Stewart Ford v Financial Services Authority—and Peter Johnson and Mark Owen and Another
| Jurisdiction | England & Wales |
| Judge | The Hon Mr Justice Burnett |
| Judgment Date | 18 April 2012 |
| Neutral Citation | [2012] EWHC 997 (Admin) |
| Court | Queen's Bench Division (Administrative Court) |
| Docket Number | Case No: CO/12389/2010 and |
| Date | 18 April 2012 |
[2012] EWHC 997 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
The Hon Mr Justice Burnett
Case No: CO/12389/2010 and
CO/8289/2011
and
Hodge Malek QC and Saima Hanif (instructed by Withers LLP) for the ClaimantJonathan Crow QC and Eleanor Holland (instructed by the FSA) for the Defendant
Hearing dates: 21 and 22 February 2012
This judgment should be read in conjunction with, and as a continuation of, the judgment handed down on 11 October 2011 [2011] EWHC 2583 (Admin). On that occasion, an Order was made which contained a number of declarations relating to the two documents in respect of which I had concluded that the claimant enjoyed joint interest legal privilege. A tight timetable was laid down by agreement of the parties with a view to any outstanding issues relating to remedies being listed for hearing as soon after 26 October 2011 as was convenient for the parties themselves. It provided for the exchange of lists of proposed remedies, necessary evidence, skeleton arguments and the preparation of authorities bundles. The dispute between the claimant and the FSA had also resulted in the FSA issuing a 'protective warning notice' on 1 June 2011 to guard against the possibility that the Warning Notice issued by the Regulatory Decisions Committee ["RDC"] on 26 October 2010 would be quashed. An application for permission to apply for judicial review of the protective warning notice (CO/8289/2011) was issued by the claimant on 31 August 2011. The Order made after judgment was handed down provided for that application to be dealt with at the remedies hearing.
A lengthy exercise followed in which the parties exchanged evidence. That led to an application for disclosure being issued by the claimant on 15 December 2011. A hearing date for that application was arranged in early January 2012 but the parties vacated it on the basis that both agreed that the issues arising could also be dealt with at the remedies hearing.
After the judgment had been handed down, the FSA wrote to various organisations which had seen the privileged material. They were the Serious Fraud Office ["SFO"], the Insolvency Scheme, the Financial Services Compensation Service ["FSCS"], the Complaints Commissioner, the Cayman Islands Monetary Authority, the Commission de Surveillance du Secteur Financier, Baden & Baden and KPMG Sarl.
In August 2010, the SFO, FSCS and Insolvency Service had all been provided with copies of a Supplementary Investigation Report ["SIR"], appendices to the SIR and underlying documents. The SIR referred to a total of thirty documents over which the claimant originally claimed joint interest legal privilege, including the eight in respect of which permission was granted by Mitting J, which in turn encompassed the only two I concluded attracted LPP. The Cayman Islands Monetary Authority and the Commission de Surveillance du Secteur Financier are overseas financial regulators (the latter in Luxembourg) which, according to the FSA, are concerned with Keydata issues. These bodies had received the same material at the same time as the British bodies. The Complaints Commissioner received a complaint from Mr Owen, one of the interested parties, that the FSA should be censured for having delivered his SIR, a highly confidential document, to a neighbour's house. The Complaints Commissioner has secure access to the SIR via a secure portal into the FSA's database. He upheld the complaint. Baden & Baden and KPMG Sarl are the liquidators of two Luxembourg entities connected with Keydata. Under the FSA regulatory regime they were entitled to copies of the Warning Notices, which were sent to them on 26 October 2010. In paragraph [15] of the judgment it was recorded that 'no dissemination of the contentious material has occurred'. That was correct in so far as dissemination after the commencement of the proceedings is concerned, but the dissemination here described had already occurred.
The terms in which PwC originally waived privilege on behalf of Keydata (as to which see paragraph [8] of the main judgment) contemplated the FSCS seeing the documents. When, in the course of the remedies hearing, Mr Malek QC criticised the FSA for providing material to these other bodies who had not been covered by PwC's waiver, Mr Crow QC was able to confirm that specific authority was obtained from PwC in each case, save for the Complaints Commissioner, for which he apologised on behalf of the FSA. That was because the Complaints Commissioner has access to the SIR in the way already described.
