Investigating the investigators – what happens to your seized privileged documents?

Stacey McEvoy

In the context of a recent challenge of the SFO’s use of its seize and sift powers to process privileged documents, the High Court permitted the SFO to use in-house technical staff to process such documents, finding it did not have to show that there was no real risk of disclosure to the investigating team. Despite this victory for the SFO, the decision also spelt out positive obligations for all investigating authorities handling privileged documents: including what to do when privileged documents are inadvertently disclosed to the investigating team.

 

How does it work in practice?

By way of reminder, items subject to legal professional privilege (LPP) generally cannot be seized by the investigating authority; however, they may be empowered to where it is not reasonably practicable to separate privileged and non-privileged material.
Following such a seizure, in the hands of the Serious Fraud Office (SFO) the material will be handled in accordance with its Operational Handbook. For electronic material, it will:

  1. Process and load the material onto its Digital Review System (at which point it is not yet available to the investigating team).
  2. Apply search terms designed to isolate the privileged material provided by the owner of the data (or his/her legal representative) to the data.
  3. Confine the results of the search terms to a separate folder for review by an independent, non-SFO, lawyer.
  4. Upon conclusion of the review, return privileged documents to the target, and release non-privileged materials to the investigation team.

shutterstock_313099265_smallWith the exception of the privilege review, these steps are undertaken by the SFO’s in-house technical staff, who are independent of the SFO’s investigating team, but still SFO-employed.

 

Why the dispute?

The applicant was arrested on suspicion of conspiracy to commit an offence contrary to Bribery Act 2010. His electronic devices (such as phones, USB stick, and computer) were lawfully seized by the SFO. The SFO told the claimant’s solicitors one of the seized devices may contain LPP material (as he had not alerted them to this fact). It sought a list of search terms to isolate the LPP material for independent review, and the claimant refused to provide them.

Instead, in his application for judicial review, he argued that the SFO’s use of in-house IT staff to isolate the potentially privileged material was unlawful, mainly because it gave rise to a real risk that the SFO’s investigative team would gain access to LPP material. On his case, the initial exercise of searching, and isolating, the data, should be contracted out by the SFO to independent third party IT specialists.

The Court definitively rejected this. The SFO, as an investigating body, was “exercising statutory powers for the public good in the investigation of suspected crime”. There was no justification for imposing such a heavy duty on the SFO, and it was not required by law to outsource the preliminary sifting process.

 

Setting the standards for investigating agencies

Notwithstanding its rejection of the immediate case, the Court recognised it remains important for public investigating authorities sifting potentially privileged material to have procedures in place to prevent investigators reading LPP material.

It imposed a positive duty on seizing authorities to “devise and operate a system to isolate potential LPP material from bulk material lawfully in its possession”, such that the system could “reasonably be expected to ensure that such material will not be read by members of the investigative team before it has been reviewed by an independent lawyer to establish whether privilege exists”.

In addition, a seizing authority should have clear guidance in place such that, if a member of an investigating team did read material subject to LPP, that fact is recorded, the potential conflict recognised, and steps taken to prevent privileged information being deployed in the investigation – including, in some cases, removal of the relevant investigator from the case.

 

What does it mean for investigation targets?

From a practice perspective, it is an insight into the SFO’s handling of privileged materials. In circumstances where privileged, or potentially privileged, material is seized, it will be important to both ensure the SFO is proactively put on notice of the existence of that potential material, and to diligently develop comprehensive search terms isolating that privileged material.

Separately, it is extremely helpful to have authority setting out the positive duty on the part of investigating authorities (not just the SFO) sifting potentially privileged materials. In the event that privileged material is perused by the authorities, or the standards set by other seizing authorities are not as high as the SFO’s, it may give the target of the investigation the ability to take action, including potentially seeking the removal of the exposed investigator, or restricting use of matters covered within the privileged material in the investigation.

 

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