On 4 November 2022 Mrs Justice Joanna Smith handed down a judgement in the case of the FCA v Konstantinos Papadimitrakopoulos & Dimitris Gryparis clarifying and further restricting the use to which evidence obtained from an overseas authority may be put outside of that agreed with the foreign authority.
As a former Head of the UK Central Authority for Mutual Legal Assistance, I was particularly interested to read the recent judgment in this case, reaffirming the severe restrictions on non-consensual collateral use of material obtained via MLA.
The Facts
In the course of an investigation into the Defendants’ conduct beginning in October 2015 the FCA had made requests for mutual legal assistance to obtain relevant information and documents from 13 different jurisdictions. Criminal proceedings were brought against both defendants for the publication of false and/or misleading accounting information and other statements between at least 22 November 2010 and 26 October 2015.
However, after failing to extradite the defendants from Greece, the FCA decided that it was in the public interest to bring a civil claim against them “so that at least some form of redress may be obtained for the investors who suffered from [their] actions”. The FCA sought to “deploy the material gathered during its investigation for the purposes of this claim”.
The first defendant applied to strike out this claim on the basis that “the FCA has used MLA Material obtained in the context of a criminal investigation for the purposes of commencing these Proceedings and that it has done so without consent from the relevant overseas authorities.”
Legal Background
The legal framework for MLA is provided for in the UK by the Crime (International Co-operation) Act 2003 (the 2003 Act). Under Section 7, designated prosecuting authority may request assistance “in obtaining outside the United Kingdom any evidence specified in the request for use in the proceedings or investigation.” Section 9 of the 2003 Act qualifies Section 7 stating that “(t)he evidence may not without the consent of the appropriate overseas authority be used for any purpose other than that specified in the request.”
The first defendant relied on this provision to argue that the FCA should not have used MLA material disclosed in the criminal proceedings in the investigation and formulation of their civil suit.
The FCA’s case
The FCA argued that Section 9 of the 2003 Act precludes “a party from deploying (or substantially deploying) MLA Material “in evidence” without the consent of the relevant foreign authority”. The bar is limited to the use of the material in evidence only, and so the FCA were not prevented from using it “for the purposes of informing the content of pleadings, or the questions posed in an investigative interview or the further documents sought during an investigation … as long as the MLA Material is not expressly relied upon in evidence.” This position was amended during the hearing, with counsel for the FCA submitting “that “use” involved deployment or substantial deployment”.
This distinction between “use” of MLA material in evidence (or substantial deployment) as opposed to “use” informing the content of pleadings was based in a large part on the case of Gohil v Gohil [2013] Fam 276 (Gohil), a case in which I submitted evidence to the court.
Gohil v Gohil
Following the dissolution of their marriage, a consent order was agreed under which Mr Gohil would pay a lump sum of £270,00 to his former spouse. This order also recorded Mrs Gohil’s belief that her husband had not made full and frank disclosure. In 2007, continuing in her belief that that Mr Gohil had underrepresented his means, Mrs Gohil commenced proceedings to set aside the consent order alleging that there had been material non-disclosure, fraud and misrepresentation.
Three years later, in 2010, Mr Gohil was prosecuted for various offences including money laundering the proceeds of theft and corruption by James Ibori, a former Governor of Delta State in Nigeria. This case included evidence which had been obtained by the CPS pursuant to requests under section 7 of the 2003 Act, which was heard by Mrs Gohil in open court and suggested that Mr Gohil had, indeed, not disclosed fully his means during his divorce. In October 2011 Mrs Gohil applied to the Family Court for disclosure by the CPS of the papers in the criminal proceedings. The court was asked to determine whether it was lawful to order disclosure to Mrs Gohil of material which the CPS had obtained by requests under section 7 of the 2003 Act.
In its judgement the court found that “Section 9(2) of the 2003 Act clearly prohibits the subsequent use of documents and other articles obtained as a result of the letters of request, even where they have been adduced in evidence in open court.” The previous case of BOC Limited v Instrument Technology Limited [2002] QB 537, in which a distinction was made between the use of MLA material in civil and criminal proceedings was overturned.
However, despite determining that “use” was to be interpreted broadly as covering any use of the MLA material outside of that specified in the request, the court considered the “practical difficulties” arising from reliance on such material after it had been presented in open court. Although the court forbade adducing such material in any proceedings, Mrs Gohil was permitted to “use the information contained in them as a springboard for conducting her own enquiries, with a view to obtaining other evidence on which she can rely without contravening section 9(2) of the 2003 Act.”
It is this distinction upon which the FCA sought to rely in this case, claiming that the material garnered in the criminal investigation provided a springboard for conducting inquiries from which material could be discovered for the civil proceedings.
The Judgement
In considering the Gohil judgement, the court dismissed the argument that there was a general permission to use MLA material as a “springboard” for further enquiries in separate proceedings stating that “the acceptance in paragraph [41] that Mrs Gohil could use the information contained in the documents as a “springboard” for conducting her inquiries is nothing more than a solution to the “practical difficulties” created on the facts of the case by reason of Mrs Gohil already being aware of the content of the documents obtained by the CPS owing to the fact that they had been referred to in open court … the permitted use as a “springboard” was expressly limited by reference to the fact that, in this case, the material was already “in the public domain”.
