Bowman v Fels (Bar Council and Others intervening)
| Jurisdiction | England & Wales |
| Judge | Lord Justice Brooke |
| Judgment Date | 08 March 2005 |
| Neutral Citation | [2005] EWCA Civ 226 |
| Docket Number | Case No: 2004/0770 |
| Court | Court of Appeal (Civil Division) |
Lord Justice Brooke
Vice-President of the Court of Appeal (Civil Division)
Lord Justice Mance and
Lord Justice Dyson
Case No: 2004/0770
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CENTRAL LONDON COUNTY COURT
Judge Cowell
Royal Courts of Justice
Strand, London, WC2A 2LL
Milan Dulovic (instructed by Levine Mellins Klarfeld) for the Appellant
James Copley (instructed by Male & Wagland) for the Respondent
Anthony Boswood QC, Roger Masefield and Jonathan Ashley Norman (instructed by the Bar Council pro bono unit) for the Bar Council intervening
Nicholas Elliott QC and Danny Friedman ( instructed by the Law Society) for the Law Society intervening
David Pannick QC and Marcus Thompson ( instructed by NCIS) for the National Criminal Intelligence Service intervening
INDEX
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|
| Para |
| The litigation in the county court | 2 | |
| The jurisdiction of this court to hear the appeal | 6 | |
| The issue at the centre of the appeal | 19 | |
| The 1991 Directive | 26 | |
| How the 1991 Directive was translated into English law | 31 | |
| The 2001 Directive | 41 | |
| 44 | ||
| The respects in which the 2002 Act goes further than the directives | 47 | |
| The central issue on this appeal | 52 | |
| The central issue: linguistic considerations | 64 | |
| The central issue: policy considerations | 70 | |
| Our conclusion on the central issue | 83 | |
| The narrower issue | 85 | |
| Other arguments | 92 | |
| Consensual resolution in a litigious context | 99 | |
| " POCA" clauses | 103 | |
| Our conclusion on the facts of the present case | 106 |
This is the judgment of the court, to which each of its members has made a substantial contribution.
This appeal by the claimant was brought on 7 th April 2004, pursuant to permission granted by Judge Cowell, against an order he made in the Central London County Court on 25 th March 2004 whereby he discharged an order made by Judge Crawford Lindsay QC two days earlier. Judge Crawford Lindsay, for his part, had vacated the trial date of 25–26 th March and directed that the action be re-listed for trial with a new trial window of 5 th July-15 th October. The appeal raises important issues relating to the ambit of the Proceeds of Crime Act 2002 ("the 2002 Act") and its application to the legal profession. Because of its importance the Bar Council, the Law Society and the National Criminal Intelligence Service ("NCIS") were all granted permission to intervene in the appeal.
Part 1 The litigation in the county court
The underlying facts are relatively straightforward. The claimant lived with the defendant for ten years between May 1993 and April 2003 in a house which was registered in the defendant's sole name. After their relationship ended she asserted a right to a beneficial interest in the property arising out of a constructive trust. Her case was that before the house was purchased the defendant had expressly agreed with her that they would buy the property jointly. He resisted her claim, these proceedings were started, and the action was in due course set down for a two-day trial starting on 25 th March 2004.
It appears that the claimant's witness statement was filed eight weeks late on 23 rd December 2003. On 12 th February 2004 the defendant served a consequential second list of documents. On 3 rd March the claimant's solicitors requested inspection of the documents on that list, and on 15 th March copies were duly delivered. On 22 nd March the defendant's solicitors inquired about the whereabouts of the trial bundle. The claimant's solicitors replied that they were getting on with it. On the same day they notified NCIS, pursuant to their understanding of the effect of certain provisions of the 2002 Act, of their suspicion that the defendant had included the cost of the work he had carried out at the property within his business accounts and his VAT returns, even though these works were unconnected with his business.
