Admissibility of illegally-obtained evidence

United Kingdom

The recent fiercely contested takeover battle for Marks & Spencer was enlivened by highly publicised allegations of illegal espionage and highlighted the potential pitfalls of the improper use of private investigators.  It was alleged by Phillip Green that mail containing his wife's bank statements had been intercepted and opened, and that his mobile phone records had been accessed by a mysterious third party, never identified.  In the meantime, an approach by M&S to two leading firms of investigators to carry out work including electronic sweeping of its boardroom was reported to have been turned down by each firm, citing conflicts of interest.

It is not surprising, when the stakes are high and sensitive information can make or break a deal or win a dispute, that the temptation to cut corners and steal a march on the opposition can be overwhelming. This  rticle outlines some of the pitfalls for clients and their advisers when the Courts become involved and are asked to take judicial notice of illegally obtained evidence.

Modern developments in the law suggest that the Courts will now look more critically than previously at the way in which evidence is obtained by private investigators.  This can have far-reaching implications for investigators, their clients and any legal or other advisers involved in the evidence gathering process.

The historical approach - Kuruma v R [1955]

Historically, the Court would generally only have been concerned with the intrinsic relevance of evidence.  In Kuruma the Lord Chief Justice, Lord Goddard stated:

"The test to be implied in considering whether evidence is admissible is whether it is relevant to the matters in issue.  If it is, it is admissible and the Court is not concerned with how evidence was obtained".

Kuruma involved an appeal on behalf of a person sentenced to death during the Mau-Mau Emergency in Kenya and is therefore far-removed from most modern-day facts and circumstances; it can no longer be considered a reliable authority.  A native Kenyan on a bicycle was stopped and searched at a police roadblock. After the discovery of two rounds of ammunition and a pocket-knife he was convicted and sentenced to death.  The issue arose as to whether the police search powers had been legal - and therefore the evidence derived from it admissible - having regard to the exact location of the roadblock.   The Privy Council held that the evidence derived from the police search was admissible even if the police had exceeded their powers.  Kuruma's appeal was therefore dismissed, although the Privy Council recommended that the death sentence not be carried out immediately because of serious misgivings they formed about the prosecution evidence generally.  

In terms of admissibility of evidence, decisions such as that in Kuruma meant that private investigators could go to almost any lengths to obtain evidence which potentially could turn a case.  There have however been modern developments in which the Court has ruled that evidence obtained by investigators using illegal or fraudulent means will not be covered by legal professional privilege, may be ruled in admissible and, further, may lead to a substantial costs sanctions against those instigating or encouraging illegality.

The modern approach - Dubai Aluminium [1999]

In Dubai Aluminium Company Ltd v Al Alawi [1999] the claimant company brought an action against a former employee (Al Alawi), which it suspected of defrauding them over a long period. Dubai obtained a worldwide freezing order against his assets.  Al Alawi then applied to overturn the freezing order on the grounds that Dubai's investigators had acted illegally in obtaining certain financial information about him, the results of which were set out before the Court in an affidavit sworn by Dubai's solicitor.  In addition, Al Alawi sought an order requiring Dubai and its solicitor to disclose documents relating to the apparently illegal investigations.  Al Alawi argued that these documents were not covered by legal professional privilege because they had been obtained by illegal methods.

Dubai had instructed a firm of solicitors, Page Associates, which in turn instructed a private investigator who used illegal methods to gain unauthorised access to Al Alawi's bank accounts.  The investigator made pretext calls to Al Alawi's banks (in Switzerland and elsewhere) and impersonated him in order to obtain the information.  On the basis of the information set out in the solicitor's affidavit Judge Rix found "a strong prima facie case of criminal or fraudulent conduct" and ruled that such behaviour was not protected by legal professional privilege.  In the same case it was held that the investigator had not committed a criminal act in copying documents found in Al Alawi's dustbins (so-called 'bin-diving').

The Judge acknowledged that there was a clash of public and private interests in this area.  He stated that there was a strong public interest in maintaining legal professional privilege and the underlying rights of privacy.  However, there was an equally strong interest in combating criminal and fraudulent behaviour, and in protecting the victims of such acts by deciding cases justly in the light of all available evidence.  The problem was how to reconcile these competing interests.

Judge Rix said that if such behaviour were to be permitted without any consequence for the conduct of litigation, then the Courts would in effect be sanctioning the use of illegal means to obtain evidence.  He ruled that documents which were generated by illegal conduct were disclosable and fell outside the legitimate area and the protection of legal professional privilege.  To rule otherwise would mean that the party employing criminal or fraudulent behaviour would have the power to decide which information he was willing to rely on and disclose, and which he was not.  Judge Rix said:

"Where such a party will be asking the Court to make inferences from such material, it is only fair that such material should be seen as a whole."

