Taylor v Director of the Serious Fraud Office

Documents disclosed by the prosecution as unused material under its common law obligations are subject to an obligation imposed by law. The recipient must not use them for a collateral purpose without the court’s permission.

By a majority, absolute immunity from suit also protects statements made by investigators, prosecutors and persons assisting an investigation. The statement must be fairly part of investigating a crime or possible crime with a view to prosecution. The immunity bars claims founded on the statement itself, including defamation and conspiracy to give false evidence. It does not bar malicious prosecution, whose cause of action is the malicious abuse of legal process.

The Serious Fraud Office investigated an alleged fraud involving money that had passed through a solicitor and a connected company. An investigating lawyer sent a request for assistance to the Attorney-General of the Isle of Man and recorded a separate meeting with a Law Society employee. Both documents contained statements said to be defamatory of the solicitor and company.

The documents were disclosed as unused material to solicitors acting for defendants in the resulting criminal proceedings. They were then shown to the solicitor, who brought libel proceedings. The High Court struck out the action because prosecution disclosure was subject to an implied undertaking against collateral use. The Court of Appeal, reported at [1997] 4 All ER 887, considered itself bound by Mahon v Rahn but dismissed the appeal on absolute immunity.

The issues were whether common law prosecution disclosure generated an obligation against collateral use and whether absolute immunity extended beyond witnesses and potential witnesses to participants in a criminal investigation.

1. Disposition. The House unanimously dismissed the appeal. Lord Hoffmann delivered the leading speech. Lord Goff agreed with him; Lord Hope agreed and gave additional reasons; and Lord Hutton agreed with both Lord Hoffmann and Lord Hope. Lord Lloyd agreed that the appeal should be dismissed on the implied-undertaking ground.

2. Implied undertaking. Per Lord Hoffmann, with the agreement of all members of the House on this ground, disclosure by the prosecution of unused material under its common law obligations generated an obligation imposed by law against collateral use. The rule protects the privacy and confidentiality of those who supplied information and those mentioned in it. The court retains power to vary or release the obligation where justice requires. The libel action was therefore properly struck out because the disclosed documents could not be used for that collateral purpose without leave.

   The contrary holding in Mahon v Rahn [1998] QB 424 was displaced. The House approved Brooke J’s first-instance reasoning in that litigation. It expressed no concluded view on used material or on whether an obligation survives publication in open court. Section 17 of the Criminal Procedure and Investigations Act 1996 did not determine the antecedent common law.

3. Absolute immunity. Per Lord Hoffmann, Lord Goff, Lord Hope and Lord Hutton, the immunity recognised for witnesses in Watson v M’Ewan [1905] AC 480 extended to investigators, prosecutors and persons providing information during a criminal investigation. The extension was necessary so that information, theories and hypotheses could be communicated without fear of civil proceedings. Modern disclosure rules made such protection especially important because internal investigative material could reach the defence.

4. Controlling test. The majority approved the formulation in Evans v London Hospital Medical College (University of London) [1981] 1 WLR 184. The statement or conduct must be fairly part of investigating a crime or possible crime with a view to a prosecution or possible prosecution concerning the matter investigated. Wholly extraneous or gratuitous defamatory statements remain outside the protection. The documents in issue satisfied this test.

5. Scope of causes of action. Per Lord Hoffmann, the immunity applies where the protected statement itself constitutes the cause of action. It therefore covers defamation and cannot be evaded by pleading conspiracy to give false evidence. It does not bar malicious prosecution because that tort concerns maliciously setting legal process in motion without reasonable cause. The House left unresolved the immunity’s application to negligence and abuse of public office.

6. Separate view. Lord Lloyd concurred in the dismissal but disagreed with deciding the absolute-immunity ground. He considered the extension beyond witnesses and potential witnesses neither logically necessary nor justified by the new disclosure rules. He would have confined the decision to the implied-undertaking ground.

1. House of Lords: In Taylor v Director of the Serious Fraud Office [1999] 2 AC 177, the House unanimously dismissed the appeal. It unanimously upheld the strike-out on the implied-undertaking ground, and a four-member majority also upheld absolute immunity.

2. Court of Appeal: The court dismissed the appeal in [1997] 4 All ER 887. It considered itself bound to reject the implied-undertaking ground but affirmed the strike-out because the documents were absolutely immune from suit.

3. High Court: Sir Michael Davies struck out the libel action as an abuse of process. He held that the disclosed documents were subject to an obligation against use for a purpose other than the criminal defence and could not found the libel action without leave.