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England and Wales High Court (Queen's Bench Division) Decisions |
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You are here: BAILII >> Databases >> England and Wales High Court (Queen's Bench Division) Decisions >> BES Commercial Electricity Ltd & Ors v Cheshire West And Chester Council [2022] EWHC 2162 (QB) (15 August 2022) URL: http://www.bailii.org/ew/cases/EWHC/QB/2022/2162.html Cite as: [2022] EWHC 2162 (QB) |
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Neutral Citation Number: [2022] EWHC 2162 (QB)
Case No: QB-2017-006111
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Amended pursuant to the order of Mr Justice Freedman
dated 25 May 2023 lifting Reporting Restrictions
Royal Courts of Justice
Strand, London, WC2A 2LL
Date: 15/08/2022
Before:
MR JUSTICE FREEDMAN
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Between:
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(1) BES COMMERCIAL ELECTRICITY LIMITED
(2) BUSINESS ENERGY SOLUTIONS LIMITED
(3) BES WATER LIMITED (4) COMMERCIAL POWER LIMITED |
Claimants |
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- and -
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CHESHIRE WEST AND CHESTER COUNCIL |
Defendant |
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Phillip Marshall QC and Matthew Morrison (instructed by Weightmans LLP) for the Claimants
Fiona Barton QC and Sarah Dobbie (instructed by Clyde & Co LLP) for the Defendant
Hearing dates: 17, 18, 19, 22, 23, 24, 25, 26, 29 & 30 November 2021 and 1, 2, 3, 6, 7, 8, 9, 20 & 21 December 2021
Correspondence from 8 April 2022 from the Claimants seeking to postpone any hand-down until after an application to take into account further disclosure from the criminal proceedings. This was resolved following submissions of the parties in June and July 2022 referred to in the judgment.
On 15 July 2022, the Defendant referred the Court to an expected judgment of HH Judge Knowles QC of an application to stay the criminal proceedings, asking the Court if it wished to defer the hand-down until after the judgment. The judgment was provided to the Court on 29 July 2022: see paras 469-471.
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Approved Judgment
This judgment will be handed down by the Judge remotely by circulation to the parties' representatives by email. The date and time for hand-down is deemed to be 10.30am on Monday 15 August 2022. Following a lifting of reporting restrictions, the judgment was released to National Archives on 25 May 2023.
REPORTING RESTRICTION
By reason of the order made by the Court on 29 November 2021 imposing reporting restrictions in this case, the publication of this judgment in any manner whatsoever is prohibited until the conclusion of the Criminal Proceedings or further order of the court.
LIFTING OF REPORTING RESTRICTIONS
By reason of an order made by the Court on 25 May 2023, the Reporting Restrictions previously in operation as a result of an order made by the Court on 29 November 2021 have been lifted.
MR JUSTICE FREEDMAN:
I Contents
SECTION NUMBER |
SUBJECT |
Contents | |
Introduction | |
The parties | |
Background (a) The Radio 5 programme and OFCOM complaint (b) Trading Standards Investigation (c) Engagement of Mr Bourne (d) Correspondence on behalf of the Claimants to the Defendant (e) Ofgem final report (f) The application for the Search Warrants (g) The evidence of the complainants who gave oral evidence (h) The written application (i) The note of the hearing (j) Execution of the Search Warrants (k) Charges of criminal offences | |
General observations (a) General observations - use of CP materials (b) General observations - disclosure issues (i) Disclosure from the disclosure in the criminal proceedings (a) Debra Vaughan witness statement. (b) Ms Sakly's witness statement (c) The CACS analysis (d) UIA emails (e) Attachments to the Bourne email (f) Text messages between Ms Bailey and Mr Dinn (g) Further transcript of Ms Whitfield (ii) Conclusions (c) General observations - witnesses not called | |
Expert evidence | |
Misfeasance in public office (1) The nature of the tort of misfeasance in public office (i) An unlawful act is required for both limbs of the tort (ii) Must there be knowledge of unlawfulness for the purpose of targeted malice? (iii) The nature of intention to injure for targeted malice (iv) Untargeted malice: the unlawfulness relied upon by the Claimants (2) The Claimants' case about Mr Bourne (3) Observations about Mr Bourne as a witness (4) Allegations that Mr Bourne was dishonest (i) First example: expectation that a search warrant to be issued (ii) Second example: denial of undertaking early internet research (iii) Third example: Mr Bourne's use of a questionnaire (iv) Fourth example: conduct after being taken o ff Operation Best (v) Mr Bourne's understanding of his duties (vi) Admissions concerning Mr Bourne's conduct (5) Initial steps taken by Mr Bourne (6) Mr Bourne's initial dealings with Mr Scrivener (7) Other communications with Mr Scrivener (8) Contact with Mr Scrivener after advice of Mr Williams to take a step back (9) Alleged delegation of investigative role (10) Mr Bourne's interactions with customers submitting Olly Forms (11) Mr Bourne's alleged suppression of evidence (12) Mr Bourne's ongoing relationship with Mr Scrivener
(13) Mr Bourne's relationship with Ms Bailey
(14) Mr Bourne's influence on Search Warrant application statements
(15) The way in which Mr Bourne took statements from the complainants
(i) Mr Maybury and Mrs Maybury
(ii) Mr Whitfield
(iii) Mr McMichael
(16) Appraisal of the evidence of the complainants
(i) Mrs Maybury and Mr Maybury
(ii) Mr McMichael
(iii) Ms Whitfield
(17) Evidence of the Claimants and the impact on credibility of the complainants and Mr Bourne
(18) Allegations against Mr Bourne of failing to check and correct the statements
(19) Conclusion to the section on misfeasance | |
Human rights claim in respect of Mr Bourne's actions
| |
The search warrant application
(1) The pleaded case (2) The law relating to the duty of full and frank disclosure as regards the search warrants (3) Alleged failure of the Defendant adequately to prepare and present the application for the search warrants (a) The Claimants' case (b) The Defendant's case (c) Observations (4) Allegation of improperly seeking and obtaining documents through search warrants instead of seeking documents through cooperation or production orders (a) The Claimants' case (b) The Defendant's case (c) Observations (5) Other allegations of non-disclosure in the presentation of the application for the Search Warrants (6) The Human Rights Act 1998 ("HRA") claim (7) Subsequent evidence relating to the action against Mr Scrivener and Mr Mooney (8) Conclusion | |
Execution of the warrants
(1) The accounts of how the warrants were executed
(2) Was the liability for any unlawful acts in the execution that of the Defendant or the police?
(a) The law
(b) Applying the law to the facts
(3) If the liability was that of the Defendant, were the Search Warrants executed unlawfully? | |
The Claimants' submissions regarding the removal of the servers and their retention (a) The pleaded case (b) The legal framework (c) Were the servers seized retained for longer than necessary? (d) Mr Childs' evidence (e) Observations (f) Retention of property following the return of the servers
(g) Observations (h) Treatment of LPP material obtained on execution (i) Legal framework (j) The evidence and discussion | |
Judgment of HH Judge Knowles QC in Preston Crown Court | |
Conclusion |
II Introduction
III The parties
(1) The First Claimant, a company incorporated under the laws of England and Wales, company number 06882734, on 21 April 2009, sells electricity, predominantly to small businesses. On 30 September 2009, it obtained an electricity supply licence. It commenced trading as a licensed electricity supplier in March 2010.