The substance of the letter written to each of the official bodies after the judgment was handed down last October was the same:
" Keydata Investment Services Limited ("Keydata")
Previous FSA disclosure
We refer to the letter sent by the Financial Services Authority ("FSA") to your organisation dated 16 August 2010 (the "Letter") a copy of which is enclosed. The Letter was provided to you with a CD containing a report, appendices and underlying documents referred to in the report (the "CD Contents").
The Letter and the CD Contents were designated as confidential pursuant to the Financial Services and Markets Act 2000 (" FSMA"). They were disclosed to your organisation in accordance with Regulation 3(1)(a) of FSMA (Disclosure of Confidential Information) Regulations ( SI 2001 no. 2188) for the purpose of enabling or assisting the FSA to discharge any of its public functions.
The Letter explained that the CD Contents were to remain confidential in your hands and subject to the restrictions contained in section 348 of FSMA and the exceptions permitted by section 349 of FSMA. Disclosure other than in accordance with these restrictions and exceptions is a criminal offence under English law.
Judicial Review
We refer also to the judgment of Mr Justice Burnett of the High Court of Justice, dated 11 October 2011, a copy of which is enclosed. The judgment concludes that two documents, which had been included within the CD Contents, were, in fact, subject to joint interest legal privilege and should not have been used nor, as a consequence, disseminated by the FSA.
As a result of the judgment there will be a hearing to determine relief, following which we will be able to provide you with further clarification on this matter. However, in the meantime, we hereby request that your organisation refrain from relying on, or using, any of the information contained in the Letter and CD Contents. Moreover, we reiterate that the information contained in the Letter and CD Contents should remain confidential and not be relied on, used or disclosed onwards for any purpose.
Confidentiality
This letter and attachments are confidential. They comprise information that is confidential for the purposes of section 348 of FSMA is (sic) disclosed to your organisation in accordance with Regulation 3(1)(a) of The Financial Services and Markets Act 2000 (Disclosure of Confidential Information) Regulations ( SI 2001 no. 2188) to enable the FSA to discharge its public functions. The information remains "confidential" in your hands and subject to the restrictions contained in section 348 of FSMA and the exceptions permitted by section 349 of FSMA. Disclosure other than in accordance with these restrictions and exceptions is a criminal offence under English law."
The letters to the foreign regulatory authorities referred in the closing sentence to confidentiality governed by international agreements. The letters to Baden & Baden and KPMG Sarl opened in a different way:
" Keydata Investment Services Limited ("Keydata") – Third Party SLS Capital SA
We refer to the letter sent by the Financial Services Authority ("FSA") to your organisation dated 26 October 2010 (the "Letter") a copy of which is enclosed. The Letter was provided to you with Statutory Notices issued by the FSA against Keydata, Mr Steward Ford, Mr Peter Johnson and Mr Mark Owen (the "Warning Notices"). You were provided with these Warning Notices in your capacity as a third party.
These Warning Notices stated the information contained therein was confidential "and should not be disclosed to a third party (except for the purpose of obtaining advice on its contents)". The Warning Notices also referred to section 391 of the Financial Services and Markets Act 2000 (" FSMA") which provides that neither the FSA, nor a person to whom a Warning Notice is given, may publish the notice or any details concerning it."
These passages were then followed by two paragraphs relating to the judicial review suitably adapted to reflect the receipt of the Warning Notices only, rather than the SIR and supporting evidence on CD.
On behalf of Mr Ford, Withers have contacted the Complaints Commissioner, the Insolvency Service, the SFO and Baden & Baden to ask what they have done with the material identified as privileged in the judgment sent to them. The Complaints Commissioner has confirmed that he has caused all the material to be deleted from his database. The SFO has confirmed its willingness to do the same. The Insolvency Service has stated that the CD containing the SIR and appendices is securely held, that no copies of any documents have been made, and that the information has not been relied upon nor has it been disseminated.
The application for disclosure is now limited to (a) copies of the letters of August 2010 sent to the official bodies and of October 2010 to the Luxembourg liquidators...
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