Taylor v Director of the Serious Fraud Office

JurisdictionUK Non-devolved
Judgment Date29 October 1998
Judgment citation (vLex)[1998] UKHL J1029-3
Date29 October 1998
CourtHouse of Lords

And Others

Director of the Serious Fraud Office

And Others


[1998] UKHL J1029-3

Lord Lloyd of Berwick

Lord Goff of Chieveley

Lord Hoffmann

Lord Hope of Craighead

Lord Hutton



My Lords,


I would decide this appeal on the first of the two principles discussed by my noble and learned friend Lord Hoffmann. This was the ground on which Sir Michael Davies decided the case, correctly in my view. He was following the closely reasoned judgment of Brooke J. in Mahon v. Rahn [1998] Q.B. 424. Unfortunately Brooke J.'s judgment was reversed on appeal. This provided Mr. Leolin Price Q.C. with the ammunition which he needed.


The Court of Appeal [1997] 4 All E.R. 887 in the present case held that it was bound by its previous decision in Mahon v. Rahn. So they could not decide against the plaintiff on the preferred ground of an implied undertaking. Instead they turned with relief (see per Millett L.J. at p. 905) to an alternative ground not argued before them. They held that the absolute immunity which attaches to witnesses and potential witnesses should be extended to all those taking part in a criminal investigation with a view to a prosecution or possible prosecution. Since the point was not argued, it may be that if it had not been for Mahon v. Rahn it would never have been decided.


Whereas the implied undertaking is a clear cut and relatively straightforward point, the absolute immunity raises issues of far reaching importance on which I would for my part have wished to hear fuller argument. In Watson v. M'Ewan [1905] A.C. 480 the House extended the original absolute privilege attaching to a witness's statement in court to his statements in preparation for court proceedings. This was a natural, necessary and indeed obvious extension of the principle. But I am not persuaded that it is obvious or necessary to extend the principle to those who are not witnesses or potential witnesses at all, but whose only function is to investigate and prosecute crime, such as the Serious Fraud Office, the Crown Prosecution Service and the police.


The new rules on disclosure of unused material, to which my noble and learned friend Lord Hope attaches importance, do not seem to me to justify the extension of absolute privilege to a different class of beneficiary. Nor can I see any logical reason for doing so. Indeed logic would seem to point in the other direction. If the immunity is absolute, how is it to be reconciled with proceedings against the police for malicious prosecution? If there is to be an exception for malice, is this not more consistent with qualified privilege rather than absolute privilege? It is said that qualified privilege is insufficient protection for the reasons stated by Fry L.J. in Munster v. Lamb (1883) 11 Q.B.D. 588, 601. But the same could be said of every case in which the law allows qualified but not absolute privilege.


It is said that the absolute privilege or immunity will not apply unless what is said or done is "fairly part" of the investigation process. But the absolute privilege of the judge and advocate are not subject to that qualification. The privilege applies even though what is said is gratuitous and irrelevant to every issue in the trial: Munster v. Lamb. Does this mean that there is now to be an intermediate level of privilege lying somewhere between absolute privilege on the one hand and qualified privilege on the other?


Reliance was placed on a dictum of Drake J. in Evans v. London Hospital and Others [1981] 1 W.L.R. 184. But I do not see how that case helps. The third and fourth defendants in that case were clearly potential witnesses. This is how Drake J. approached the case at page 191-192. This is how Lord Browne-Wilkinson understood the case in X (Minors) v. Bedfordshire County Council [1995] 2 A.C. 633, 755. In that case, too, the psychiatrist was clearly a potential witness. This is confirmed by Mr. Caldecott Q.C.'s own treatment of the decision in paragraph 3.3 of his written case. The passage in Drake J.'s judgment, at p. 192 on which particular reliance is placed begins with the words "The protection exists only where the statement or conduct is such that it can fairly be said to be part of the process of investigating a crime…." But this passage is prefaced by the words "I would alter it [i.e. the test suggested in Rees v. Sinclair [1974] 1 N.Z.L.R. 180, 187] to apply it to the immunity attaching to a witness or possible witness in a criminal investigation." There is nothing in these decisions which would extend absolute immunity to the Crown Prosecution Service, the Serious Fraud Office or the police.


