In two related hearings concerning the much publicised claim by Robert Tchenguiz (“RT”) against the Serious Fraud Office (“SFO”), RT applied to the court for permission under CPR 31.22:

  1. to instruct a separate legal review team to identify documents disclosed in these proceedings by the SFO (“Documents”), that may be relevant to separate appeal proceedings in Guernsey in which RT had an interest (“Guernsey Appeal”); 
  2. to provide 22 of the Documents to (a) Guernsey legal advisers involved in the Guernsey Appeal for RT and other parties; and (b) RT’s Criminal legal advisers to advise on whether criminal offences may have been committed by others; and
  3. to allow the Guernsey legal advisers to seek to have the 22 Documents admitted as evidence in the Guernsey Appeal.

The court granted the applications under (i) and (ii) above, but (iii) was refused on the basis that the public interest in protecting confidentiality and those cooperating in criminal investigations outweighed the private interests of RT or the public interest of discovering the truth in the Guernsey Appeal.

Background facts

In the course of the present proceedings the SFO had disclosed the Documents (about 45,000 documents), obtained as part of its original criminal investigation into RT’s affairs.  Documents disclosed in proceedings are subject to a prohibition against collateral use under CPR 31.22.  The rule requires a party wishing to use such documents for another purpose either to obtain the court’s permission or the consent of the disclosing party to proceed.  (A disclosed document may also be released for collateral use if it has been read to or by the court at a public hearing, although the court has a power to overrule this exception.)

RT was not a party to the Guernsey Appeal (although he had a beneficial interest in certain parties thereto), but the court in the English proceedings accepted that the outcome of the Guernsey Appeal would have a substantial effect on RT’s rights.  With the objective of intervening in the Guernsey Appeal, RT proposed that a review team carry out a selective review of the Documents for potential relevance to those proceedings.

In a second application, RT sought permission to use in relation to the Guernsey Appeal 22 of the Documents already identified as being relevant and potentially capable of satisfying the test in Ladd v Marshall [1954] EWCA Civ 1, for the admission of new evidence (which the Guernsey Appeal court would have to consider in those proceedings in due course if permission were granted to allow their use in those proceedings).

Judgment

Eder J noted that to succeed in the application to use the Documents for a collateral purpose, the applicant must show “cogent and persuasive reasons” why the Documents should be released from the prohibition on collateral use amounting to “special circumstances”; he commented that the bar was high.

While the first application was accepted to be the likely precursor to further satellite litigation once the proposed review had been carried out (assuming further relevant material was identified as a result), permission was granted, subject to suitable confidentiality agreements being entered into by the review team and on condition that the course of action would not cause the SFO to incur significant costs.  However, Eder J noted obiter that he saw ‘considerable force’ in the argument that this particular application – i.e. to allow the review team to consider whether the Documents could be useful in the Guernsey Appeal and advise RT on that issue and on whether, in these proceedings, to make a further application to allow their use in respect of the Guernsey Appeal – was not one that needed to be made under CPR 31.22; the review by the review team for that purpose may not amount to collateral use at all.  In other words, the first application may not have been required in any event – the review would be conducted within the proceedings for which the Documents were disclosed in order to see whether an application should be made in those same proceedings to allow the Documents’ use for another purpose. 

However, as the application had been made on that footing – and contested vigorously on the same basis – it was determined on the assumption that CPR 31.22 was applicable.  (The reasons why RT decided to make that application and take such a cautious approach are not recorded in the judgment, but it may have been the result of previous skirmishes between the parties and a desire to avoid any potential criticism from the SFO in that regard.)

To the extent the collateral use would require the respondent to consult with third parties, incurring cost and distracting it from the present proceedings, Eder J indicated that either the SFO should have permission to apply to set aside or vary the order granting permission, or to order the applicant to pay its reasonable costs. 

The second application for permission to give the 22 Documents to certain legal advisers was also successful.  Similarly to the first application, providing documents to Guernsey Counsel and legal advisers, with the objective of obtaining legal advice, did not necessarily amount to collateral use, and preventing a party from obtaining legal advice, would have been a draconian step.

However, the application to allow the Guernsey lawyers to seek the Guernsey Court’s permission to admit the 22 Documents as evidence in the Guernsey Appeal was refused.  Eder J accepted that in applying to lift the prohibition on collateral use, both RT’s private interest, and the ‘very strong public interest in discovering the truth’ in the Guernsey Appeal were in favour of granting permission.  He then focused on the likely probative value of the 22 Documents in the Guernsey Appeal, noting that if those documents were deemed ‘crucial’ or ‘decisive’ in relation to the Guernsey Appeal, the case would be stronger (although not guaranteed) to permit collateral use.  He did not accept that this was a question that should be left to the Guernsey Court to consider.  Evidence from RT and RT’s Counsel, Lord Goldsmith QC, was considered on the value of the evidence in the context of the Guernsey Appeal.  On the basis of this evidence, which suggested the Documents may (as opposed to would) have led to a different result if produced earlier in the Guernsey proceedings, it was held that the Documents’ probative value fell short of being ‘crucial’ or ‘decisive’.

Eder J relied on the fact that the 22 Documents related to a criminal investigation carried out by the SFO, containing information as to the methodology employed by the SFO and the interaction between the SFO and the Guernsey authorities in relation to mutual legal assistance requests.  He held that there was a very strong public interest in not permitting the use of those Documents for the collateral purpose sought and that that interest had not been displaced or outweighed on the specific facts of this case.

Comment

This case highlights how difficult it is to succeed in a contested application under CPR 31.22 to use documents disclosed in proceedings for another purpose.  It is necessary to show special circumstances, supported by cogent and persuasive reasons.  There may often be conflicting public interests, as in this case.  Perhaps unsurprisingly, the public interest in keeping the investigators’ methods and interactions confidential, as well as ensuring the privacy and confidentiality of those referred to in documents that exist as a result of a criminal investigation, have been shown to be very strong and difficult to oust.  Eder J referred to documents requiring ‘crucial’ or ‘decisive’ probative value in the context of the other proceedings to stand a chance of displacing this public interest and he was not satisfied that the cautious evidence on the impact of the relevant documents demonstrated they were sufficiently ‘decisive’.  Perhaps more unequivocal evidence to support the decisive nature of the material in the context of the other proceedings would have led to a different result. 

On a separate issue, where a party is seeking to use disclosed documents for the limited purpose of considering whether they could be useful for some other purpose (and so to consider whether an application to use them for that other purpose may be warranted), that party may wish to consider whether such an application is really required at all or, alternatively, applying for a declaration that the exercise falls outside collateral use as envisaged by CPR 31.22.

To read the judgments, please click here Tchenguiz and others v The Serious Fraud Office [2014] EWHC 2597 (Comm) (28 July 2014), and here Tchenguiz and others v Director of the Serious Fraud Office [2014] EWHC 2379 (Comm) (16 July 2014).