(2) The Second Claimant, a company incorporated under the laws of England and Wales, company number 04408013, on 2 April 2002 sells gas, predominantly to small businesses. It commenced trading as a licensed gas supplier in February 2005.
IV Background
(a) The Radio 5 programme and OFCOM complaint
"Mr. Pilley was not treated unfairly in the programme as broadcast in that the programme makers took reasonable care in presenting the material facts in relation to the allegations made about Mr Pilley in the report and the programme included a fair representation of the responses which were given to criticisms included in the programme on Mr Pilley's behalf.
Mr Pilley was given an appropriate and timely opportunity to respond to the claims made about him in the programme."
"a complaint regarding the energy supplier Business Energy Solutions has resulted in the commencement of an investigation into the company, its directors and associated companies and directors. It appears that the associated companies are using fraudulent and aggressive measures to commit small and medium enterprises into a long and expensive contract for energy supply".
(b) Trading Standards Investigation
(1) The evidence of Ms Sakly. It is right that she was not called to give evidence, but her evidence was a part of the information before the Court.
(2) Although it was contended by the Claimants that the brokers were independent, Mr Pilley and Ms Davidson are directors of the aggregator that is to say the Fourth Claimant. That takes BES Utilities a stage closer to the brokers.
(3) Further, Mr Qualter was a director of Commercial Reduction Services Limited, now dissolved, and a director of Energy Search Limited and of Commercial Energy Limited (dissolved on 4 August 2015). The best friend of Mr Qualter is Mr Pilley, according to Ms Sakly, and Mr Pilley accepted that he was a long-standing friend. This tends to show that the brokers were not each separate businesses.
(4) On any view, a large part of the customers secured by the brokers came to BES.
(5) An undercover reporter in the Five Live Investigates programme reported that Mr Pilley went to the premises of the brokers, which were close to his premises, and provided bonuses and incentives to the staff.
(c) Engagement of Mr Bourne
"This investigation is covert at the moment so I would appreciate your discretion at this current time.
In the meantime, I would continue to carry on and make as much fuss as you can. Complain to as many people as you can, including your MP.
(I believe that the law should be changed to protect microbusinesses such as yours).
Copy any complaints you make in to Joel Chapman at BES . It appears he gets rid of troublesome complainants by eventually releasing them from their contracts."
(d) Correspondence on behalf of the Claimants to the Defendant
"Our office has received numerous complaints from the proprietors of small businesses, alleging fraud by misrepresentation regarding the supply of energy and telephone contracts. We have obtained in excess of 50 witness statements from such individuals which appear to make out a prima facie case. The m.o. involves a cold call from alleged independent brokers to the business involved which contains various lies and results in unfair contracts with BES and has caused detriment and severe financial harm to each business, forcing several into administration and rendering individuals unemployed. We have been in consultation with Sarah Morgan a barrister at Chester, regarding the progression of this case. We are approaching the stage of the investigation where warrants are to be sworn, served and executed."
(e) Ofgem final report
(1) Breaches 1 and 2 related to a failure to take all reasonable steps to bring the principal terms of contracts, (terms relating to the price and termination fees) to the attention of micro business customers, and to ensure that such information was communicated in plain and intelligible language prior to that contract being entered into. The supplier failed to explain the existence or calculation of possible termination fees to customers if the contracts terminated early (141 customers had paid a total of about £80,000 in termination fees to BES). It was stated that there would be price reviews during the currency of the contract, but there was a failure to explain the details of how and when price reviews might take place. Further, there was a failure to explain how customers faced increased standing charges for not using a minimum amount of energy: over 7,000 customers were affected. Since the majority of the customers had signed up for 4-year or 5-year contracts, these failings were particularly serious. This breach occurred through the contract validation scripts provided to and used by brokers to communicate prior the contract being made.
(2) Breach 3 arose from the same actions and behaviour described in breaches 1 and 2 and related to a breach of the standards licence conditions.
(3) Breach 4 was also a breach of the standards licence conditions and related to the statement of renewal letter sent by BES to its customers when nearing the end of their energy contract with the company.
(4) Breach 5 related to terms of standard contracts, which wrongly required notice from customers on deemed contracts seeking to transfer to another energy supplier.
(5) Breach 6 related to transfer blocking by BES of those non-domestic customers in deemed contracts seeking to transfer to another supplier. They thereby caused them to pay higher prices for their energy than they would have done at their preferred supplier. 108 customers on deemed contracts had been identified to have been blocked. BES had agreed to amend its terms and conditions in this respect.
(6) Breach 7 related to complaint handling, that is having inadequate complaints procedures.
(f) The application for the Search Warrants
(g) The evidence of the complainants who gave oral evidence
(h) The written application
Reasons for the applications
This application is as a result of complaints initially made to Blackpool and Lancashire Trading Standards concerning the alleged mis-selling of BES energy contracts. The offences being;
Fraudulent misrepresentation contrary to Section 2 of the Fraud Act 2006.
Fraud by failing to disclose information contrary to Section 3 Fraud Act 2006 (which includes offences by company officers, pursuant to Section 12 Fraud Act 2006).
Fraudulent Trading contrary to Section 993 of the Companies Act 2006.
Conspiracy to commit fraud, contrary to Section 1 of the Criminal Law Act 1977.
Conspiracy to Defraud, contrary to Common Law.
Nature of the alleged fraud
The nature of the alleged fraud is that two businesses are operating in tandem. The first, trading under the names Energy Search Limited, Commercial Energy Limited and Commercial Reduction Services Limited, purports to be an independent broker recommending the best energy supply contracts to business customers. The second is BES Utilities a supplier of energy services including gas, electricity and telephone. The reality is that staff of the broker company is misrepresenting the cost by supplying fake benefit figures with the intention, in almost all cases of inducing the customer to enter into expensive and onerous contracts with BES.
Surrounding this various false representations are made such as sales representatives falsely represent that they are calling on behalf of the existing supplier.
The evidence suggests that this is systemic and the lies cannot be due to the individual actions of the sales representatives themselves.
BES supply utilities or energy packages to commercial premises occupied by small and medium size businesses. When new business takes up occupation of premises, or current businesses move to new premises, there is a requirement for utilities (i.e. gas, electricity or telephony) to be supplied. Often outgoing occupants will settle utility bills and leave the premises supplied by the current providers. All businesses will generally research the market themselves to find the best utilities deals available. However, it appears as soon as the businesses occupy the premises and the phone is connected they are contacted ('cold called') by 'allegedly' independent brokerage companies who offer to find them the best utility deals available to them.
The broker companies referred to in this application being Energy Search limited, Commercial Energy limited and Commercial Reduction Services Limited. The brokers then inform the new businesses that the best deals for them are with BES Utilities for the supply of gas, electricity or telephone or a mixture of the three. The brokers then go through what appears to be a written script which forms the contract with BES. The businesses enter into a verbal contract and are told the paperwork will follow usually via email. What they do not tell them is that this is a verbal contract with, legally, no cooling off period and in the case of most of the complainants they are not fully aware of what they have agreed to until they receive the written contract usually the next day via email. It appears that parts of the calls are recorded. The parts that do not appear to be recorded are the initial contact and negotiation with the broker. It appears that the premises 2, 3, 4, 5, 6 and 7 Darwin Court, Hawking Place, Blackpool, Lancashire, FY2 OJN are the call centres were the brokers make their calls and it is in these premises that the calls are recorded and stored on servers.
