the ground that the defendants owed the plaintiff no duty of care. There is also some dispute over whether it applies to the emergent tort of abuse of public office. In Silcott v. Commissioner of Police for the Metropolis (1996) 6 Admin. L.R. 633 and again in Docker v. Chief Constable of West Midlands Police (unreported), 17 March 1998, Court of Appeal (Civil Division) Transcript No. 472 of 1998, the Court of Appeal decided that it did while in Bennett v. Commissioner of Police for the Metropolis (1997) 10 Admin. L.R. 245 Sir Richard Scott, V.-C. decided that it did not. The point has not been argued before your Lordships and I therefore likewise express no view. But I am satisfied that the Court of Appeal was right in holding that the statements relied upon in this case were protected by absolute immunity and for that reason also I would dismiss the appeal.


My Lords,

    The plaintiffs in this case are Mr. Taylor, who is an English solicitor practising in the Isle of Man, and Monarch Assurance Plc., an Isle of Man company of which Mr. Taylor is the managing director. Their action is one of damages for defamation. It is based entirely upon the contents of two documents.

    The first document is a letter dated 4 May 1994 which was sent by the second defendant Katherine McKenzie, an investigating lawyer employed by the first defendant, the Serious Fraud Office (the S.F.O.), to the Attorney- General of the Isle of Man. It was a letter of request which was written in connection with an investigation which was being carried out in the S.F.O. into an allegation of fraud committed within the United Kingdom by Charles Deacon and James Fuller and by another man named John Patrick Savage who later died. The request was for assistance to enable enquiries to be undertaken in the Isle of Man under the Criminal Justice Act 1990 (Isle of Man). The second document is a file note which was prepared on 14 May 1994 by the second defendant following a meeting which took place on that date as part of the same investigation at the Solicitors Complaints Bureau. At that meeting the second defendant was accompanied by Detective Inspector Hulse of the Staffordshire Police. They had gone to see the fourth defendant, an employee of the third defendant, the Law Society, to obtain information from him about how the compensation fund could be expected to work in the circumstances of the alleged fraud. The plaintiffs maintain in their Statement of Claim that the letter and the file note contain words which, in their natural and ordinary meaning, are defamatory of them because they allege that they were involved in the fraudulent activity which was being investigated.

    A copy of the letter was retained within the office of the S.F.O. together with the file note as part of the papers relating to the investigation. Some months later the criminal proceedings which had been commenced against Deacon and Fuller were transferred to the Crown Court. On 24 October 1994 the solicitors for Deacon and Fuller received from the S.F.O. under the common law disclosure rules material falling within the category of "unused material" which included these two documents. In May 1995 Mr. Taylor was asked by counsel representing Fuller whether he would be willing to assist him with his defence. A meeting with him was then arranged, and in order to enable him to prepare for it he was shown a number of documents. These included the copy letter and the file note which had been disclosed to the solicitors by the S.F.O. In January 1996 Deacon and Fuller were convicted of conspiracy to defraud after a trial in which Mr. Taylor did not, in the event, give evidence. Neither of the two documents were produced or referred to at the trial. The second and fourth defendants were not called upon either by the Crown or by the defence to attend the trial as witnesses.

    Two points emerge clearly from this brief narrative. The first is that, had it not been for the obligation which rested on the S.F.O. under the common law disclosure rules, these two documents would never have been seen by Mr. Taylor or by anyone else who was not involved in the investigation by the S.F.O. into the alleged fraud. The copy letter and the file note would have remained on the S.F.O.'s files. There would have been no dissemination to anybody outside its office of any defamatory material which was contained in them. The second is that, as none of the defendants were witnesses or potential witnesses at the trial, they do not have the protection of the absolute privilege which is available in respect of what is said in court by witnesses and in statements which are taken when the case is being prepared for trial by potential witnesses: Watson v. M'Ewan [1905] A.C. 480.