In the Judge's view his decision was consistent with Kuruma as the Court would be able to make a decision based on all of the evidence rather than that chosen selectively by the party indulging in criminal or fraudulent behaviour.  Thus, a party seeking to rely on illegally obtained material which is helpful to its case, must take the risk that, if challenged, it is likely to be forced to disclose other evidence that may be unhelpful, embarrassing or which exposes it to a civil claim or even criminal prosecution.

Impact of the Human Rights Act 1998 - Jones v University of Warwick [2003]

Even more recently the Court of Appeal case Jones v University of Warwick [2003] has illustrated that the Courts may rule not only that evidence gathered through illegal means may be struck out altogether, but that serious cost sanctions can be imposed against the party seeking to rely upon such evidence.  In Jones Lord Woolf had to consider the same public interests as in the Dubai case; on the one hand the public interest that in litigation the truth should be revealed, on the other that the Courts should not be seen in any way to be encouraging a party to break the law in the course of evidence-gathering.

Mrs Jones had an accident at work when a heavy cash-box with a damaged lid fell on her hand, badly cutting it. She subsequently claimed more than £130,000 from the University as her former employer.  An investigator acting for the University's insurers gained access to Mrs Jones' home posing as a market researcher and used a hidden camera to film her doing various tasks and using her hand apparently normally.  Mrs Jones' lawyers contested the admissibility of this video evidence for breach of Article 6 (right to a fair hearing) and Article 8 (right to a private life) of the European Convention on Human Rights (which was incorporated into UK law by the Human Rights Act 1998).  They asked the Court to use its discretion to exclude the video evidence.  That discretion is contained within CPR 32.1(2) which states that the Court may use its power to exclude evidence that would otherwise be admissible.

In the High Court, Judge Harris ruled that the evidence was admissible on the basis that "the overriding objective in a civil case is that the Court should deal with the case justly".  He felt that the insurers should be able to seek to prevent and uncover what it considered an unjustified, exaggerated or dishonest claim even if this was at the expense of the Claimant's privacy.  His reasoning was that the parties should be on a level playing field; Mrs Jones knew how badly her hand was damaged but her former employer did not and suspected that the claim was bogus.  In these circumstances the Judge was prepared was to overlook what he clearly regarded as relatively trivial infringements of Mrs Jones' privacy rights in order to get at the truth.

The decision was appealed and the Court of Appeal also allowed the illegally obtained video evidence to be used. However, it took a markedly different view to that taken by Judge Harris.   Lord Woolf said that when the Court exercises its discretion in accordance with the overriding objective (of the Civil Procedure Rules), it must consider the effect of a decision upon litigation and the law generally.  In this case the investigator acting for the University's insurers was responsible for the commission of trespass by its agent entering the Claimant's house and for infringing her privacy contrary to Article 8 (1) ECHR.  Such action must be considered by the Court in exercising its discretion in making orders as to the management of proceedings because of its wider potential impact upon other cases and the conduct of disputes generally.  Although the Court of Appeal decided that the conduct of the University's insurers was not so outrageous that the video evidence should be excluded, it did make clear that the conduct of its agents was improper and unjustified.  It therefore ruled that the costs of the various hearings on the issue of admissibility (and, subject to the outcome of the trial, potentially of the whole case) should be borne by the insurers who had instigated and condoned the illegal evidence-gathering.  In the context of the sums in issue in that case the costs sanctions were substantial. 

Conclusion

Illegal evidence-gathering will always go on; equally, it is clear that it will never be openly condoned or encouraged by the Courts.  In some cases the Courts will continue to admit evidence which has been obtained illegally, albeit that this will be on a case-by-case basis and a party seeking to rely on such evidence cannot be confident of success and must be alert to the considerable risks involved.  The significant development in the modern cases is that parties (and their advisors, in particular their legal advisors) are on notice that the Courts will increasingly be likely to use cost sanctions to discourage illegal evidence gathering, even where the evidence obtained is ruled to be admissible. Whether or not those costs sanctions are significant in relation to the sums at stake for the client it is also important to note that, in serious cases, illegal evidence-gathering may result in prosecution and imprisonment, as well as exposure to civil claims. That exposure extends not only to the investigator but to any other person instigating or conspiring in the commission of an illegal act.

August 2004: The joint authors of this article were Stephen Kilner (trainee solicitor) and Simon Chandler (solicitor) in the Bristol office of the insurance and reinsurance group, both of whom can be contacted on +44 (0)117 930 0200 or at stephen.kilner@cms-cmck.com and simon.chandler@cms-cmck.com .