The brokers pass customer details to the BES Group aggregator, Commercial Power Ltd., who in turn passes them on to BES. BES will then correspond with the customers from their correspondence addresses situated in Darwin Court, Blackpool, Lancashire, FY2 6TX
Allegations
It is alleged that:
1. Brokers speak very quickly during the call and make dishonest statements inducing the business proprietors to enter into the contracts.
2. Brokers purport to be from their current supplier or another broker saying they can no longer supply them, however, BES can.
3. The calls made are unfair to the business as they are told that they are on emergency rates with BES, which they are not, and they must re-sign with them.
4. The brokers are not independent. BES Utilities and associated brokers are one and the same.
5. Brokers inflate rates comparisons with other suppliers and omit to mention additional costs such as minimum usage cost.
6. The brokers make numerous often harassing calls as soon as the new business opens.
7. BES transfer contracts without the knowledge of the customer who is tied into a contract he cannot get out of and never agreed to.
8. Complainants are not fully aware of the terms and conditions of the agreements made due to the speed and forceful nature of the broker's call.
9. Complainants are wrongly told that they have a 'cooling off period' of 14 days or 6 days and agree a contract. When they try to cancel within the cooling off period they find out they cannot and are tied into extended and expensive contracts.
10. Complainants were falsely told that they were on an emergency contract when they weren't.
11. Brokers tell customers they are about to be disconnected when they are not.
12. Contracts are made with employees of the customer businesses who have no authority to enter into contracts on their employer's behalf.
13. The verbal contracts in isolation sounds like a legitimate contract, however, businesses are often coached to answer the questions or are told to just listen and say nothing.
Summary of Complaints
It can be summarised to say witnesses allege that during these calls numerous false representations are made to them in respect of the following for example only and amongst others:
a) The identity of the caller - often brokers impersonate existing suppliers.
b) The unit tariff - often brokers provide fictitious quotes from competitor energy providers favouring BES
c) That the businesses are currently out of contract with suppliers and are paying emergency tariffs at grossly inflated rates.
d) The utility meter has to be registered by law.
e) The meters are not compatible with suppliers other than BES.
f) A 14 day cooling off period exists
g) Omitting information regarding minimum usage tariffs
These are an example of the type of false representations made to the new business in a high pressure manner which result in contracts detrimental to the business requirements. Witnesses complain that once the alleged contract is entered into, BES mis handle complaints and retain supplies fraudulently. This practice results in substantial financial losses to the businesses and in cases have forced closure of the business causing innocent employees to lose employment.
"Whistle Blower" Evidence
A previous employer... [Layla Sakly]...has come forward and made a witness statement...evidence can be summarised as follows
- Commercial Power trade under a number of different names or 'styles' including Commercial Reductions.
- Commercial Power is, allegedly, independent energy brokerage dealing with commercial customers only. It is owned by GOULDING whose best friend is PILLEY who owns BES Utilities.
- For all practical purposes Commercial Power and BES Utilities is one and the same outfit.
- From the outset the true objective of the sales calls would be to pose as Independent advisors when in fact the intention was to sign customers up to expensive contracts with BES.
- An estimated 98% of customers would be steered to contracts with BES.
- Staff would lie to customers and invent quotes in order to induce them into thinking they are on inflated 'out-of-contract' rates with their existing supplier.
- Favoured targets were medium sized shops, cafes, pubs, nightclubs and hairdressers.
- Staff would be given 'scripts' which were constantly updated.
- Staff would ring customers and say there were from non-existent organisations such as 'Meter Registration Services' or 'Energy Search'.
- Energy Search is a trading style for Commercial Power and entirely made up.
- Staff would falsely tell customers that there was a National Database in order to obtain their meter numbers which would then assist them in getting the meter from their existing supplier.
- PILLEY is running the brokerage which is not independent from BES.
- BES made the phone call to customers as if they are from Commercial Reductions so that PILLEY can distance himself from the process."
"POSSIBLE DISRUPTION TO BES CUSTOMERS
Ofgem have provided the following advice in relation to the possible effect on BES customers as a result of the execution of the warrants;
"You asked whether there are any serious concerns from an Ofgem perspective in terms of the company's customers having their supply disrupted in the immediate short term in the event of any planned action on your part.
In the immediate short term, there are no such concerns.
There is a significant risk to the company being able to maintain customer service during any such period of disruption.
There are other possible risks which could possibly occur, but these are not thought to be likely and certainly not on any significant scale.
Ultimately we conclude that there is nothing so significant so as to cause you to curtail your planned action."
"Counter-arguments
16. The applicant expects that, when confronted, the defendants will vigorously deny any allegations of fraud or other wrongdoing. We anticipate that the issues which they might raise in opposition to this application include the following:
a. There must be reasonable grounds to believe that one or more indictable offences have been committed. In the present case, that would necessitate showing that the directors (or otherwise the directing minds of the business) were acting dishonestly.1
b. Even if individual sales staff have made dishonest statements in order to secure sales, it does not automatically follow that this was systemic conduct caused or encouraged by the directors. Likewise, even if one of the businesses was being conducted in a fraudulent manner, it does not automatically follow that all businesses were fraudulent.
1 Because this case involves business-to-business sales, the investigation is focussed on offences of fraud, fraudulent trading and conspiracy. Although many of these were small businesses (including sole traders), as a matter of law consumer protection provisions do not apply.
c. Energy tariffs can be complex, and the best rates are not always available to every customer. There may have been valid reasons why packages were offered when on the face of its other suppliers would have been cheaper.
d. There is nothing per se wrong with a broker promoting a particular supplier. It is only unlawful if it is accompanied by false representations.
e. There is only a single 'whistleblower' statement, and the former employee may simply be exercising a grudge. Although elsewhere she claims to be speaking from direct knowledge of the activities of directors, parts of her statement appear to be based on hearsay.
f. The journalistic investigation provides only a limited snapshot of the conduct of the business, and that was conducted more than three years ago.
g. The subjects cooperated with the investigation by the statutory regulator in 2015, made appropriate admissions and reached an agreed settlement. The adverse findings are not of themselves findings of dishonest conduct, although the applicant submits that they constitute clear evidence of dishonest practices (see for example paras 3.21 and 3.22, and 5.4 to 5.8 of the report).
17. The subjects would no doubt also point out that the premises are in separate ownership/occupation. Although that means that the statutory grounds must be satisfied in each case (including fundamentally the fact that they may hold relevant material and that notice cannot be given) it does not require reasonable grounds to believe that each individual is guilty of dishonesty.
18. All of these matters have been taken into account by the applicant. Nonetheless, it remains satisfied that the statutory conditions are satisfied in this case. This case is still at an investigatory stage and such potential lines of defence are matters which will of course have to be scrutinised.
19. It is acknowledged that even a temporary interference in the operation of the businesses is a significant detriment. The statutory conditions do not of themselves specify a requirement that any interference should be proportionate (although that may be inherent in the 'public interest' test in Para 14(c)). The applicant submits that any requirement of proportionality is satisfied in the present case, in that this is an investigation into allegations of serious and systemic fraud involving serious financial harm to individuals and small businesses. The aggregate gains by the suspects from the alleged fraud would amount to millions of pounds. In devising its search strategy, the applicant has taken reasonable steps to minimise the disruption to the subject businesses."