The claimant's solicitors believed that section 328 of the 2002 Act obliged them to make this disclosure and that it also prevented them from telling either their client or the defendant's solicitors what they had done. They therefore proceeded to make a "without notice" application to Judge Crawford Lindsay QC for an order vacating the trial date after an officer of NCIS had told them that it was unlikely that the requisite consent would be granted before the trial started. That judge granted their application and directed that any further application be made to him. The defendant's solicitors were then informed of the terms of the order. They were not, however, told on what basis it had been made. They responded with an application that the judge's order should be set aside and that the claimant's solicitors should be directed to disclose the basis of their application and the evidence they had tendered in support of it. They had guessed, correctly, why the application had been made. Judge Crawford Lindsay adjourned this application and directed that it be heard on notice by a different judge. This led to a hearing before Judge Cowell on 25 th March (the day the trial ought to have begun) and the making of his order which is the subject of this appeal. Finally, on 31 st March 2004, NCIS sent the claimant's solicitors a letter giving consent pursuant to s 335(1) of the 2002 Act.
In his judgment Judge Cowell considered what Dame Elizabeth Butler-Sloss P had said about the interpretation of the 2002 Act in P v P (Ancillary Relief: Proceeds of Crime) [2003] EWHC 2260 (Fam), [2004] Fam 1. He concluded that there was no reason why the claimant's solicitors could not have disclosed both to the court and to the defendant's solicitors the reason for seeking an adjournment (see s 333(2) and (3)) or why they could not have continued to prepare the trial bundles and to take the other preparatory steps necessary for bringing the action to trial. Although Dame Elizabeth said in para 51 of her judgment that the person making a disclosure must not take any further steps until certain procedures contemplated by the Act had been completed, Judge Cowell said that unless and until he was told by a higher court that para 51 had to be complied with literally in every case, he was entitled to rely on his understanding of her judgment and of the Act and on the reasons he himself had given, and to conclude that the claimant's solicitors should inform both the defendant's legal advisers and the court of their real reasons for seeking an adjournment.
Part 2 The jurisdiction of this court to hear the appeal
Although counsel and solicitors appeared for both the parties to the appeal, in addition to counsel and solicitors for the three intervening parties, a difficulty arose at the start of the hearing when it transpired that the parties had by now settled the litigation. In the ordinary way this would be an end of the matter (see Sun Life Assurance Co of Canada v Jervis [1944] AC 111, 113–4 per Viscount Simon LC and Ainsbury v Millington (Note) [1987] 1 WLR 379, 381 per Lord Bridge of Harwich).
The issue at the heart of the appeal is, however, an issue of public law of very great importance which is causing very great difficulties in solicitors' offices and barristers' chambers and in the orderly conduct of contested litigation through the country. The language of s 328 has caused great uncertainty within the legal profession, particularly because Parliament has given a much wider meaning to the phrases "criminal conduct" and "criminal property" than was required by the relevant EU directive.
Since the Act came into force lawyers have become concerned that this section may mean that they themselves are exposed to the threat of criminal sanctions if they do not make "an authorised disclosure" of any information which leads them to know or suspect that their client—or some other person, often the opposing party in family proceedings—is involved in the acquisition, retention, use or control of property derived from criminal conduct, however minor. They then feel obliged to wait for "the appropriate consent" before they take any further steps for their client. They believe that they are protected from breaching lawyer-client confidentiality by the terms of s 338(4) which provides quite simply that
"(4) An authorised disclosure is not to be taken to breach any restriction on the disclosure however imposed."
In practice these disclosures are made to NCIS, a body created by Part I of the Police Act 1997. In theory it may take over five weeks for the lawyer to feel free to take steps on his client's behalf again (see the combined effect of the notice period and the moratorium period contained in s 335 of the Act). In practice, Mr Pannick QC, who appeared for NCIS, told us that the requisite consent is forthcoming within 24 hours in at least 75% of the cases in which lawyers make a disclosure to NCIS. But this welcome information begs the important question whether lawyers outside what is described as the regulated sector (see para 54 below) are obliged to make any disclosures to NCIS at all in breach of lawyer-client confidentiality, and if so in what circumstances.
We were therefore anxious to continue hearing the appeal if we possibly could, so as to comply with the entreaties of all the parties who appeared before us. To send them away empty-handed on an issue of such importance seemed to...
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