R (Corner House Research and Another) v Director of the Serious Fraud Office
| Jurisdiction | UK Non-devolved |
| Judge | LORD RODGER OF EARLSFERRY,LORD HOFFMANN,LORD BROWN OF EATON-UNDER-HEYWOOD,LORD BINGHAM OF CORNHILL,BARONESS HALE OF RICHMOND |
| Judgment Date | 30 July 2008 |
| Neutral Citation | [2008] UKHL 60 |
| Date | 30 July 2008 |
| Court | House of Lords |
(Criminal Appeal from Her Majesty's High Court of Justice)
[2008] UKHL 60
Appellate Committee
Lord Bingham of Cornhill
Lord Hoffmann
Lord Rodger of Earlsferry
Baroness Hale of Richmond
Lord Brown of Eaton-under-Heywood
HOUSE OF LORDS
Appellants:
Jonathan Sumption QC
Philip Sales QC
Vaughan Lowe QC
Hugo Keith
Karen Steyn
Rachel Kamm
(Instructed by Treasury Solicitors)
Respondents:
David Pannick QC
Dinah Rose QC
Philippe Sands QC
Ben Jaffey
(Instructed by Leigh Day & Co)
Interested Party (BAE Systems plc)
Julian Knowles
(Instructed by Allen & Overy LLP)
Interveners (Justice)
Nigel Pleming QC
Thomas de la Mare
Shaheed Fatima
(Instructed by Mayer Brown International LLP)
My Lords,
The issue in this appeal is whether a decision made by the appellant, the Director of the Serious Fraud Office, on 14 December 2006, to discontinue a criminal investigation was unlawful. The Queen's Bench Divisional Court (Moses LJ and Sullivan J) held it to be so: [2008] EWHC 714 (Admin). That court accordingly quashed the Director's decision and remitted it to him for reconsideration. In this appeal to the House the Director contends, as he contended below, that the decision was not unlawful. Mr Robert Wardle, the Director who made the decision under review, has now been succeeded in his office, but this change of office-holder does not affect the issue to be decided. The respondents are public interest organisations. The House has received written submissions on behalf of JUSTICE.
The facts
By sections 108-110 of the Anti-terrorism, Crime and Security Act 2001 it was made an offence triable here for a UK national or company to make a corrupt payment or pay a bribe to a public officer abroad. The payment or bribe must not be authorised or approved by the officer's principal. The enactment of these sections gave effect to the UK's obligation under the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (1997).
Under section 1(3) and (5) of the Criminal Justice Act 1987 the Director "may investigate any suspected offence which appears to him on reasonable grounds to involve serious or complex fraud", and "may … institute and have the conduct of any criminal proceedings which appear to him to relate to such fraud". In performing his functions the Director is subject to the superintendence of the Attorney General (section 1(2) of the Act). On 29 July 2004 the Director, as authorised by section 1(3), launched an investigation into allegations of corruption against BAE Systems Plc. That company has observed but not participated in these proceedings. No finding has been made against it. One aspect of the investigation concerned what is known as the Al Yamamah contract, a valuable arms contract between Her Majesty's Government and the Kingdom of Saudi Arabia for which BAE was the main contractor. The contract contained a confidentiality clause binding on both Governments. A valuable extension to the contract, providing for the supply of Typhoon aircraft, was in course of negotiation in 2004-2006. Between 30 July 2004 and 14 December 2006 a team of SFO lawyers, accountants, financial investigators and police officers investigated the allegations of corrupt payments allegedly made by BAE in connection with this contract. During the investigation the SFO issued a number of statutory notices to BAE seeking information and disclosure. The fifth of these notices, issued on 14 October 2005, required BAE to disclose details of payments to agents and consultants in connection with the Al Yamamah contract.
