On 29 May 2017, the Supreme Court handed down judgments in relation to the search and seizure powers of the Competition and Consumer Protection Commission ("CCPC"). The judgments concern an appeal by the CCPC of a High Court decision in favour of CRH plc ("CRH") and others arising from a dawn raid in May 2015 at the premises of CRH's subsidiary, Irish Cement Limited ("ICL"). All five judges of the Supreme Court hearing the case dismissed the CCPC's appeal.
The decision is likely to have profound implications for the manner in which future dawn raids are conducted by the CCPC. In particular, it is clear that the CCPC must respect the right to privacy under Article 8 of the European Convention of Human Rights ("ECHR") by exercising its powers of search and seizure in a proportionate manner. In practical terms, this means that it is not entitled to access, review or make use of documents that are unrelated to its investigation and, as appropriate, it must engage with the parties concerned to identify those documents in a manner that respects the parties' right to privacy.
On 14 May 2015 the CCPC conducted a dawn raid at ICL's headquarters as part of an investigation into the bagged cement sector in Ireland. The raid was conducted on foot of a search warrant issued under Section 37 of the Competition and Consumer Protection Act 2014 (the "2014 Act").
During the raid, the CCPC seized, amongst other material, an electronic copy of the `crh.com' email account of Mr Seamus Lynch. Mr Lynch, who was previously a managing director of ICL, was a senior executive at the parent company, CRH, at the time of the dawn raid. It was contended by CRH, ICL and Mr Lynch (the "Plaintiffs") that as a result a large proportion of the emails seized were irrelevant to the CCPC's investigation into bagged cement in Ireland and therefore outside the scope of the CCPC's search warrant.
While the 2014 Act lays down a framework for dealing with legally privileged material that is seized during a dawn raid, it does not provide for a framework for dealing with irrelevant material that is seized. Following the dawn raid at ICL, the Plaintiffs' lawyers, Arthur Cox, and the CCPC agreed a procedure for identifying and dealing with any disagreement concerning legally privileged material that had been seized at ICL. The Plaintiffs' lawyers proposed an analogous procedure for identifying and dealing with any disagreement concerning irrelevant material within Mr Lynch's `crh.com' email account. The CCPC refused to engage on any procedure for this purpose, asserting that it had the right to review all of the material seized during the dawn raid (aside from legally privileged material) and that it would review all of the material. It would not involve ICL in this review and did not offer any safeguards concerning irrelevant material other than a reference to its obligation of confidentiality under section 25 of the 2014 Act. That obligation is subject to exceptions, including for disclosures in the performance of functions under the 2014 Act, and was referred to by the High Court in its judgment in this case as "the leakiest of sieves".
HIGH COURT DECISION
In November 2015, the Plaintiffs issued High Court proceedings seeking, amongst other reliefs, declarations that the CCPC had acted unlawfully and an injunction restraining the CCPC from accessing, reviewing or making use of the irrelevant material contained within Mr Lynch's `crh.com' email account. On 26 April 2016, the High Court found in favour of the Plaintiffs, declaring that the CCPC had acted unlawfully in seizing documents within Mr Lynch's email account that were unrelated to the supply of bagged cement in Ireland and declaring that, were it to access, review or make use of those documents, this would involve a breach of the Plaintiffs' right to privacy under Article 40.3 of the Irish Constitution and a contravention of Article 8 of the ECHR. The High Court granted an injunction restraining the CCPC from reviewing those documents.
SUPREME COURT DECISION
The CCPC appealed the High Court decision to the Supreme Court. All five judges of the Supreme Court unanimously dismissed the CCPC's appeal. Judgments were handed down by Judges Laffoy, Charleton and MacMenamin. A majority of the Court agreed with the judgments of Judges Laffoy and Charleton.
Judge Laffoy's judgment focused on the issue of whether the CCPC had acted in breach of the Plaintiffs' right to privacy under Article 8 of the ECHR. She found that, in light of the CCPC's refusal to engage with the Plaintiffs on a procedure to identify the unrelated material that was outside the scope of the search warrant and its position that it was entitled to seize all of the material and that it intended to do so, instituting proceedings before the High Court was the only practical and effective recourse open to the Plaintiffs. If an injunction had not been granted by the High Court, the Plaintiffs would have been "utterly devoid of any remedy to effectively enforce their rights under Article 8 ECHR".