(i) The note of the hearing
"And we are here to answer any questions that the court may have about the detail of the material. We are also conscious, we were aware of a communication yesterday, indicating that the hope for judicial reading time was not going to be made available. If it means deferring the decision and the court requires reading time post-hearing before reaching a decision, then there is no objection to that course being followed.
JUDGE BROWN: No, no. Well, I will obviously, I just need to go through the document you have provided me with this morning. As is often the wont or as is often the way, I have had to find reading time.
MR. THOMAS: Yes.
JUDGE BROWN: But it was not a satisfactory state of affairs to be given a file yesterday when I was away from the building from lunchtime for the whole of the rest of the day.
MR. THOMAS: Well, I apologise. We would---
JUDGE BROWN: And I had to rejig yesterday morning's list because of it. I mean it is not your personal fault, Mr. Thomas, and I appreciate that these things can happen, but it is in a sense compounded by the fact that I have just been given this document [a reference to Counsel's note]."
"All records and recordings of telephone calls held on computers and servers made by [company name] and all brokers including records and recordings made to customers and/or clients relating to contracts and sales, prospective or substantive.
"All files and correspondence whether by e-mail, letter or otherwise of contracts held made and made between customers and/or clients and [company name] and all brokers "
"Any material recorded on servers accessible from the subject premises.
"All files and correspondence whether by e-mail, letter or otherwise of complaints made by [company name] customers and/or clients "
"All records, details, notes and files held whether on computer or otherwise of the employees of the above named companies "
"All notes held either on computer or otherwise of managers meetings, performance statistics etc."
(j) Execution of the Search Warrants
(1) 6 servers on 5 August 2016;
(2) 3 servers on 10 August 2016;
(3) 1 server on 12 August 2016;
(4) 3 servers on 16 August 2016.
(5) 2 servers on 18 August 2016.
"In total, across all the exhibits submitted by the North West RIT for examination, there was in excess of 53 Terabytes (TB) of storage capacity, which is a huge volume of material. 1 Terabyte is the equivalent of 1,000,000 Megabytes (MB). To illustrate the capacity of a Terabyte, a file containing the full text of Jane Austen's novel 'Pride and Prejudice' is 784 Kilobytes (KB) in size and so it would be possible to store 1,275,510 copies of that file on a 1TB hard drive. According to Barnes & Noble booksellers, that novel has 434 pages and so this would amount to 553,571,340 pages of Pride and Prejudice on a 1TB hard drive. Obviously, the exact amount of material depends on the size and type of the data being stored, but this does give a realistic idea of the potential amount of data per Terabyte of hard drive space."
From the information provided to the Court on an application to the Divisional Court, the quantity of the copied data on the servers of the investigating authorities was described as exceeding 200 million documents and including about 770,000 audio recordings of telephone conversations: see R (on the application of Business Energy Solutions Ltd) v Preston Crown Court [2018] EWHC 1534 (Admin); [2018] 1 WLR 4887 at para. 4.
(k) Charges of criminal offences
(a) Andrew Pilley, Director of BES Utilities and CPL, has been charged with two offences of Fraudulent Trading contrary to section 993 of the Companies Act 2006, one offence of Money Laundering contrary to section 328(1) of the Proceeds of Crime Act 2002, and one offence of Fraud by False Representation contrary to sections 1 and 2 of the Fraud Act 2006.
(b) Michelle Davidson, Director of the BES Utilities and CPL and sister of Mr Pilley, has been charged with two offences of Fraudulent Trading contrary to section 993 of the Companies Act 2006 and one offence of Money Laundering contrary to section 328(1) of the Proceeds of Crime Act 2002.
(c) Lee Qualter (aka Lee Goulding) is the Director of Energy Search Limited ("ES Ltd") and of Commercial Energy Limited (dissolved on 4 August 2015) and was previously director of Commercial Reduction Services Limited (dissolved on 6 February 2018). He has been charged with one offence of Fraudulent Trading contrary to section 993 of the Companies Act 2006.
(d) Joel Chapman is employed by BES as the Head of Regulation and Compliance. This role also includes an involvement with CPL. He has been charged with two offences of Fraud by False Representation contrary to sections 1 and 2 of the Fraud Act 2006. One element of the charges against Mr Chapman arises from his involvement in the complaint made by Mr and Mrs Maybury, who are witnesses in these proceedings. It is alleged that Mr Chapman knew that the audio recording of the relevant telephone call was available and that it supported their complaint. Mr Chapman lied and concealed the existence of this recording from Mr and Mrs Maybury.
V General observations
(a) General observations use of CP materials
(1) The investigation arises out of an allegedly fraudulent operation involving lies and deception of sales staff within the broker companies in which alleged fraudulent representations made in front-end calls became clearer, according to the defendant, with the material and recordings seized during the warrants.
(2) On the Defendant's positive case, the broker companies purported to be independent but the investigation, which was continuing, had indicated matters showing that there were a large number of items which pointed to the brokers not being independent.
(3) The matters being investigated were, it is alleged by the Defendant, of systemic criminal dishonesty and that there were reasonable grounds to believe that had the nature and extent of the investigation been disclosed or Production Orders had been sought, the evidence and the material would have been destroyed and withheld: e.g. see paras. 8 and 16(a-h) of the Amended Defence.
"In my judgment, the attempts to limit the ambit of the case to exclude the CP materials must fail. There is an overlap of the issues on the pleadings. There is an overlap on the evidence. The claimants have chosen to express their case broadly and no doubt for good reason. I have made my findings in respect of the pleadings as above. I do not accept the attempts to characterise the pleadings in the narrow manner submitted by the claimants. I have referred also to parts of the witness statements. The claimants having chosen to advance their case in a broad way, the defendant is entitled to deploy all relevant arguments and materials to meet that case. Otherwise the case will be tried on a false basis where the claimants have been expansive and the defendant would be unfairly restricted.
The fact that the claimants could have cast the case in a narrower way is irrelevant: they have chosen to cast their evidence, especially that of Mr Pilley, broadly, such that the defendant is entitled to test the evidence. In respect of the alternative of the claimants of abandoning parts of their case, that would not be sensible or just. The case cannot fairly be sliced up in this way: this would change its complexion. The witness statements have been prepared on this basis and the case prepared for trial. It may all work to the benefit of the claimants because it may appear that the way in which it is put about the independence of the brokers and the absence of reasonable and probable cause will enable the claimants to prevail. Alternatively it may work to the benefit of the defendant who may in defending such a case have a broader basis to defend."
(b) General observations disclosure issues
(i) Disclosure from the disclosure in the criminal proceedings
(1) the Claimants' submissions dated 16 June 2022 (13 pages);
(2) the Defendant's submission dated 27 June 2022 (12 pages);
(3) the Claimants' reply submission dated 4 July 2022 (13 pages).
(1) the Defendant's solicitors dated 6 July 2022 (3 pages);
(2) the Claimants' solicitors dated 8 July 2022 (4 pages).
