Judicial Review judgement delivered today by the Administrative Court at the Royal Courts of Justice.
Summary
A judgement arising from a Judicial Review concluded today that:
- The seizure of documents during evidential searches [conducted in April 2002] was in accordance with the law,
- The SFO had acted in accordance with the law regarding its decision to disclose material [obtained through those searches] to the Department of Health,
- The SFO did not act fairly by not giving Kent Pharmaceuticals sufficient notice that could enable Kent to make legal representations about the SFO's intention to disclose material.
The judgement was delivered by Mr Justice Maurice Kay and Mr Justice Mackay.
Background
The SFO is currently undertaking a major investigation into a suspected conspiracy to defraud the NHS in relation to prices charged by suppliers for prescribed penicillin based antibiotics and warfarin between 1 January 1996 and 31 December 2000. The case was referred to the SFO after initial enquiries carried out by the Counter Fraud Directorate of the Department of Health ("DoH").
In April 2002 the SFO obtained search warrants in respect of numerous premises involving six companies and eleven individuals. The search operation took place on 10 April 2002. The warrants were executed by officers from the Metropolitan Police, together with officers from the National Crime Squad. A press release was issued on that day following the searches.
Under the terms of a warrant, police officers lawfully on premises are entitled to search to the extent required for the purpose for which the warrant was issued. Additionally, section 19 of the Police and Criminal Evidence Act, 1984 provides a power for a constable already lawfully on premises to seize a wide category of items. Section 19(3) provides:
"The constable may seize anything which is on the premises if he has reasonable grounds for believing:
- that it is evidence in relation to an offence which he is investigating or any other offence: and
- it is necessary to seize it in order to prevent the evidence being concealed lost altered or destroyed."
As a consequence of the searches the SFO took into custody a substantial amount of documents together with material stored in electronic form.
Kent, by way of a previous judicial review, challenged, inter alia, the lawfulness of four search warrants issued in respect of its business premises and the homes of two of its current or ex-directors together with the extent of the seizure on the day of the searches. The Court rejected these arguments and the SFO was awarded costs in respect of this application.
Under section 3(5) of the Criminal Justice Act, 1987 the Director of the SFO is permitted to disclose information (other than that provided subject to an obligation of secrecy or information which is subject to a written agreement restricting its disclosure) to a number of bodies including a government department discharging its functions on behalf of the Crown.
The DoH was concerned to see any material the SFO may have obtained in the course of its investigation in order to assist the DoH in its contemplated action for damages against any company which may have been involved in agreements to unlawfully manipulate and increase the price at which warfarin was supplied.
An initial quantity of material was disclosed to the DoH in January 2003 to facilitate its action in respect of recovering damages from various companies in proceedings based on alleged agreements to unlawfully manipulate and increase the price at which warfarin was supplied.
In August 2003 a further more substantial amount of material was disclosed to the DoH in electronic format. This amounted to 20,000 documents.
On 12 March 2003 the SFO received a "Letter before Claim" from solicitors acting on behalf of Kent, one of the companies under investigation by the SFO and subject to searches in April 2002. Following correspondence between the parties Judicial Review proceedings were issued on behalf of Kent in the Administrative Court on 4 April 2003 and served on the SFO on 10 April 2003.
Kent challenged the SFO Director's decision to disclose documentation to the DoH on the grounds that it was not lawfully seized and therefore could not lawfully be disclosed to the DoH under s.3(5) of the Criminal Justice Act, 1987. Further complaint was made that Kent were not given the opportunity to make representations as to whether the documents in question should not, or could not, lawfully be disclosed to the DoH.
In a judgement delivered today by the Administrative Court the Court found that the complaints by Kent based on unlawful seizure of the documents failed and rejected their arguments in this regard.
In respect of the disclosure under s.3(5) of the Criminal Justice Act 1987 to the DoH, the Court found that the SFO acted in accordance with the law but that the SFO did not act fairly in respect of the disclosure made in January and that the SFO should have allowed Kent to make representations before the disclosure was made. However the Court did say that the circumstances in which a potential claimant would have any legitimate cause for complaint would be exceptional and accordingly refused to grant any relief to Kent. The judgement stated that "Even now Kent Pharmaceuticals seem somewhat coy about any meaningful representations it could have made. Accordingly we repeat our scepticism about whether it would be appropriate to grant [Kent] discretionary relief".
Commenting on today's judgement, an SFO spokesman said:
"We are pleased that the Court found that the material challenged [by Kent Pharmaceuticals] was lawfully seized and that the SFO had acted in accordance with the law in disclosing material to the Department of Health to assist them with their current proceedings. We are, however, disappointed with that aspect of the judgement concerning whether we had acted fairly".
The SFO intends to apply to the Court of Appeal for leave to appeal against the judgement that the SFO did not act fairly in relation to notice to Kent of disclosure of information to the DoH.
Serious Fraud Office
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Press Office phone 020 7239 7001/7000
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