In May this year, the Supreme Court handed down a landmark decision on the powers of the Competition and Consumer Protection Commission (CCPC) during dawn raids.
The decision relates to the conduct of a dawn raid by the CCPC in May 2015 at Irish Cement Limited (Irish Cement), a subsidiary of CRH plc (CRH). The Supreme Court was critical of the way in which the CCPC had exercised its powers during and after the dawn raid and clarified that the CCPC must respect the right to privacy under the European Convention of Human Rights (ECHR). Specifically, the CCPC is not permitted to review documents which are not related to the investigation and must exercise its dawn raid powers proportionately.
The decision is likely to have a significant impact on the manner in which the CCPC conducts dawn raids in the future, particularly the type of documents which the CCPC will be able to review and the process for doing so.
Details of the case
The CCPC conducted the dawn raid at Irish Cement’s premises as part of an investigation into alleged anti-competitive activity in the bagged cement sector in Ireland.
The CCPC obtained a warrant drafted in broad and unspecified terms to conduct the raid and to obtain evidence relating to alleged anti-competitive practices. The CCPC seized a large number of documents (96 gigabytes of data or 380,000 files) during the raid, including a copy of the entire CRH email account of Seamus Lynch. Mr Lynch was a senior executive at CRH and had previously been a managing director of CRH. The documents included both legally privileged material and material relating to other business entities within the CRH group.
The Competition and Consumer Protection Act 2014 (Act) lays down specific rules on how to determine whether material is legally privileged but does not lay down rules for dealing with irrelevant materials seized during a dawn raid. Irish Cement’s lawyers suggested that, similarly to the process for legally privileged material set out in Section 33 of the Act, all seized material should be reviewed by an independent third party to determine whether it was relevant to the investigation (and could therefore be reviewed by the CCPC) or not. However, the CCPC believed it had the right to review all material seized during the dawn raid (with the exception of legally privileged documents).
CRH, Irish Cement and Mr Lynch (Plaintiffs) issued High Court proceedings seeking an injunction to restrain CCPC from assessing, reviewing or making use of the materials obtained in the course of the search which are unrelated to the investigation. The High Court agreed with the Plaintiffs that the CCPC had acted unlawfully in seizing documents unrelated to the investigation and stated that a review of these irrelevant materials would amount to a breach of the Plaintiffs’ right to privacy under Article 40.3 of the Irish Constitution and Article 8 of the ECHR. The CCPC appealed the decision to the Supreme Court.
Supreme Court decision
All five judges assigned to the case dismissed the CCPC’s appeal. The judgments clearly state that the CCPC must use the wide search and seizure powers under Section 37 of the Act proportionately and that a review of irrelevant materials would amount to a breach of the Plaintiffs’ right to privacy.
Specifically, Judge Laffoy held that the CCPC would act in breach of the Plaintiffs’ right to privacy under Article 8 of the ECHR if it accessed, reviewed or made use of the electronic documents within Mr Lynch’s email account which are unrelated to the investigation. She highlighted the gap in the Act resulting from the absence of a mechanism to identify and separate digital material unrelated to the investigation and stated that it is for the legislature to fill that gap. Judge Laffoy also noted that, until specific legislation is introduced, there was nothing to prevent an undertaking or an individual whose digital material has been seized to reach an agreement with the CCPC on an appropriate mechanism to resolve the difficulty, for example a key word search process, rendering out of scope material invisible or the appointment of an independent lawyer to determine the relevance of the material. She highlighted that it is for the CCCPC, and not the court, to take the steps necessary to resolve its difficulty.
Judge Charleton referred to the large amount of material seized by the CCPC when it seized the entire email account of Mr Lynch. He suggested a process for determining the relevance of the seized material, namely: (a) identification of private material by the Plaintiffs; (b) discussion as to word searches and an appropriate analysis to identify relevant material between the CCPC and the Plaintiffs (however, he noted that the CCPC has the final say); (c) attendance of a representative of Mr Lynch at the initial search of the material (i.e. scoping what is relevant by word search); (d) the CCPC should endeavour to protect the privacy of Mr Lynch but may investigate crime in a proportionate way (which he noted the suggested steps ought to fulfil); (e) review of meta data of the emails to determine whether material is relevant; (f) destruction of material which is private and not relevant to the investigation at the end of the process; and (g) consideration by the CCPC of a code of practice for future cases.
What does the decision mean for future dawn raids?
The decision clearly shows that the CCPC’s power of search and seizure are not unlimited and that it must exercise its powers proportionately. It is expected that the decision will lead to substantial changes in the way the CCPC conducts dawn raids.
Amending legislation may fill the gap in the Act identified by the Supreme Court judgment. In the meantime, it is likely that the CCPC will introduce a code of conduct for dawn raids which will include a procedure for identifying irrelevant material seized during a dawn raid. This will have to take account of the Supreme Court’s decision, particularly the requirement to exercise powers of search and seizure proportionately, the need to engage with parties that are the subject of a dawn raid and the protection of their right to privacy.
The decision may also have an impact on how warrants or authorisations for dawn raids are drafted, for example by including information on the subject matter and the scope of the investigation to enable the parties to assess whether material seized is relevant to the investigation.