    Two further points need to be made about the common law disclosure rules in order to set these issues into their proper context. The first point relates to the scope of these rules. They have provided the basis for the rules which have now been introduced by statute: see sections 1--21 of the Criminal Procedure and Investigations Act 1996. By October 1994, when the material which is relevant to this case was disclosed by the S.F.O., it was no longer enough to disclose details of the evidence which the prosecution proposed to use at the trial. The duty extended to "unused" material as well, namely to material which the prosecution had decided not to use but which might be useful to the defence. It extended to statements taken from witnesses whom the prosecution had decided not to call at the trial, to items which the prosecution had decided not to exhibit but which the defence might wish to use in support of the defence case and to all manner of other material, irrespective of whether it would be admissible in evidence, which might possibly be helpful to the defence or damaging to the prosecution case. In the interests of ensuring a fair trial the duty had been extended far beyond the original concept of giving fair notice to the defendant of the case which he had to meet. And the consequences of non-disclosure had become so serious for the administration of justice--the setting aside of a conviction, with the prospect of much adverse publicity--that in practice the duty extended to everything on the prosecutor's files which could not be made the subject of a specific request for non-disclosure. Thus the correspondence, file notes and working papers of investigators, which in the past would have been regarded as purely internal to the prosecutor and not available at all for defence scrutiny, had now become disclosable.

    The second point is the recent origin of this development. It first found expression in the Attorney-General's Guidelines Practice Note (Criminal Evidence: Unused Material) [1982] 1 All E.R. 734. But the extent of the modern common law rules was not clearly established until a series of cases in which the Court of Appeal held that a failure to disclose what ought to have been disclosed was an irregularity in the course of the trial. This enabled the court to hold that the conviction was unsafe: Regina v. Maguire [1992] Q.B. 936; Regina v. Ward (Judith) [1993] 1 W.L.R. 619 and Regina v. Davis [1993] 1 W.L.R. 613. The history of the matter was described in Regina v. Brown (Winston) [1994] 1 W.L.R. 1599, [1998] A.C. 367. The fact that the development is so recent is important, as one compares the modern law rules about disclosure with the absolute immunity which is given to witnesses for things said in court and in statements taken from potential witnesses. Central to the present case is the question whether the law about the immunity of witnesses and potential witnesses, which was settled by authority long before the evolution of the modern disclosure rules, is in need of some adaptation or adjustment in order to keep pace with the widening of the disclosure rules.

    In my opinion it is necessary here, as in so many matters affecting the criminal law, to balance the public interest in the administration of justice against the interests of the individual. The history of the evolution of the disclosure rules shows that the balance has swung a long way towards the interests of the individual who is being prosecuted. This is in recognition of the fact that the defendant in criminal proceedings has the right to insist on a fair trial. Fairness to the defendant demands the widest possible disclosure. In practice, to avoid the risk of unfairness and because the prosecutor does not have the time or the resources to edit out every item which need not be disclosed, disclosure under the modern rules tends to provide the defence with more material than is strictly necessary.

    But the administration of justice is not all about fairness to the defendant. It is also about the interests of those individuals who may be affected by dissemination of the material. There is a public interest also, in the detection and punishment of crime. If that interest is put at risk because of the consequences of the disclosure rules, the balance between the public interest and the interests of the individual is disturbed. It needs to be adjusted in favour of the public interest. This cannot be done by reducing the scope of the disclosure rules. That would prejudice the right of the defendant to a fair trial, which is always paramount. What can be done is to increase the protection to those who may be affected by the disclosure rules against the collateral use of such material--that is to say, against its use for purposes other than to ensure that the defendant has a fair trial.

    I consider that Mr. Caldecott Q.C. for the respondents took your Lordships to the heart of the matter when he submitted that the public interest required that all those involved in a criminal investigation should be able to communicate freely without being inhibited by the threat of proceedings for defamation such as those which have been brought in the present case. Those who give or may give evidence at the trial are protected by the traditional witness immunity when they are in the course of preparing their evidence. But the traditional protection has until now been applied only to persons who fall within that category. Yet the typical criminal investigation involves many other people who are not witnesses or potential witnesses. They include those who simply provide information to the investigators. The information which they give may be useful as background but not worth investigating further for use at the trial. It may not even be admissible as evidence. But it may nevertheless be worth putting on record, perhaps to close one line of inquiry or to open up one which has not yet been investigated. As soon as it has been recorded, perhaps in a file note to ensure that it is not lost sight of should further reference to it become necessary, it is at risk now of being disclosed to the defence. Then there are the investigators themselves and the prosecuting officials with whom they are required to communicate. They are likely to be members of a team, perhaps working from various offices. The memberships of the team may change from time to time. The efficiency of the investigation may be dependent upon the completeness and accuracy of the information which has been committed to paper by the investigators. Yet anything which is committed to paper, whether by the official or the investigator, is now at risk of being disclosed under the disclosure rules.