(1) A witness statement of Debra Vaughan taken by the Defendant for the criminal proceedings and in particular a reference to "emergency rates" by her;
(2) A document containing an analysis of the witness statement of the whistleblower Leila Sakly as against the available transcripts;
(3) An analysis of the Citizens Advice Consumer Services ('CACS') prepared by an unknown employee of the Defendant dated 9 March 2018 about contact or linkage between complainants and Mr Scrivener, Mr Mooney and Mr Bourne;
(4) Emails from the Utilities Intermediaries Association ('UIA') between March 2015 and May 2016 said to evidence influence of the UIA on the Lancashire Trading Standards before the matter passed to the Defendant;
(5) Attachments to an email of Mr Bourne sent by him to Ms Christine Swan on 28 April 2015 who was a complainant in the application for Search Warrants;
(6) A text message between Kelly Bailey and Mr Dinn sent on 26 June 2017;
(7) A further transcript of Ms Whitfield, a complainant who gave oral evidence in the trial.
(a) Debra Vaughan witness statement.
(b) Ms Sakly's witness statement
(c) The CACS analysis
(d) UIA emails
(e) Attachments to the Bourne email
(f) Text messages between Ms Bailey and Mr Dinn
(g) Further transcript of Ms Whitfield
(ii) Conclusions
(1) there has been something of an information overload in these post-trial submissions by both sides with a failure to discern which are the most important points to emphasise and having regard to the stage at which these submissions are made;
(2) the Defendant has not shown that they are prejudiced by the lateness of these points in that its answer to the desire to admit the same is that there would be no injustice to the Claimants if they were not admitted because they raise points of no significance;
(3) the Claimants have not sought to contend that if the documents were admitted that it would be necessary to have further oral evidence, and despite my concern about the over-long submissions, they are not such that they cannot be managed into the case alongside the much longer submissions received at the close of the oral hearing;
(4) as a matter of case management and in accordance with the overriding objective, I shall admit the documents and receive the submissions of the parties in respect of the same.
(1) there is nothing in the submissions which leads the Court to consider that there are fundamental criticisms about the disclosure such as to give rise to inferences about what else might not have been disclosed. In general terms, it is not accepted that there has been a serious failure in the duties of the Defendant's disclosure. It is not necessary to go through each and every allegation in this regard. I come to that conclusion taking into account the rejection elsewhere in this judgment of the trenchant criticisms made by the Claimants of the Defendant's disclosure. On the contrary, the matters of criticism stand to be appraised in the context of the numerous documents which have been disclosed, and how this has generally stood up to what, demonstrably by the very detailed closing submissions and these additional submissions, has been a very close scrutiny.
(2) In my judgment, the specific points which have been addressed at this stage are generally not telling in the sense of raising questions about the adequacy of the disclosure of the Defendant. It is significant that five out of the seven categories of documents fall outside the defined period for search terms by agreement of the parties. The Claimants have been inclined where they find something which has gone wrong to draw inferences which are not justified e.g. the non-preservation of the tape of the interview with Ms Sakly or the missing parts of Mr Bourne's emails or not preserving the phone of Mr Dinn against whom there was no allegation of misfeasance.
(1) There is nothing sinister in failing to provide this report. The reference to emergency rates by Debra Vaughan is something which can be factored into the analysis of the expert evidence. It assists the Claimants to the extent that the term was used, but it also reinforces the point of the witnesses about how the term 'emergency rates' was 'scary language'.
(2) There was no reason to alight upon the analysis of the competing notes about Ms Sakly's statement. The Claimants could have produced such an analysis of the differences. There has not been a qualitative compare and contrast analysis, and the broad judgment is that there are inevitably differences between three different versions of notes, but they do not invalidate the summary of what Ms Sakly said as related in the application for the Search Warrants.
(3) As regards the CACS analysis, there is nothing particularly revealing about this document. It does not descend into the nature and extent of the links or contact with the complainants. This was identified elsewhere in the schedule in respect of some of the complainants and especially Mr and Mrs Maybury. There was the opportunity to cross examine both of them about the contact which they had. Having heard them give evidence, I am satisfied that their account was because of their own experiences and not because of the influence of any other person.
(4) There is nothing qualitative about the UIA emails. It does not indicate that there were communications of a kind which were likely to have any influence in the nature of the investigation or in the decisions to be taken. These communications do not seem significant.
(5) There is nothing significant about the differences between the earlier and the final draft of the statement of Ms Swan. The inferences which the Claimants seek to draw are in my judgment speculative and not warranted by the nature of the changes. It is not unreasonable to treat the earlier draft as irrelevant, and it does not become more relevant because at a later stage the Claimants seek to attach such significance to the same.
(6) As regards the text messages between Ms Bailey and Mr Dinn, the failure to preserve the telephone of Mr Dinn was because he has not been the subject of allegations of misfeasance. There is no reason to infer that there was anything sinister about this. There is no reason to infer that there would have been something significant in other messages. There is nothing significant in the particular message which has been preserved.
(7) The further transcript of Ms Whitfield from 2009 is not in any way significant. It was well outside the agreed period. It does not become relevant because there had been disclosure of calls in 2012. In any event, it could have been provided by Commercial Power if it was of importance.
(c) General observations witnesses not called
"In Wisniewski v Central Manchester HA [1998] PIQR P324; [1998] Lloyd's Rep Med 223, Brooke LJ set out the principles as follows:
"(1) In certain circumstances a court may be entitled to draw adverse inferences from the absence or silence of a witness who might be expected to have material evidence to give on an issue in an action.
(2) If a court is willing to draw such inferences they may go to strengthen the evidence adduced on that issue by the other party or to weaken the evidence, if any, adduced by the party who might reasonably have been expected to call the witness.
(3) There must, however, have been some evidence, however weak, adduced by the former on the matter in question before the court is entitled to draw the desired inference: in other words, there must be a case to answer on that issue.
(4) If the reason for the witness's absence or silence satisfies the court then no such adverse inference may be drawn. If, on the other hand, there is some credible explanation given, even if it is not wholly satisfactory, the potentially detrimental effect of his/her absence or silence may be reduced or nullified."
However, as Ryder LJ made clear in Manzi v King's College Hospital NHS Foundation Trust [2018] EWCA Civ 1882; [2018] Med LR 552 at [30].
"Wisniewski is not authority for the proposition that there is an obligation to draw an adverse inference where the four principles are engaged. As the first principle adequately makes plain, there is a discretion i.e. 'the court is entitled to draw adverse inferences'".
In Magdeev v Tsvetkov [2020] EWHC 887 (Comm) at [154], Cockerill J said:
"(i) This evidential 'rule' is, as I have indicated above, a fairly narrow one , the drawing of such inferences is not something to be lightly undertaken. (ii) Where a party relies on it, it is necessary for it to set out clearly (i) the point on which the inference is sought (ii) the reason why it is said that the 'missing' witness would have material evidence to give on that issue and (iii) why it is said that the party seeking to have the inference drawn has itself adduced relevant evidence on that issue. (iii) The court then has a discretion and will exercise it not just in the light of those principles, but also in the light of: (a) the overriding objective; and (b) an understanding that it arises against the background of an evidential world which shiftsboth as to burden and as to the development of the caseduring trial."
(1) The only allegation of misfeasance was made against Mr Bourne and none of the other officers. Mr Bourne was called, and he was the subject of cross-examination for more than 2 days. There would have been scope for an adverse inference if Mr Bourne had not been called by the Defendant, absent a very good explanation.
