Kent Pharmaceuticals Ltd, R (on the application of) v Serious Fraud Office & Ors

A statutory power to disclose material seized during a fraud investigation may satisfy Article 8(2)’s requirement that interference be in accordance with law even though the power is broadly expressed. Absolute certainty is unnecessary where the statutory framework identifies the decision-maker and recipients, requires lawful and reasonable exercise, and permits public-law review. Fairness is context-sensitive. The usual starting point is that the owner should receive sufficient notice to object, but urgency or risk to an investigation may justify disclosure without advance notice. After disclosure, the owner should ordinarily be told. A failure to give adequate notice may nevertheless yield no relief where no prejudice is shown and an effective opportunity to challenge the use of the documents remains.

Kent Pharmaceuticals Ltd challenged the Serious Fraud Office’s disclosure to the Department of Health of documents seized under search warrants obtained pursuant to section 2(4) of the Criminal Justice Act 1987. The Divisional Court held that the disclosure was in accordance with Article 8.2, but found that the SFO had acted unfairly by allowing insufficient time for representations. It granted no relief because the applicant had suffered no material prejudice.

The SFO appealed the fairness finding, and Kent Pharmaceuticals appealed the conclusion on Article 8. The central issues were whether section 3(5)(a) provided a sufficiently precise legal basis for disclosure and whether fairness required advance notice and an opportunity to object.

Disposition

The appeal was dismissed and the Divisional Court’s orders were upheld. The outcome was unanimous, although the judges differed on whether the SFO had acted unfairly on the facts.

1. Article 8. Section 3(5)(a) of the Criminal Justice Act 1987 provided a lawful statutory basis for disclosure to a government department. The expression in accordance with law requires accessibility and sufficient precision to permit reasonable foreseeability, but does not demand absolute certainty. The required degree of precision depends on the subject matter, statutory field, and status of those affected. The stringent approach adopted in cases concerning telephone interception did not apply with the same force to disclosure of investigation material.
2. The statutory framework supplied adequate safeguards. Disclosure could be made only by a designated SFO member and only to specified recipients. Statutory secrecy obligations remained relevant, and the discretion had to be exercised reasonably and in good faith, having regard to the statutory purpose and the purpose for which disclosure was sought. Judicial review, proportionality arguments, and challenges to the use of the material in subsequent proceedings provided potential remedies. Disclosure to assist civil proceedings seeking recovery of losses allegedly caused by the fraud under investigation was within the power.
3. Fairness. Fairness in exercising an administrative discretion is contextual and does not create an inflexible notice requirement. Ordinarily, the owner of seized documents should be told of intended disclosure in sufficient time to make representations or seek relief. Notice may be omitted or delayed where urgency, confidentiality, or the risk of hampering an investigation provides a good reason. After disclosure, the starting point is that the owner should be informed, subject to the same considerations.
4. Kennedy LJ considered that, viewed overall, the SFO had not acted unfairly because Kent Pharmaceuticals was promptly told what had been disclosed, no meaningful objection was realistically available, and no damage was shown. Chadwick LJ held that disclosure the day after a letter indicating that disclosure would occur by the end of the week was unfair absent a compelling reason. Dyson LJ agreed with Chadwick LJ on that factual issue. The majority nevertheless agreed that the procedural failure had caused no prejudice and that no relief should be granted.
5. The Article 6 question was left open because the domestic-law fairness analysis was sufficient. The appeal was dismissed, with no order as to costs. Permission to appeal to the House of Lords was refused.

• Court of Appeal (Civil Division) — On appeal from the Divisional Court, the appeal was dismissed and the orders below were upheld: [2004] EWCA Civ 1494.
• Divisional Court — Refused relief against the SFO’s disclosure of seized documents. It held that the disclosure was in accordance with Article 8.2 but that insufficient notice had made the process unfair.