    The risk to the administration of justice lies in the inhibiting effect of collateral use of this material. A criminal investigation may travel in various directions before it settles down and concentrates on the activities of those against whom the prosector believes there is sufficient evidence. Those who provide information to investigators usually do so in the belief, which may or may not be expressed by them, that the information is being given out of a sense of public duty and in confidence. That information may, if it is to be useful to the investigator, contain material which is defamatory. So long as the information goes no further, no harm is done to anybody. But disclosure releases the defamatory material from the control of the prosecutor. Unless protected, it may be disseminated further and become actionable.

    It requires little imagination to appreciate the damaging effects on the supply of information if those who supply it are to be subjected to claims for damages for defamation arising from what they have said. The process of investigation is likely to be inhibited if the investigator is at risk of such a claim because of something which he has recorded for his own use, or for use by others in his team, in a file note. As Lord Keith of Kinkel remarked in Hill v. Chief Constable of West Yorkshire [1989] A.C. 53, 63D, in a different but analogous context, the imposition of liability in such circumstances may lead to the exercise of the investigatory function being carried on in a detrimentally defensive frame of mind. This may prejudice the defendant, because other possible lines of inquiry which might assist his defence will not appear anywhere in writing lest they should be thought, following disclosure, to be defamatory. I do not think that it is possible to overstate the importance, in the public interest, of ensuring that material which is disclosed in criminal proceedings is not used for collateral purposes.

    Under the existing rules all those who participate in a criminal investigation in good faith are entitled to claim the protection of qualified privilege. But that is an imperfect protection, because qualified privilege requires to be pleaded and established as a defence. No action can be struck out on the ground of qualified privilege. The requirement therefore is to extend to informants, investigators and prosecutors whose statements are revealed by the operation of the disclosure rules the benefit of the absolute privilege in respect of the statements made which is already accorded to witnesses and potential witnesses. And it is necessary to extend to them the same absolute immunity against actions for conspiracy or for negligence based upon disclosed material as has already been recognised in the case of the police: see Marrinan v. Vibart [1963] 1 Q.B. 529; Hill v. Chief Constable of West Yorkshire [1989] A.C. 53. Such material may however still be actionable on other grounds where malice and lack of reasonable and probable cause can be established. Just as proceedings for perjury are available to deal with the witness who would otherwise be protected against statements made in the witness box, so also the public interest requires that a remedy for malicious prosecution should remain available against those who would be entitled to the benefit of the absolute privilege but who have acted maliciously and without reasonable and probable cause during the investigation process. But that is a quite separate matter as it is the malicious abuse of process, not the making of the statement, which provides the cause of action. The public policy argument for extending the absolute privilege, consistently with established principles, seems to me to be unanswerable.

    I see the two solutions as complementary to each other. If the absolute privilege and the consequent immunity are to be kept within the limits which are necessary for the administration of justice, they must be accompanied by a rule which restricts the use and dissemination of disclosed material. The purpose of the immunity is to ensure the integrity of the investigation process. The disclosure should extend no wider than is necessary to serve the public interest in the administration of justice. It should not be accompanied by risks to the good name of those who are not on trial from whom the protection of defamation proceedings has been removed by the immunity. So a restriction on the release and collateral use of the disclosed material by means of the implied undertaking can be seen as a necessary balance against the possible harm which might flow from the absolute nature of the immunity.

    For these reasons as well as those given in the speech of my noble and learned friend, Lord Hoffman, which I have had the benefit of seeing in draft and with which I agree, I would dismiss the appeal.