(2) There were numerous witnesses who were called for the Defendant in addition to Mr Bourne. The evidence of Mr Rees in particular was not as marginal as is now suggested. Indeed, there was about a half of a day of cross-examination directed to him. Mr Pierce was called at the end of the evidence, and his evidence was short. However there were many days of cross-examination of the witnesses for the Defendant over Days 8-15, that is the large majority of the time of the trial. There were many witnesses who were called including in addition to Mr Bourne, 4 complainants (including Mr and Mrs Maybury) whose evidence lasted almost 3 days, Mr Childs who oversaw the electronic material after the Search Warrants had been executed (and who was cross-examined for the entirety of Day 14 and for half of Day 15) and PC Griffin of the Lancashire Police (who was called for about 2 hours on Day 12).
(3) The events occurred years before the trial such that the scope for recollection of witnesses was less than could be gleaned from contemporaneous documents. That is not to discount oral evidence, but it is a factor in reducing the impact of the submission that witnesses were being shielded.
VI Expert evidence
(1) The Defendant was guilty of non-disclosure by not engaging expert evidence for the purpose of the application for the Search Warrants. The Claimants rely on the case of R (Rawlinson and Hunter Trustees) [2013] 1 WLR 1634 at [88], [97] and [175] for the proposition that it is a part of the high duty expected of persons applying for a search warrant to place before the Court suitable expert evidence.
(2) The expert evidence called by them, namely Mr Evans, was to be preferred to that of Ms Frerk. Mr Evans was active on the ground and had more relevant experience than someone who had spent most of her professional life working for the regulator.
(3) That evidence was to the effect that:
(i) there was nothing sinister in the use of the expression "emergency rates": it was commonplace in the industry to refer to non-contract rates;
(ii) there was nothing wrong in there being no cooling off period: there was no requirement to have a cooling off period, which point was conceded in the expert evidence;
(iii) there was nothing wrong in the tapes of the initial non-contractual conversations not being recorded there was no requirement for this.
(4) If that expert evidence had been sought, it would have cast a different light on the nature of the alleged pre-contract representations and the Court might have treated the case of the Claimants in a very different way.
(1) The obligation to assist the Court with expert evidence is derived from the case of Rawlinson. That was a case of highly complex financial transactions where the applicant for the search warrants was dependent on highly specialist information from Grant Thornton and did not have the internal resources to provide evidence to explain it. In the instant case, the information is not complex and did not require expert evidence to help explain to the Court the particular terms and practices of the industry.
(2) I accept the answer provided by DC Griffin when the need for expert evidence was put to him, and he replied that expert evidence was not required to prove that someone was 'conned' in this case. It is a case about deceit which did not require expert assistance.
(3) In my judgment, the expert evidence was of very limited assistance to the court in the context of the issues in this case. It is important to note that the nature of the fraud was far wider than the subjects on which it is said that expert evidence should have been sought. The deceit was about representations being made by so-called independent brokers purporting to give independent advice when in fact they were controlled by or agents of BES or otherwise not independent of BES. Further, the representations about the information about what BES had to offer were impugned e.g. the provision of false rate comparisons, the claim that the brokers had the best rates available, that the contract had to be for 4-5 years, that the existing supplier could no longer supply them, but BES could.
(4) If in fact expert evidence had been sought, then neither would, nor might it have made any difference to the Court. Even if the matters relied upon by the Defendant's expert evidence had been before the Court, this would not have provided an answer to false representations as described above in high pressure selling. Whether used commonly or rarely, the term "emergency rates" would obviously instil fear in the consumer and is to be seen in the context of high-pressure tactics. In my judgment, seen in this context, the expert evidence neither did nor might it have invalidated the evidence provided to the Court upon the application for the Search Warrants.
(1) Mr Evans failed to declare his connections with BES. Within the last 6-7 years, his company had provided advisory services to BES. He was chair/legal secretary of an organisation in the industry of which BES had membership and Mr Chapman had been a diversity officer. Ms Frerk was entirely independent. I take into account the fact she had not had direct experience of doing commercial work or working with brokers.
(2) Mr Evans was unable to support his statement about the common use of the expression "emergency rates" by providing formal supplier documents that are publicly available containing the use of the expression. He accepted that it was not regulatory term: see T16/43-44. If it were used as part of unreasonable pressure in the course of cold calling, this would not legitimise its use. The statement of Ms Debra Vaughan of the office of the Ombudsman was to the effect that the expression was used, albeit that this is not supported by any formal document with such language. In any event, even if it were used, Ms Vaughan referred to the expression as being "scary language" which adds to the concern about its use. It provides indirect support to the statement of Ms Frerk that "the use of the term "emergency rates" creates a false sense of urgency, putting the customer under pressure to enter a contract, in particular in the context of a cold call."
VII Misfeasance in public office
(1) The nature of the tort of misfeasance in public office
(1) The defendant is a public officer;
(2) The defendant was exercising powers as a public officer;
(3) the defendant either acted with targeted malice or untargeted malice;
(4) an act or omission of the defendant caused loss to the Claimant.
"The relevant act (or omission, in the sense described) must be unlawful. This may arise from a straightforward breach of the relevant statutory provisions or from acting in excess of the powers granted or for an improper purpose. Here again the test is the same as or similar to that used in judicial review.
The official concerned must be shown not to have had an honest belief that he was acting lawfully; this is sometimes referred to as not having acted in good faith. In the Mengel case, at p 546, the expression honest attempt is used. Another way of putting it is that he must be shown either to have known that he was acting unlawfully or to have wilfully disregarded the risk that his act was unlawful. This requirement is therefore one which applies to the state of mind of the official concerning the lawfulness of his act and covers both a conscious and a subjectively reckless state of mind, either of which could be described as bad faith or dishonest.
The next requirement also relates to the official's state of mind but with regard to the effect of his act upon other people. It has three limbs which are alternatives and any one of which suffices.
First, there is what has been called "targeted malice". Here the official does the act intentionally with the purpose of causing loss to the plaintiff, being a person who is at the time identified or identifiable. This limb does not call for explanation. The specific purpose of causing loss to a particular person is extremely likely to be consistent only with the official not having an honest belief that he was exercising the relevant power lawfully. If the loss is inflicted intentionally, there is no problem in allowing a remedy to the person so injured.
Secondly, there is what is sometimes called "untargeted malice". Here the official does the act intentionally being aware that it will in the ordinary course directly cause loss to the plaintiff or an identifiable class to which the plaintiff belongs. The element of knowledge is an actual awareness but is not the knowledge of an existing fact or an inevitable certainty. It relates to a result which has yet to occur. It is the awareness that a certain consequence will follow as a result of the act unless something out of the ordinary intervenes. The act is not done with the intention or purpose of causing such a loss but is an unlawful act which is intentionally done for a different purpose notwithstanding that the official is aware that such injury will, in the ordinary course, be one of the consequences: Garrett v Attorney General [1997] 2 NZLR 332 , 349-350.
Thirdly there is reckless untargeted malice. The official does the act intentionally being aware that it risks directly causing loss to the plaintiff or an identifiable class to which the plaintiff belongs and the official wilfully disregards that risk. What the official is here aware of is that there is a risk of loss involved in the intended act. His recklessness arises because he chooses wilfully to disregard that risk."
"Recklessness is used, in this context, in a subjective sense. That is, it is essential to find that the defendant appreciated the possibility that the action was unlawful but acted anyway (and is to be contrasted with objective recklessness, where a person fails, recklessly, to appreciate the risk of unlawfulness at all)" (at [666(3)]).