The court further determined that the use of the MLA material by the FCA was prohibited by section 9(2) of the 2003 Act as a matter of fact and that consent had not been granted by the state from which the material had been obtained for its use in the civil proceedings. The court accepted that the MLA material had been incorporated in to the “warp and weft” of the investigation and stated that either consent should have been obtained for such use or an information barrier should have been erected between those individuals at the FCA who received and considered MLA Material and those individuals who were entrusted with considering and pursuing the civil action.
Therefore the court found that “i) there has been impermissible collateral use of MLA Material provided by the SVG Authorities (prior to the date on which consent was given), albeit of a relatively de minimis nature (see Williams 4 at paragraph [60]); and (ii) there has been impermissible collateral use of MLA Material provided by the Greek Authorities, which use is potentially continuing despite the fact that no consent has ever been given.”. As such “impermissible springboarding has taken place without consent and thus contrary to the requirements of international comity.”
However, the Judge considered that the MLA material was not fundamental to the civil claim and that such materials had not been provided to external counsel. In order to “balance the competing interests, [the court considered] that it would be a harsh result indeed to strike out these proceedings. [Smith J was] not satisfied that it would be a proportionate response to the FCA’s conduct [or] that it is now impossible for D1 to have a fair trial.” Instead, the judge stated that “Retrospective permission at this stage from the Greek Authorities would address the concerns around international comity” and that “none of the materials obtained via the MLA process from either the Greek or the SVG Authorities shall be admissible in the current proceedings. … MLA Materials must be retained solely for the purpose of any future criminal proceedings or returned to the relevant overseas authorities where that purpose has come to an end. They should not be made available to counsel dealing with the civil Proceedings and they should not be accessible by the case workers at the FCA dealing with the civil Proceedings.”
Comment
When I gave evidence in the Gohil case, I made it clear that if the UK were unable to give the guarantees and undertakings regarding collateral use required by some foreign states, there would be a reduction in the level of co-operation that they would be likely to provide and it would be far more difficult for the UK to demand reciprocal restrictions on the use of evidence provided by it to its international partners. As stated in that judgement “these restrictions on collateral use of evidence provided by one state to another are necessary to ensure that the scheme of international mutual assistance in criminal matters works effectively.”.
It is this principle of international comity that underpins any interpretation of the “use” to which any MLA material can be put, or may not be put, in unrelated proceedings. The various arguments, seeking to broaden the permissible use of such material in BOC, Gohil and the present case all attempt to avoid this underlying principle. In each case, attempts were made to interpret the 2003 Act on a purely sematic basis within a vacuum, considering only those words at face value.
In both cases the court rejected these arguments as leading to a false construction when the purpose of the act was considered. The general rule emerges that no material may be used for any purpose, other than that consented to upon its provision, as to do otherwise would undermine the intent of the limitation, which is to assure international partners that the UK will both honour and is entitled to demand restrictions on collateral use. This overrides any clever construction of the word “use” when applied to complex factual circumstances.
How then, do we justify the exception, set out in Gohil, where material heard in open court was permitted to provide a basis for further investigation by Mrs Gohil? On its face, lacking any reconstruction of the meaning of “use”, the general principle of international comity should bar this use of MLA material as well. The situation in Gohil created what the court described as “practical difficulties”, an almost unique situation in which it is impossible to follow both the principle against any alternate use of the material while accepting the reality of the facts.
The MLA material was, perfectly properly, presented in open court under the original terms agreed for its use. Mrs Gohil heard this evidence, as she was permitted to do, from the public gallery. If she was not allowed to base her further investigations on information to which she was properly privy, she would have to conduct those investigations while pretending that she did not know what she did, and was entitled to, know. She would have to be both aware of the material but act as if she was not. At that point it is too late, this Schrodinger’s cat has escaped the bag and is very much alive.
Therefore, the court allows this exception as an unavoidable consequence of the proper use of the material. It could be said that the exception is not a permitted category of use of such material, but rather it is an effect of it having been properly used. Equally, Mrs Gohil was not permitted to present the MLA information in evidence, as this was avoidable when preparing her case.
It is for this reason that, in the present case, the Judge did not consider the entwining of information in the civil and criminal cases to be a permissible springboard for use of the material. As stated in the judgement “I do not consider that I can properly ignore the FCA’s failure to ensure that the necessary safeguard to collateral use in the form of consent (or indeed the establishment of information barriers) was in place.” The exceptional dilemma presented in the Gohil case, whereby a person would both be aware of information but be unable to act upon it, was not unavoidable here.
It is clear from this judgement, and the development of caselaw leading up to it, that the court is loathe to permit any deviation from the principle that MLA material may not be used for any other use than that consented to by the providing authority. Although further attempts may be made to persuade the courts that various interpretations of the simple words of the 2003 Act may create exceptions to this rule, these are likely to fail if the central principle is not respected or the parties cannot show that the circumstances make the principle impossible to follow.
Tags: Case Summary, Mutual legal assistance Categories: United Kingdom
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