Taylor and Others v. Director of the Serious Fraud Office and Others

The House of Lords dismissed the libel appeal. The court held that (1) documents disclosed by the prosecution to the defence as unused material give rise to an implied undertaking, analogous to the civil discovery undertaking, that they will not be used for collateral purposes without the leave of the court; and (2) alternatively (and in the view of a majority) statements made or written in the course of a criminal investigation by investigators or persons assisting the investigation fall within an extension of the absolute immunity that protects witnesses and potential witnesses, provided the statement is "part of the process of investigating a crime or a possible crime". The court therefore sustained the strike-out of the libel action either on the basis of the implied undertaking or on the basis of absolute immunity for investigatory communications.

The claimants (Mr Taylor and an Isle of Man company connected with him) sued for defamation in respect of (a) a letter from an S.F.O. lawyer to the Attorney-General of the Isle of Man seeking assistance under section 24 of the Criminal Justice Act 1990 (Isle of Man) and (b) an S.F.O. file note recording investigatory discussions. Those documents had been disclosed to the defendants (the accused) as "unused material" in criminal proceedings. The S.F.O. and others applied to strike out the libel action. At first instance Sir Michael Davies struck out the action on the ground that the disclosure carried an implied undertaking not to use the documents for collateral purposes. The Court of Appeal held itself bound by Mahon v Rahn and rejected the implied undertaking ground but upheld the strike-out by extending the absolute immunity attaching to witnesses to persons participating in investigations. The claimants appealed to the House of Lords.

• Nature of the claim: libel action seeking damages for defamation based on two documents disclosed by the prosecution as unused material.
• Issues framed: (i) whether disclosure by the prosecution gives rise to an implied undertaking prohibiting collateral use of disclosed material; (ii) whether absolute immunity from suit extends to investigators and others participating in a criminal investigation (statements "part of the process" of investigation).
• Procedural history: High Court strike-out (Sir Michael Davies), Court of Appeal appeal (relying on Mahon v Rahn and upholding strike-out on immunity ground), appeal to House of Lords ([1998] UKHL 39).

Court's reasoning: The House concluded that the public interest in protecting privacy and confidentiality of persons providing material to investigators, and in preventing collateral publication of material disclosed only to secure a fair trial, supports an implied undertaking not to use unused material for collateral purposes. The House also accepted that the policy underlying absolute immunity for witnesses extends, for necessity reasons, to investigators and those who assist investigations so long as the communication is fairly part of the investigatory process; thus such investigatory statements are protected by absolute immunity from defamation suits (subject to separate remedies for malicious abuse of process). The two doctrines are complementary: the implied undertaking constrains collateral dissemination while the immunity protects investigatory freedom of speech.

Appeal dismissed. The House held that documents disclosed by the prosecution as unused material give rise to an implied undertaking against collateral use and that statements and documents which are "part of the process of investigating a crime or a possible crime" attract absolute immunity from defamation, so the strike-out was justified. The implied undertaking preserves court control over collateral uses of disclosed material and the extension of absolute immunity was justified by necessity to secure effective investigatory communications.

High Court (strike-out by Sir Michael Davies) 26 July 1996; Court of Appeal dismissed the claimant's appeal and upheld strike-out on an immunity ground (Court of Appeal [1997] 4 All E.R. 887, relying on Mahon v. Rahn [1998] QB 424); appeal to House of Lords, resulting in dismissal ([1998] UKHL 39).