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Wednesday
Feb102016

UK courts: SFO clears legal privilege hurdle in bribery probe

An insight into the difficulties of establishing and protecting e-legal professional privilege arising from a bribery investigation was recently provided in a recent administrative law case. 

The claimant, a bribery suspect, sought to challenge the Serious Fraud Office's use of inside IT specialists for sifting through and isolating potential legal professional privilege (LPP) material from his seized electronic devices.

The SFO’s in house digital forensic units initially deal with or quarantine that material so as to deny its investigative team access until it has been reviewed and released by an independent and outside lawyer.

The claimant sought to advance a number of arguments. The first was a purported inconsistency between the SFO’s operational handbook and the Attorney General Guidelines for e-disclosure.

In particular:

A32. If the material is voluminous, search terms or other filters may have to be used to identify the LPP material. If so this will also have to be done by someone independent and not connected with the investigation.

The court rejected the contention that “someone independent” required the function to be outsourced, holding that there was a clear distinction drawn between the respective independence requirement of the sifting IT forensic units and that of the reviewing lawyer; that the same distinction existed for assessing hard copy material as for digital material; and that had the sifting exercise to be carried out externally, one would have expected clear and incontrovertible language to that effect.

The claimant’s second argument relied on the KPMG/Bolkiah case, which decided that a lawyer in receipt of confidential information from a former client acting for a new client with an adverse interest had to establish that effective measure were in place to  ensure no risk of disclosure.

The claimant contended that “effective measures” meant outsourcing the sifting of LPP material. This argument was rejected on the grounds that there was a clear distinction between a lawyer conflicted by confidential information and that of a publicly tasked agency such as the SFO; and that the actual measures in place made it very unlikely that members of the investigative team could access the pre-sifted material.

The last argument, based on the Tchenguiz litigation, that the IT specialists were in an analogous position to that of independent lawyers attending execution of search warrants, was also rejected.

There was certainly a whiff of Catch 22 around the claimant’s arguments, so the result is perhaps not that surprising. What the case does reveal is the potential complexity and enormity of the task in terms of time and cost that enforcement agencies face in dealing with digital LLP issues, particularly, in major investigations.

The full judgment of the High Court in The Queen (on the application of Colin McKenzie) and the Director of the Serious Fraud Office is here.

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Alistair Craig, a commercial barrister practicing in London, is a frequent contributor to the FCPA Blog.