The ENRC Ruling – Is it all good news?

Monday, 10 September 2018 | David Janes

An alternative defence perspective 

The ENRC Court of Appeal Judgement clarifying the extent of litigation privilege has already received much praise and plaudits in particular from defence practitioners.

The unequivocal ruling that the internal investigation commissioned by Decherts into the SFO allegations was covered by litigation privilege and therefore not disclosable to the SFO appears to have been universally welcomed, especially by corporate white collar defence firms and city lawyers.

This welcome is easy to comprehend.   It provides the green light for corporates to instigate internal investigations into alleged wrongdoings by the SFO or other agencies, in the knowledge that the reports and constituent documentation (such as individual interview responses/statements) remain confidential and under the sole control of the corporate unless they choose to waive privilege.

It is therefore a win-win situation for the corporate and derivatively for their lawyer – normally, if not exclusively, a magic circle City firm.

It therefore bodes well for the corporate defendant and I fully understand the eulogies for the ruling.

I agree the ruling is jurisprudentially fine and helpful in many ways

However spare a thought for the individual defendant – not on the receiving end of a DPA – but a criminal prosecution for fraud or bribery at Southwark Crown Court.

The Prosecution normally takes place a decade or more after the alleged offence, and in my experience, more often than not after the retirement of the defendant.

The events are therefore long ago and hard to recollect – but any argument or submission in this respect is met by the response that ‘this is a documents case’.

However, thanks to this ruling perhaps the most invaluable documents to the retired executive facing the trial of a lifetime, may no longer be accessible.

The statements/interviews from the internal investigations are normally taken many years before any ultimate prosecution of the executive. The investigation statements are therefore taken when the matter is much fresher in the mind of the deponent and is probably far more reliable.

However helpful these statements may be to a potential defendant, they simply will not now be available unless privilege is waived.

They may be inconsistent and even contradictory to the evidence being provided in the prosecution witness statements, but this may never been known to the defendant.

When privilege is invoked there is no safeguard e.g. the Derby Justices case when a potentially helpful proof of evidence could not be availed.

In Janes’ preparation of SFO defences, inconsistencies in the internal investigation or positive evidence emanating from an investigation, has played a pivotal role.  It will be troubling if this is no longer available.

The importance of disclosure has recently been publicised, primarily in respect of sexual offences, but it is of equal of importance to all aspects of defence work and preparation.

The Divisional Court recently consider the failure of the SFO to obtain documents (for onward disclosure to the defence) in R (on the application of AL) v Serious Fraud Office [2018] EWHC 856 (Admin).

This was of course decided before the Court of Appeal decision in ENRC and the Court criticised the SFO for not obtaining the documentation under what would now appear to be the mistaken interpretation of the law that it would be disclosable.  The disadvantage to the individual defendant in not receiving the documentation was made plain and remedies were suggested by the Court to be taken within the Crown Court jurisdiction.  This would now seem to be of no avail if, as would appear to be the case, there is no answer to the claim of privilege.

It is therefore submitted that there is a huge downside to the ENRC decision which does not appear to have been considered and which it is submitted urgently needs to be addressed.

If the case is to go to the Supreme Court this is a matter which should be addressed and it is respectfully submitted a mechanism should be adopted to avoid injustice to the individual defendant at the receiving end of the claim of privilege, who may be denied disclosure.

It may be that without access to such disclosures the defendant is unable to have a fair trial – but this would not instantly be known either to the defendant or the Court and it is submitted that a new procedure would be required with the assistance of Special Counsel.

David Janes is the Senior Partner at Janes Solicitors

10thSeptember 2018

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