Hughes v Carratu International plc: Enquiry agents and the wrong side of the law
Hughes v Carratu International plc: Enquiry agents and the wrong side of the law
Hughes v Carratu International plc [2006] EWHC 1791 (QB)Enquiry agents will often be instructed to “dig around” into a claimant’s affairs where there are some suspicions on the defendant’s side that not everything is as it should be. However, even enquiry agents have to work within the law, particularly the Data Protection Act 1998, and there are risks for them and those instructing them if they sail too close to the wind.
The background
H received a letter from the Information Commissioner’s Office (ICO) saying that the ICO was dealing with an enquiry agent (X) that had breached the 1998 Act, and that some of the documents seized during this investigation concerned transactions on his bank account. The ICO would not reveal X’s name or give details of who had instructed X. The ICO showed H various documents from X’s file on him, one of which had CI’s name on it (CI being a “corporate investigation consultancy offering investigative services”, in the words of the judge). H asked CI for details of the party on whose behalf CI had instructed X to investigate him but CI refused to give details.
The application
H then brought an application against CI for disclosure of all documentation that was or had been in its possession concerning H’s personal financial affairs, details of X’s identity and details of the party instructing CI. The application against CI was brought as a pre-action disclosure application and also on the basis of the Norwich Pharmacal jurisdiction (where a party gets mixed up in the tortious acts of others so as to facilitate their wrongdoing, he may not have a personal liability to the victim but has a duty to assist the victim by giving full information and disclosing the identity of the wrongdoers).
CI said that its client was a “well respected London law firm” (which it would not name without a court order, as there was a confidentiality clause in the agreement). CI also said that it had reviewed its file and there were no documents in it which referred to information about H that had been obtained unlawfully. Furthermore, the solicitors had instructed CI to return its entire file so that the solicitors could protect their client’s legal privilege. CI denied that they had been instructed, or that they had instructed anyone, to obtain information on H unlawfully, saying that the solicitors’ instructions were to conduct an asset search relating to H and any companies owned by him, based on material in the public domain. Whilst CI admitted that X had sent a fax to CI with H’s bank account details, CI said that an employee had realised that the information must have been obtained unlawfully and it was shredded without a copy being retained.
The result
The judge said that the correspondence and statements from CI were “lacking in candour”. Furthermore, he noted that legal professional privilege needs to be claimed by or on behalf of the lay client, not asserted by CI, but no such claim had been made. Furthermore, such a claim would not be straightforward where information obtained by criminal means was involved. The court could not simply accept the assertions of CI that neither CI nor the solicitors had acted unlawfully. On the basis of information from the ICO, there was reason to believe that there had been a serious breach of the criminal law and X, in sending the fax to CI with illegally obtained information, seemed to have been under the impression that such information would not be unwelcome. “There has been no explanation as to how [X] can have been under so serious a misunderstanding as to the wishes of [CI] that all information be obtained lawfully…”, said Tugendhat J. Accordingly, he made the disclosure order that H wanted.
The ramifications
Those instructing enquiry agents must make sure that the agents are clearly instructed that they, and any sub-agents instructed by them, must not stray over the boundaries of the criminal law when investigations are underway. The risk to solicitors if things go wrong is clear. Firstly, there will be a considerable risk of serious embarrassment in having to explain to the lay client why the enquiry agents’ illegal actions have dragged the lay client into a messy investigation about breaches of the 1998 Act. Secondly, there will be an equal risk of embarrassment (at the very least) in the main litigation. The victim of the illegal investigation would be likely to apply to exclude all the evidence obtained by the enquiry agents, even legitimately, to avoid polluting the court either with directly tainted evidence or evidence that may have been obtained as a result of a “chain of enquiry” from tainted evidence. Thirdly, the risk of prosecution for procuring or inciting a breach of the 1998 Act is something that no solicitor should wish to run. Lawyers to whose attention illegally-obtained evidence is drawn would be well advised to consider the Bar Council’s 2003 Guidance on Illegally Obtained Evidence in Civil and Family Proceedings (which can be obtained from the Bar Council website).