The Divisional Court has confirmed that the procedure adopted by the SFO for dealing with material potentially subject to legal professional privilege (LPP), which has been either seized or produced in response to a notice, is lawful and that it is not necessary for investigating authorities to use external independent lawyers or IT technicians to carry out searches to isolate material potentially subject to LPP. 

The decision was made pursuant to an application for permission to apply for judicial review by Mr McKenzie, who was arrested in June 2015 on suspicion of conspiracy to commit an offence contrary to section 1 of the Bribery Act 2010. At the time of arrest, and subsequently pursuant to a notice served under section 2(3) of the Criminal Justice Act 1987, a number of electronics devices had been seized by, or produced to, the SFO. 

At the time of possession by the SFO, there was no suggestion that the devices may contain material subject to LPP but the SFO later notified Mr McKenzie that it believed one of the devices, a gold iPhone, may contain some LPP material. The SFO quarantined the iPhone's content and asked Mr McKenzie's solicitors to provide a list of search terms to enable its in­house IT team to run searches to identify potential LPP material for review by independent counsel. Mr McKenzie’s solicitors, in response, asserted that there was LPP material on all of the devices and they refused to provide any search terms on the basis that the SFO's procedure was unlawful. 

Mr McKenzie argued that the use of SFO in­house IT staff to isolate material potentially subject to LPP was inconsistent with the terms of the Attorney General's Supplementary Guidelines on Digitally Stored Material (2011) (AG's Guidelines) and that this approach gave rise to a risk that the SFO's investigative team would gain access to LPP material. Mr McKenzie referred to decisions in Prince Jefri Bolkiah v KPMG [1999] 2 AC 222 and R (Rawlinson and Hunter Trustees) v Central Criminal Court [2012] EWHC 2254 (Admin) in support of his argument that the involvement of in­house IT staff was necessarily unlawful. 

Judgment 

Burnett LJ, with whom Irwin J agreed, rejected each of Mr McKenzie's arguments in their entirety, ruling that: 

  • The procedures set out in the SFO Handbook are not inconsistent with the AG's Guidelines and, in any event, "they [AG's Guidelines] do not amount to a policy which the SFO is obliged to follow."
  • The duty applicable to a seizing authority is limited to devising and operating a system to isolate potential LPP material, which "can reasonably be expected to ensure that such material will not be read by members of the investigative team before it has been reviewed by an independent lawyer to establish whether privilege exists." 
  • Unlike a case involving a solicitor who proposes to act against a former client (Bolkiah), it is too onerous to require an investigating authority in the context of the exercise of statutory powers to demonstrate that there would be no real risk of LPP material being read by anyone involved in the investigation. 

Burnett LJ also disagreed that Rawlinson and Hunter Trustees provided any support to the proposition advanced by Mr McKenzie.

Takeaway point 

The decision is being hailed by the SFO as a landmark win and you can understand why, as Burnett LJ did give a very firm stamp of approval on the SFO's procedure. More importantly, perhaps, is the potential impact that this decision may have on other investigating and enforcement authorities as it presents a useful yardstick against which procedures adopted by other authorities for dealing with material potentially subject to LPP can now be measured. (See Legal update, The SFO's policy on LPP claims and digital material deemed lawful ( www.practicallaw.com/7­622­3289) .)