Judge Laffoy agreed with the High Court judgment that there is a gap in the legislation arising from the absence of a mechanism to identify and separate digital material unrelated to the investigation which may be mixed with digital material which the CCPC is entitled to seize under its powers. It is for the Oireachtas (the Irish parliament) to fill that gap. However, she did not see a reason why, in a particular case, an undertaking or an individual whose digital material has been seized and is to be searched could not reach an agreement with the CCPC on an appropriate mechanism to resolve the difficulty. Judge Laffoy agreed with the High Court that the procedure for identifying the non-relevant data that had been proposed by the Plaintiffs' lawyers in this case was a "reasonable and workable procedure".
Judge Laffoy concluded that were the CCPC to access, review or make use of the electronic documents within Mr Lynch's `crh.com' email account that are unrelated to its investigation, this would involve a contravention of Article 8 of the ECHR.
In dismissing the CCPC's appeal, a principal issue for Judge Charleton was the "extraordinary scope" of material seized by the CCPC, i.e. the seizure of an entire email account of many thousands of communications without justification for such an ample and undifferentiated seizure. He held that there was no reason for the CCPC to hold onto irrelevant material. Once potentially relevant material had been identified in a proportionate way, arrangements could be made by the CCPC to destroy the material irrelevant to the investigation.
Judge MacMenamin's judgment is highly critical of the dawn raid procedures adopted by the CCPC in this case, including the lack of information provided to the Plaintiffs as to the subject matter and scope of the investigation both in the search warrant itself and by the CCPC both during and after the raid. Judge MacMenamin found that the CCPC was not entitled to engage in this form of entry, search and seizure and retention where it was highly probably that such amounts of irrelevant or extraneous material would be seized. He held that the procedures adopted rendered the search, and its fruits, null and void. Judge MacMenamin held that the search was void from the outset and in the course of its execution and concluded that the search warrant and all that followed it was outside the scope of the CCPC's powers under the 2014 Act.
In dismissing the CCPC's appeal, the Supreme Court ordered that the CCPC be restrained from accessing, reviewing or making any use whatsoever of the unrelated electronic documents seized from Mr Lynch's 'crh.com' email account other than in accordance with agreement with the Plaintiffs which accords with the requirements of Article 8 of the ECHR.
The Supreme Court's judgments will clearly have significant and lasting implications for the CCPC's dawn raid procedures. During the course of the Supreme Court hearing, the CCPC informed the Court that it was working on a protocol for the future conduct of dawn raids. Any protocol will have to take account of the Supreme Court's findings regarding the requirement to exercise powers of search and seizure proportionately and the need to engage with parties that are the subject of a dawn raid in a manner which respects their right to privacy under Article 8 of the ECHR. As noted above, in practical terms, this means that the CCPC is not entitled to access, review or make use of documents that are unrelated to its investigation and, as appropriate, it must engage with the parties concerned to identify those documents in a manner that respects the parties' right to privacy.
These principles are also likely to apply to the exercise of similar powers of search and seizure by other regulators in Ireland.
The judgments also have implications for how the CCPC, and potentially other regulators, approach dawn raid preparation. In particular, search warrants or authorisations that do not contain sufficient information on the subject matter and scope of the investigation for the parties concerned to be able to determine their rights would appear to be open to challenge.
Both the High Court and the Supreme Court identified a gap in the 2014 Act in relation to how to identify and separate digital material that is unrelated to an investigation from digital material which the CCPC is entitled to seize under its powers. In light of these observations, the Oireachtas may legislate to address this gap. However, such legislative change may not happen in the short term and, in the meantime, it is for the CCPC and the parties involved in a dawn raid to try to agree a procedure that achieves this aim in a manner that respects the parties' right to privacy under Article 8 of the ECHR.
Richard Ryan, Florence Loric, Andy Lenny and Patrick Horan of Arthur Cox acted for CRH, ICL and Seamus Lynch in this case.