In response to this notice BAE wrote an unsolicited letter dated 7 November 2005 to the Attorney General, Lord Goldsmith QC, enclosing a memorandum marked "Strictly Private and Confidential". The gist of the memorandum was that disclosure of the required information would adversely affect relations between the UK and Saudi Arabia and jeopardise the Al Yamamah contract because the Saudis would regard it as a serious breach of confidentiality by BAE and HMG. The letter said that the issues canvassed in the memorandum had been discussed with Sir Kevin Tebbit, Permanent Under-Secretary of State at the Ministry of Defence, who on the same date, 7 November, telephoned the Legal Secretary to the Law Officers (hereafter "the Legal Secretary") to express his view that this was a unique case in which the public interest should be considered at an early stage. The Legal Secretary replied to BAE. He said that the Law Officers were aware of BAE's letter but had not read the memorandum, that it was not appropriate for representations to be made privately to the Law Officers, that the proper recipient of such representations was the SFO and that the letter and memorandum had been forwarded to the Director.
Mr Cowie, the SFO's Case Controller, wrote to BAE's solicitors on 15 November 2005. In his letter he complained of BAE's failure to comply with the fifth notice and questioned why the pursuit by the SFO of its independent powers of investigation could properly be regarded as a breach of confidentiality on the part of HMG. He made reference to the OECD Convention on Bribery and quoted the terms of article 5 of the Convention:
"Investigation and prosecution of the bribery of a foreign public official shall be subject to the applicable rules and principles of each Party. They shall not be influenced by considerations of national economic interest, the potential effect upon relations with another State or the identity of the natural or legal persons involved."
Mr Cowie invited BAE's solicitors to supply any material there might be pertaining to the national interest.
On 15 November 2005 Sir Kevin Tebbit telephoned the Director to tell him that the investigation created a serious risk of damage to important aspects of the UK's relationship with Saudi Arabia. He suggested that the question of where the balance of the public interest lay should be considered at that stage. The Director considered that if he was to insist on compliance by BAE with the fifth notice he should be in a position to inform the company that its public interest representations had been fully considered with all the relevant authorities. He therefore sought the advice of the Attorney General. On 30 November 2005 the Secretary to the Cabinet asked the Attorney General whether it would be proper for the government to make any representations as to the public interest considerations raised by the SFO investigation and, if so, whether such representations could be made at the investigation stage. The Attorney General said he would consider this and respond. On 2 December 2005 the Attorney General and the Director decided that it would be appropriate to invite the views of other Government ministers, in order to acquaint themselves with all the relevant considerations, so as to enable them to assess whether it was contrary to the public interest for the investigation to proceed. This practice is familiarly known as a "Shawcross exercise", since it is based on a statement made by Sir Hartley Shawcross QC, then the Attorney-General, in the House of Commons on 29 January 1951. The effect of the statement was that when deciding whether or not it is in the public interest to prosecute in a case where there is sufficient evidence to do so the Attorney General may, if he chooses, sound opinion among his ministerial colleagues, but that the ultimate decision rests with him alone and he is not to be put under pressure in the matter by his colleagues.
On 6 December 2005 the Attorney General initiated a Shawcross exercise. The Legal Secretary, on his behalf, wrote to the Cabinet Secretary inviting ministers to provide any information which might be relevant to the decision whether it was in the public interest to continue the investigation. The letter quoted article 5 of the OECD Convention, and referred to the Attorney General's assurance to an OECD working group evaluating the UK's compliance with the Convention in 2004 that "none of the considerations prohibited by Article 5 would be taken into account as public interest factors not to prosecute" foreign bribery cases. The letter made clear that the final decision would be one for the SFO and the Attorney General acting independently of government and having due regard to the OECD Convention. The letter was copied to a number of official recipients. On 7 December 2005 the Director spoke to BAE's Group Legal Director, who wished to make further representations as to the public interest. The Director told him that as BAE was the suspect in a criminal investigation it would be better if he made any representations in writing, by the following day. The Director indicated that since BAE was a suspect he did not think he would give much weight to the company's views on the public interest in continuing the investigation.
BAE sent a further memorandum to the Director on 8 December 2005. The Cabinet Secretary responded to the Attorney General's invitation on 16 December, attaching a note which had been seen by the Prime Minister, the Foreign Secretary and the Defence Secretary, and which had their support. The note was largely directed to the importance of the commercial relationship between the UK and Saudi Arabia but also stressed the importance of the UK's relationship in the context of national security, counter-terrorism and the search for stability in the Middle East. Saudi Arabia was described as "a key partner in the fight against Islamic terrorism". The note accepted that the decision was one for the Attorney General and the Director acting independently of...
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Subject Index
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