The Financial Conduct Authority (“FCA”) began a criminal investigation into the first and second defendants’ commercial practices. The FCA obtained material from three overseas authorities pursuant to the provisions relating to mutual legal assistance in criminal matters in Part 1 of the Crime (International Co-Operation) Act 2003. Having decided not to commence criminal proceedings, the FCA brought a civil action under the Financial Services and Markets Act 2000. The first defendant applied to strike out the claim as an abuse of process, contending that the FCA in investigating and formulating the civil claim had, in breach of section 9(2) of the 2003 Act, “used” evidence obtained pursuant to a request for assistance without the consent of the relevant overseas authorities. The FCA contended that (1) it was possible to “use” mutual assistance material for purposes such as informing the content of pleadings, or the questions posed in an investigative interview without falling foul of the collateral use prohibition in section 9(2), and (2) in any event, the standard wording it used in its letters of request sought permission for use in “other judicial proceedings connected with the investigation”, which included civil proceedings.
On the first defendant’s application—
Held, application refused. The natural meaning of the word “used” covered any dealings with the mutual legal assistance material obtained. There was nothing to indicate that Parliament intended the word in section 9(2) of the Crime (International Co-Operation) Act 2003 to bear anything other than its ordinary wide meaning. Furthermore, the wide meaning was necessary to ensure that the scheme of international mutual assistance in criminal matters worked effectively. Therefore, section 9(2) precluded use of any kind, for any purpose other than that stated in the request. Construed against the relevant background, “other judicial proceedings connected with this investigation” in the FCA’s letters of request, could only be understood as a reference to judicial proceedings connected to the criminal investigation and, therefore, did not confer sufficient consent by the relevant overseas authority to use of responsive material in civil investigations or proceedings. The evidence established prohibited use amounting to an abuse of the process of the court, but balancing the competing interests, striking the claim out would not be a proportionate response to the FCA’s conduct. However, given the critical importance to the functioning of the international system of the safeguards and protections enacted in the legislation, the court could not ignore the FCA’s failure to ensure that the necessary safeguard to collateral use in the form of consent had been in place. Accordingly, it would mark its disapproval by preventing the FCA from admitting in evidence in the civil proceedings any of the material obtained via the mutual legal assistance (paras 28–30, 32–33, 38, 59, 66–68, 73, 87, 90, 56, 59, 75, 90, 101, 105, 106–107).
Andrew George KC and Rayan Fakhoury (instructed by Financial Conduct Authority) for the Financial Conduct Authority.
Graham Brodie KC and Richard Power (instructed by BCL Solicitors LLP) for the first defendant.
Andrew Hunter KC and Leonora Sagan (instructed by Boutique Law LLP) for the second defendant.