(i) An unlawful act is required for both limbs of the tort
"The rationale underlying the first limb is straightforward. Every power granted to a public official is granted for a public purpose. For him to exercise it for his own private purposes, whether out of spite, malice, revenge, or merely self-advancement, is an abuse of the power. It is immaterial in such a case whether the official exceeds his powers or acts according to the letter of the power: see Jones v Swansea City Council [1990] 1 WLR 1453. His deliberate use of the power of his office to injure the plaintiff takes his conduct outside the power, constitutes an abuse of the power, and satisfies any possible requirements of proximity and causation."
(ii) Must there be knowledge of unlawfulness for the purpose of targeted malice?
(iii) The nature of intention to injure for targeted malice
(iv) Untargeted malice: the unlawfulness relied upon by the Claimants
"476. To establish that Mr Bourne committed the remaining elements of the tort in issue at this trial[1], and following the authoritative statement of the law by Lord Steyn in Three Rivers DC v Bank of England (No.3) [2003] 2 AC 1 at 191-196, the Claimants need to demonstrate:
476.1 that Mr Bourne acted either:
476.1.1 lawfully, but with the intention of harming the Claimants as one of his purposes (targeted malice); or
476.1.2 unlawfully knowing or being subjectively reckless as to such unlawfulness, and either knowing that harm was likely to be occasioned or of being subjectively reckless to the same (untargeted malice).
476.2 subjective recklessness in this context means reckless indifference to legality and the likelihood of harm which will be established if Mr Bourne was aware of the possibility that his actions were unlawful and that harm was likely but acted anyway."
(1) A common law public law duty only to disclose information in the course of performing public duties where reasonably required, and the minimum necessary, for the purpose of performing those duties to persons who have a reasonable and legitimate need for such information: see AB v Chief Constable of North Wales Police ex parte Thorpe per [1999] QB 396 referred to below;
(2) a duty only to disclose information concerning the Claimants, obtained in the course of the investigation, in respect of which the Claimants had a reasonable expectation of privacy, for a reason permitted by Article 8(2) of the Convention to a necessary and proportionate extent. The Claimants say that this included the fact of the investigation, and information acquired in the course of it suspicions held about them, the basis for such suspicions and of the Defendant's intention to apply for Search Warrants: see ZXC v Bloomberg [2019] EWHC 970 (QB) per Nicklin J esp. at paras. 119, 122 and in the Court of Appeal [2020] EWCA Civ 61 per Simon LJ upholding Nicklin J, and especially at para. 82;
(3) a duty to keep confidential information acquired in confidence and only to disclose it to the minimum extent necessary when the public interest in disclosure was more important than the duty of confidence: see Marcel v The Commissioner of the Police for the Metropolis [1992] Ch 225 per Sir Christopher Slade at p.262C-265A and Omers Administration Corp v Tesco plc [2019] EWHC 109 (Ch) and Crook v The Chief Constable of Essex Police [2015] EWHC 988 (QBD) at [37, 41 and 54];
(4) a duty not to delegate powers unless authorised, and when authorised only to do so to those who are competent and have the requisite degree of impartiality: De Smith's Judicial Review (8th ed.) at 5.159 [Auth/6/105]; Noon v Matthews [2014] EWHC 4330 (Admin) at [25]-[26]; R (Chief Constable of Greater Manchester) v Lainton [2000] ICR 1324 at [23]-[25];
(5) a common law duty, also part of the requirements of good public administration, to act impartially, not to assist a campaign to injure the Claimants and not to provoke complaints beyond appropriately inviting customers to make a complaint; and
(6) a duty to pursue all reasonable lines of inquiry whether these point towards or away from a suspect, and to take reasonable steps to check information to be relied upon for a search warrant is accurate, recent and not provided maliciously or irresponsibly.
"When, in the course of performing its public duties, a public body (such as a police force) comes into possession of information relating to a member of the public, being information not generally available and potentially damaging to that member of the public if disclosed, the body ought not to disclose such information save for the purpose of and to the extent necessary for performance of its public duty or enabling some other public body to perform its public duty. This principle would not prevent the police making factual statements concerning police operations, even if such statements involved a report that an individual had been arrested or charged, but it would prevent the disclosure of damaging information about individuals acquired by the police in the course of their operations unless there was a specific public justification for such disclosure. This principle does not in my view rest on the existence of a duty of confidence owed by the public body to the member of the public, although it might well be that such a duty of confidence might in certain circumstances arise. The principle, as I think, rests on a fundamental rule of good public administration, which the law must recognise and if necessary enforce.
It is, however, plain that the general rule against disclosure is not absolute. The police have a job to do. That is why they exist. In Glasbrook Brothers Ltd. v. Glamorgan County Council [1925] AC 270 , 277, Viscount Cave L.C. said:
"No doubt there is an absolute and unconditional obligation binding the police authorities to take all steps which appear to them to be necessary for keeping the peace, for preventing crime, or for protecting property from criminal injury; . . ."
Lord Parker C.J. spoke to similar effect in Rice v. Connolly [1966] 2 Q.B. 414 , 419:
"It is also in my judgment clear that it is part of the obligations and duties of a police constable to take all steps which appear to him necessary for keeping the peace, for preventing crime or for protecting property from criminal injury. There is no exhaustive definition of the powers and obligations of the police, but they are at least those, and they would further include the duty to detect crime and to bring an offender to justice."
It seems to me to follow that if the police, having obtained information about an individual which it would be damaging to that individual to disclose, and which should not be disclosed without some public justification, consider in the exercise of a careful and bona fide judgment that it is desirable or necessary in the public interest to make disclosure, whether for the purpose of preventing crime or alerting members of the public to an apprehended danger, it is proper for them to make such limited disclosure as is judged necessary to achieve that purpose [emphasis added]."
(2) The Claimants' case about Mr Bourne
(3) Observations about Mr Bourne as a witness
(1) "Q. You weren't in charge of anyone, were you? A. No, I wasn't" [T10/ 32/14 15] "Q. [ ] according to your statement you were just a very junior employee? A. Yes. Q. And you didn't supervise any other investigator? No, as I say, the hierarchy was, above me was Mr Williams and above him was Mr Dinn." [T10/33:6 11]
(2) "I was taken on in the role of statement taker. [ ] I was merely taken on for three months to go and take statements round the country." [T10 /75/8 11]
(3) "Q. When you go and see these people -- I'm sorry, you can put F9 away now. I suggested to you that you hadn't followed reasonable lines of enquiry and I suggest to you that you had an agenda when you were meeting these witnesses, which was to obtain witnesses which would be damaging to BES. That is true, isn't it? A. My goal was to take statements from the witnesses. They had their own agenda, I suppose you could call it. That's because they believed they had been the subject of a fraud by BES. I didn't have to put words in their mouth. I didn't have to encourage them. They were more than happy to make statements". [T10/129/25 130/5]
(4) "Q. Did you send out any of those questionnaires of your own volition? A. I did not, no. Q. Who decided who should be in receipt of questionnaires? A. It would be Mr Dinn or Mr Williams. Q. You took a number of statements. Did you decide who to take statements from? A. No, the questionnaires had come back. We'd discuss it with Mr Williams and Mr Dinn and then myself and Mr Noble were tasked to contact them and go out on the road and obtain the statements." [T11/120/2 12]
(4) Allegations that Mr Bourne was dishonest
(iii) Third example: Mr Bourne's use of a questionnaire
(v) Mr Bourne's understanding of his duties
(vi) Admissions concerning Mr Bourne's conduct
(5) Initial steps taken by Mr Bourne
" to show there is a systematic Fraud going on. I have no doubt that the 'brokers' and BES are one and the same even though they are on the face of it separate entities. We are intending to obtain around 40 witnesses to build a compelling case against this Cabal".
