R (Evans and Another) v Director of Serious Fraud Office

Wednesday, 23rd October 2002

This is an application to apply for permission to seek judicial review of two decisions of the respondent: first, a decision of 13th September 2002 to issue notices under section 2(2) of the Criminal Justice Act 1987 requiring the claimants to answer questions and provide information in connection with a criminal investigation in the United States; and, secondly, a decision of 27th September 2002 refusing to disclose to the claimants' solicitors the letter of request which the Secretary of State had received from the United States authorities.

For reasons I will explain, we grant permission only in relation to the second decision and, having heard all relevant submissions, I propose to deal with that application for judicial review substantively in the course of this judgment.

The claimants are a chartered accountant and a senior managing clerk. They practice as members of the firm of Hargreaves, Brown and Benson at Colne in Lancashire. An investigation is taking place in New York State into the activities of a man named Stanley Tollman and others, and in particular in relation to the Travel Corporation Ltd and its parent and subsidiary companies. What is under investigation is said to be a serious or complex fraud, and a prosecution has now been launched. It is in that context that on 11th September 2002 the United States Department of Justice sought from the Secretary of State the assistance of the Director of the Serious Fraud Office to obtain evidence and information from the claimants. It is not suggested that the claimants are themselves under suspicion, but the obvious inference is that, in a professional capacity, they had dealings with either the individuals or the companies which dealings are of interest to the authorities in the United States. The matter is of some urgency because if information can be acquired, it is intended to lay it before a grand jury this month or early next month in accordance with a timetable set by the District Judge in the United States.

Two issues are raised by the claimants in these proceedings, first, whether they or their solicitors are entitled to see the letter of request so as to satisfy themselves that the information requested by and provided to the Serious Fraud Office is properly within its terms, and, secondly, whether when the Secretary of State receives such a letter and acts upon it by requesting the Director of the Serious Fraud Office to exercise her powers under section 2 of the 1987 Act she is entitled to exercise all of those powers to the same extent as if the investigation was being conducted into criminal offences in England and Wales.

I look therefore at the first issue. On 13th September 2002 Ms Garlick of the Serious Fraud Office wrote to each of the claimants advising them of the issue of the notice under section 2 of the 1987 Act requiring their attendance to answer questions and furnish information, and giving a brief outline of the general nature of the New York investigation. The proposal was for Mr Okula, the Assistant United States Attorney for the Southern District of New York, to visit the claimants' offices with a representative of the Serious Fraud Office on 2nd October 2002.

On 26th September 2002 the claimants' solicitors wrote to the Serious Fraud Office seeking "a copy of the request and information that the Secretary of State has put before you from the US Department of Justice" and reasons why the Director had acceded to the request. That was answered by the Serious Fraud Office in a letter dated 27th September 2002 refusing to disclose the letter of request on the basis that it is a confidential document, but the letter went on to provide detailed information as to the American investigation based on the letter of request.

It is common ground that letters of request to the Secretary of State from the US Department of Justice are confidential documents. They are made pursuant to a 1994 treaty between the United Kingdom and the United States, article 7 of which is headed "Confidentiality and Limitations on Use" and begins thus:

"The Requested Party shall, upon request, keep confidential any information which might indicate that a request has been made or responded to. If the request cannot be executed without breaching confidentiality, the Requested Party shall so inform the Requesting Party which shall then determine the extent to which it wishes the request to be executed."

Such a provision is, we understand, common in treaties dealing with mutual legal assistance.

But Mr Perry, for the claimants, contends that the letter of request should be revealed, first, so that the claimants can obtain legal advice as to whether the notice under section 2 of 1987 Act has been properly given, and, second, so as to enable the claimants to be sure that the material sought falls within the scope of the letter of request. To some extent, he submits, the obligation as to confidentiality imposed by the treaty must yield, and if the requesting state will not waive its right to maintain confidentiality, then the court should prevent action from being taken by the Serious Fraud Office.

Mr Qureshi, for the respondent, accepts that there may be circumstances in which it would be appropriate to disclose a letter of request to a suspect in a redacted form, assuming that the requesting state agreed to that course, but that could only be where the person against whom the section 2 notice was directed could point to some risk of injustice if disclosure, or at least partial disclosure, did not take place, for example, if it was asserted that the proceedings or the investigation in the foreign state were being conducted in bad faith, as happened in the case of Zardari, decided by this court on 11th March 1998, and no such assertion, it is pointed out, is made in the present case, where of course the claimants are not suspects and have been told all they need to know.

In Zardari the court was concerned with costs. In October 1997 the Government of Pakistan had made a request for mutual legal assistance in relation to criminal proceedings said to be in train against Mr Zardari, who was under arrest in Pakistan. His solicitors sought disclosure of the letter of request, and when that was refused they sought to challenge the refusal by means of an application for judicial review. Because it was asserted that the criminal proceedings were not being brought in good faith, leave to move was granted and the gathering of evidence to present it at a nominated court in this country was stayed. The Government of Pakistan then indicated that it had no objection to the disclosure of the substance of the request and full disclosure was given by the Secretary of State, so that the only remaining issue was one of costs. In the end the court refused to make any order, but Lord Bingham CJ described the outcome of the application for judicial review as being "by no means a foregone conclusion one way or the other". As he pointed out, some of the suspects likely to be the subject of investigation and prosecution abroad will be powerful, rich, ruthless and sophisticated criminals, they may be very anxious to know the full contents of the letter of request which, in order to satisfy the Secretary of State in relation to the matters spelt out in section 4(2A) of the Criminal Justice (International Co-operation) Act 1990, may have to reveal matters not yet in the public domain. That subsection, so far as relevant, reads:

"… if the Secretary of State is satisfied —

(a) that an offence under the law of the country or territory in question has been committed or that there are reasonable grounds for suspecting that such an offence has been committed: and

(b) that proceedings in respect of that offence have been instituted in that country or territory or that an investigation into that offence is being carried on there

and it appears to him that the request relates to an offence involving serious or complex fraud, he may, if he thinks fit, refer the request or any part of the request to the Director of the Serious Fraud Office for him to obtain such of the evidence to which the request or part referred relates as may appear to the Director to be appropriate for giving effect to the request or part referred."

Obviously, as it seems to me, the requesting state may have a perfectly proper interest in ensuring that there is no early disclosure of some of the material contained in the letter of the request. Mr Perry really did not argue otherwise.

In my judgment, as Mr Qureshi submitted, having regard to the treaty obligations it is right to start from the position that the letter of request is not a disclosable document, but justice must be done to those who are the subject of a section 2 notice pursuant to a letter of request and the consequential request from the Secretary of State to the Director of the Serious Fraud Office pursuant to section 4(2A) of the Act. The needs of justice can normally be met, as in this case, if when a request is made for disclosure of the...