Mahon v Rahn

Documents disclosed to an accused as part of the prosecution case, and read or referred to in open court, are not subject to an implied undertaking restricting their use in later proceedings. The civil discovery rule rests on the invasion of a litigant’s privacy and the need to encourage full and frank disclosure. Those considerations do not apply in the same way to criminal disclosure, which serves the interests of justice and is governed by distinct common-law and statutory duties.

Any restriction on the subsequent use of criminal-case material must therefore derive from a recognised basis such as public interest immunity or privilege. A libel action founded on used prosecution material is not, for that reason alone, an abuse of process.

The appellants, stockbrokers, brought a libel action against partners of a Swiss bank concerning a letter supplied to regulatory authorities and later disclosed by the Serious Fraud Office in criminal proceedings against the appellants. The letter was read or referred to in open court. The criminal prosecution ended with verdicts of not guilty.

Brooke J struck out the libel action as an abuse of process, holding that an implied undertaking applied to documents disclosed in criminal proceedings, including material used in open court. The appeal concerned whether such an undertaking existed, whether it covered used and unused material, whether it survived open-court use, and whether breach justified striking out the action.

1. The appeal was allowed and the libel action reinstated. The Court declined to decide at that stage whether the respondents might later rely on absolute or qualified privilege.

2. Lord Justice Otton held, with Lord Justice Schiemann agreeing, that no implied undertaking should be implied in criminal proceedings by analogy with the civil discovery rule. Civil discovery is based on compulsion, invasion of privacy and the policy of encouraging full and frank disclosure. Criminal disclosure is made under a different duty, imposed in the interests of justice so that the accused understands the case and can obtain material assisting the defence.

3. The Criminal Procedure and Investigations Act 1996 supported that conclusion. Section 17 restricts the use of specified disclosed material, principally unused material, but permits use or disclosure of material displayed or communicated in open court. The statutory distinction indicates that material forming part of the prosecution case, once used in open court, is not subject to a continuing implied restriction.

4. Otton LJ rejected a blanket public-policy protection for informants. Honest informants were protected by qualified privilege, while exceptional cases involving sensitive sources could be addressed through public interest immunity. Those safeguards did not justify preventing a person from suing upon allegedly malicious statements which had entered the public domain.

5. Lord Justice Staughton reached the same result on the narrower basis that material disclosed as part of the prosecution case was not subject to an implied undertaking, whether or not read in open court. He considered that section 17 dealt with unused material and that it would be unnecessary and anomalous for prosecution-case material to require statutory release.

6. The Court rejected the suggestion that use of the letter in the libel proceedings was independently an abuse of process. Any applicable protection had to be considered through privilege or public interest immunity, not through an implied undertaking attaching to used prosecution material.

• Court of Appeal: Appeal from the order of Brooke J allowing the defendants’ strike-out application. The Court of Appeal allowed the appeal, reinstated the libel action, awarded costs and refused leave to appeal.
• Queen’s Bench Division: Brooke J struck out the action under RSC O.18 r.19 and the inherent jurisdiction on the ground that it was an abuse of process.