The merit of deciding the case on the first ground is that it allows a degree of flexibility. It enables the court to keep control of the material in question. This was regarded by Brooke J. and Sir Michael Davies as a factor of importance. I agree with them. There will be little if any flexibility, and little if any control by the courts, if the police are to enjoy absolute immunity in the course of their investigations. Instead of investigating complaints by members of the public whose rights have been infringed, the courts will presumably be met in every case with an application to strike out. I am bound to say that I regard this development with some alarm. But, as your Lordships take a different view, I say no more about it.


On the first ground I am in complete agreement with the speech of my noble and learned friend Lord Hoffmann. I would dismiss the appeal on that ground, but leave the second ground undecided.


My Lords,


I have had the advantage of reading in draft the speech prepared by my noble and learned friend, Lord Hoffmann. For the reasons which he gives I would dismiss the appeal.


My Lords,


1. The Facts


In 1994 the Serious Fraud Office ("S.F.O.") was investigating a fraud involving US $8 million alleged to have been committed by James Fuller, John Savage and a London solicitor named Charles Deacon. The money which they obtained from the victim had passed through the hands of the first appellant, Mr. Taylor, who was a solicitor practising in the Isle of Man, or the second appellant, a company with which he was connected called Monarch Assurance plc. By a letter dated 4 May 1994, Katherine McKenzie, a lawyer employed by the S.F.O., made a formal request to the Attorney-General for the Isle of Man, asking for his assistance in the investigation of the fraud. She requested the Attorney-General to exercise his powers under section 24 of the Criminal Justice Act 1990 (Isle of Man) by summoning Mr. Taylor for an interview about the transactions. This section, so far as material, provides as follows:

"(1)The powers of the Attorney-General under this section shall be exercisable in any case in which it appears to him -

(a)on reasonable grounds that there is a suspected offence involving serious or complex fraud, wherever committed; and

(b)that there is good reason to do so for the purpose of investigating the affairs, or any aspect of the affairs, of any person.

(2)The Attorney-General may by notice in writing require the person whose affairs are to be investigated ('the person under investigation') or any other person whom he has reason to believe has relevant information to attend before the Attorney-General at a specified time and place to answer questions or otherwise furnish information with respect to any matter relevant to the investigation….

(10)The Attorney-General may authorise any person to exercise on his behalf all or any of the powers conferred by this section but no such authority shall be granted except for the purpose of investigating the affairs, or any aspect of the affairs, of a person specified in the authority."


Ms McKenzie's letter presented the facts as they appeared to the S.F.O. They depicted Mr. Taylor's part in the transaction in such a way as to suggest that the S.F.O. suspected him to have been a party to the fraud. The letter concluded with a statement that by reason of the facts stated, the S.F.O. had reason to believe that the use of the powers contained in section 24 was justified and desirable. It invited the Attorney-General to authorise Ms McKenzie and a police officer to exercise those powers on his behalf by interviewing Mr. Taylor.


On 3 June 1994 the Attorney-General sent Mr. Taylor a formal notice requiring him to attend for an interview but owing to illness he was unable to do so. Meanwhile Ms McKenzie had been pursuing her inquiries and on 17 May 1994 she and a colleague called upon a Mr. Rogerson, who worked for the Law Society in the administration of the solicitors' compensation fund, to talk about the transaction, which had given rise to a claim by the victim against the fund. She made a file note of the interview, recording among other things Mr. Rogerson's view that Mr. Taylor should be struck off as a solicitor and her own contention that Mr. Taylor was a co-conspirator.


Mr. Fuller and Mr. Deacon were indicted on charges of conspiracy to defraud and eventually convicted. Mr. Savage was in the United States and died before an application for extradition had run its course. Mr. Taylor, despite the suspicions I have recorded, was not charged. Mr. Fuller's solicitors asked him to give evidence on his behalf. Before meeting him to discuss the case, they gave him a file of documents which had been disclosed to them by the S.F.O. as unused material in accordance with the principles stated by the Court of Appeal (Criminal Division) in Regina v. Ward (Judith) [1993] 1 W.L.R. 619, 679-81 and Regina v. Keane [1994] 1 W.L.R. 746. It included a copy of the letter of 4 May 1994 to the Attorney-General of the Isle of Man and the file note of the meeting...

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