My Lords,

    I have had the advantage of reading in draft the speeches of my noble and learned friends Lord Hoffmann and Lord Hope of Craighead, with which I am in agreement, and will only add a few observations of my own in relation to the principle of immunity from suit. Under this principle it is settled that no action can be brought against the judge, counsel, witnesses, jurors and parties for words spoken or written in the course of a trial, and this immunity is absolute and cannot be defeated by proof of malice. In Munster v. Lamb (1883) 11 Q.B.D. 588, 604 Brett M.R. stated:

     "The rule of law is that what is said in the course of the administration of the law, is privileged; and the reason of that rule covers a counsel even more than a judge or a witness. To my mind it is illogical to argue that the protection of privilege ought not to exist for a counsel, who deliberately and maliciously slanders another person. The reason of the rule is, that a counsel, who is not malicious and who is acting bona fide, may not be in danger of having actions brought against him. If the rule of law were otherwise, the most innocent of counsel might be unrighteously harassed with suits, and therefore it is better to make the rule of law so large that an innocent counsel shall never be troubled, although by making it so large counsel are included who have been guilty of malice and misconduct."

    The immunity was extended by this House in Watson v. M'Ewan [1905] A.C. 480 to statements made by a witness to a party and his solicitor in preparing for a trial, the Earl of Halsbury L.C. stating at p. 487:

     "It is very obvious that the public policy which renders the protection of witnesses necessary for the administration of justice must as a necessary consequence involve that which is a step towards and is part of the administration of justice--namely, the preliminary examination of witnesses to find out what they can prove. It may be that to some extent it seems to impose a hardship, but after all the hardship is not to be compared with that which would arise if it were impossible to administer justice, because people would be afraid to give their testimony."

    In recent years the procedure has developed whereby very full disclosure is given to the defendant in a criminal case, so that he will become aware, and others may become aware, of what has been said by investigators and those who speak to them in the course of the investigation which preceded the prosecution. Therefore, just as the preliminary examination of a witness by a party's solicitor out of court is a step towards the administration of justice which requires to be protected, I consider that the investigation of a suspected crime is a step towards the administration of justice so that the protection of absolute privilege should be given to those who, in the course of their public duty in investigating a suspected crime, speak or write to persons who may be able to provide relevant information, and to such persons in respect of what they say or write to the investigators, and to the giving of information by investigators to their colleagues who are also concerned with the investigation. If this protection were not given police officers and investigators, such as officers of the Serious Fraud Office, who had conducted investigations into suspected crimes and persons who gave information to them "might be unrighteously harassed with suits" and, as Fry L.J. stated in Munster v. Lamb at p. 607, there would be the risk that "numerous actions would be brought against persons who were merely discharging their duty."

    In my opinion the argument should not prevail that the defence of qualified privilege would give adequate protection to investigators and those who spoke to them because I consider that there would be a real risk that an unfounded allegation of malice made by a plaintiff bringing an action for defamation would subject an investigator or informant to harassment to which he should not be subjected.

    I am in agreement with the statement of Drake J. in Evans v. London Hospital [1981] 1 W.L.R. 184, 192C in respect of witnesses and possible witnesses that:

     ". . . the protection exists only where the statement or conduct is such that it can fairly be said to be part of the process of investigating a crime or a possible crime with a view to a prosecution or possible prosecution in respect of the matter being investigated."

    I would also apply this requirement to an investigator or a person who gives him information so that the protection will not apply to a gratuitous defamatory remark made by an investigator to a third party or by a third party to an investigator.

    In D. v. National Society for the Prevention of Cruelty to Children [1978] A.C. 171 this House held that a similar immunity from disclosure of their identity should be given to those who gave information about neglect or ill treatment of children to a local authority or the N.S.P.C.C to that which the law allowed to police informers. In rejecting an argument that such an immunity could give protection to a malicious informant Lord Simon of Glaisdale said at p. 233B:

     "I cannot leave this particular class of relevant evidence withheld from the court without noting, in view of an argument for the respondent, that the rule can operate to the advantage of the untruthful or malicious or revengeful or self-interested or even demented police informant as much as of one who brings information from a high-minded sense of civic duty. Experience seems to have shown that though the resulting immunity from disclosure can be abused the balance of public advantage lies in generally respecting it."

    In this case, whilst the immunity may on occasions benefit a malicious investigator, I consider that the balance of public advantage lies in allowing it to the defendants.

I would dismiss the appeal.


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