(1) "That's why these people have made statements, I believe. They believed they were victims of fraud before I ever spoke to them. That's why they came forward to Trading Standards. That's why they came forward to Ofgem. That is why they came forward to, you know, us. They believed -- I didn't put it in their mind, they already believed they were victims of fraud" [T10/31/25 T10/32/6].
(2) "as a trading -- as a police officer I wouldn't have done it, but as -- working for the Trading Standards I did try and help a little bit people who are suffering terrible financial hardships, relationships are breaking down, marriages were threatened "I felt terrible ... empathy for these people, but I didn't set up a campaign, I didn't set up a blog. Didn't do anything like that" [T11/29/8 12 and 21-23].
(3) When asked why he was helping Ms Foster, he said the following: ""Q. [ ] What are you doing, Mr Bourne? Why are you giving this advice to Ms Foster? A. Because I felt genuinely sorry for her and I was trying to acknowledge the role of the Trading Standards officer. That's what Trading Standards, I believe, are there to do." [T11/34/22 T11/35/2].
(1) "Q. You knew perfectly well you should never have been saying these things at this early stage of the investigation to a member of the public, should you? A. With hindsight, you're right." [T10 / 19:24 20:2] / "[ ] with hindsight maybe I should not have been as open and honest with people." [T10/20/25 21/1]
(2) "Q. [ ] you knew perfectly well therefore what you were doing was completely wrong and contrary to your obligations, didn't you? A. No, I'm sorry, I didn't, I thought I was just keeping an informant, sorry, a complainant up to date and online." [T11/88/2 6]
(3) "A. Again, I'm sorry, it was oversharing. I was keeping him, as one of our complainants, keeping him on our side, up to date. Q. Then you go on to give some details about the meeting with counsel. How could that be appropriate? A. Looking at it now, it's not appropriate. Q. It couldn't have been appropriate then either, could it? You must have known that? A. Well, if I'd known it, sir, I wouldn't have sent it." [T11/87/4 12]
(6) Mr Bourne's initial dealings with Mr Scrivener
"The statement gathering phase should start in about four weeks and will take my team another four weeks as the complainants live as far apart as Glasgow, Exeter, Stockton on Tees and Kent. If you don't hear anything for a week or two don't worry, it's not going away this time."
"If you think that is panicking wait until the Police Vans arrive! We are setting off this morning to obtain the statements it will take two or three weeks I am doing the Northern/Scottish/Newcastle ones, and my colleagues Paul Williams and Rob Scrannage are heading south."
(1) "Q [ ] Why are you reporting back to Scrivener? A. Because Mr Scrivener, who is equivalent of an informant I would describe him, normally in the police I would have registered as an informer, but as far as I'm aware Trading Standards doesn't have like an informant handling department, but yes, he was passing on good positive lines of enquiry." [T10/64/14 20]
(2) "Why are you giving him all this detail about your investigation? A. Partly we have to keep him, the flow of any information coming through. When you run a handler, handle an informant, you have to reward them somehow, whether it is monetary or getting a script done for the judge if there are criminal activities. But it can't be a one-sided street with an informant." [T10/65/19 T10/66/1]
(3) "Q. So you are continuing to volunteer information to him? A. Yes, because as I say, I'm still trying to keep him on side. Q. Why do you have to give him information to keep him on side? A. Because that's what you do with informants: you have to give them something. Q. And why do you have to keep him on side anyway? A. Just to get potential leads of enquiry." [T11/ 83/17 25].
(7) Other communications with Mr Scrivener
"it would be proceeds of crime but for 500K I would take out the problem with a .338 Lapua round. Dolphin rifles (class f) do a nice one! Accurate 1,000 yards plus. Two good statements yesterday from Hebden Bridge, Yorkshire."
(8) Contact with Mr Scrivener after advice of Mr Williams to take a step back
"I had a meeting with Kelly [Bailey] on Friday. Very very interesting. It has filled some intelligence gaps and confirmed what we already know. I am off to see the Mayburys on Wednesday. Plus a Lady who's Aquarium business went bust with the help of BES."
(1) In an email to Mr Bourne sent at 10:11, Mr Scrivener told Mr Bourne that Fieldfisher wanted to know "exactly what this evidence is I can't tell them". Mr Bourne replied at 11:24 saying:
"Hi Neil, I can't give any advice on ... I'm not
a lawyer. As someone involved in the investigation
I have to keep an open mind to both sides. That way
I can't be accused of being prejudiced. It is a pity
that this thing can't be put off until Ofgem report
which is highly unlikely until we do our investigation."
(2) Mr Scrivener responded at 11:28 replied saying "I've put him on notice that I can't respond until the prohibition on info I have is lifted". In a later email, (12:09) Mr Bourne informed Mr Scrivener that the search warrants would be executed about the beginning or middle of April. Mr Scrivener said that he had "got his teeth" into another "all star witness that would be invaluable for your investigation". Mr Bourne replied, stating:
"Yes, the more witnesses the better, when we go in it will be a co-ordinated strike on all the premises simultaneously and anyone who as much as touches a key board will be arrested for obstruct[ing] police. If we have the staff all the home addressees will be hit at the same time. Please try and get the new witnesses details, but as you say keep all details of our investigation out of plain site."
(3) Mr Bourne had further communications with Mr Scrivener in which he said that there was nothing which would compromise the investigation. Within an email chain on 18 March 2015, Mr Bourne informed Mr Scrivener that statements had been obtained from Mothcrafts (Didy Ward and Dorcas Bray) and The Wherry Public House (Alice and Bradley Weemes). Mr and Mrs Weemes had been introduced to Mr Bourne by Mr Scrivener on 2 March 2015 and were among the 63 statements of complaints to which reference was made in the Search Warrants application. So were the Mothcrafts' complainants. The Claimants criticise Mr Bourne for asking Mrs Weemes to complete her statement by describing: "what effect the BES Utilities deception has had upon the Business, and your selves as new owners of a business. I don't just mean financial it could be any upset or loss of confidence" (email 6 March 2015).
(1) "[Mr Scrivener] has given me information. He's certainly not told me what to do. I would have to run this past my superior officers before I commenced any of that." [T10/61:15 17] "If you're trying to suggest that Mr Scrivener is controlling me in any way I'm afraid you're wrong, sir." [T10/64:4 - 5]
(2) Q. And what I suggest also happened is that you, having seen all of that, you then were quite happy to encourage them in their campaign. You were happy to reinforce their thinking, weren't you. A. I think their minds were pretty much set up what they were doing. I had no reason to encourage them. They seemed to be getting on with what they were doing without any encouragement from me." [T11/27:15 28:9]
(3) Q. . And you were happy to assist Mr Scrivener and Mr Mooney in their campaign to bring BES down, weren't you? A. No, absolutely not. Q. That is what they were about, weren't they? A. Yeah, they -- they had their own reasons for doing what they were doing. I was not part of that." [T11/ 57:15 58:2]
(9) Alleged delegation of investigative role
(1) "Q. Was that his function, to be going and getting witness details for you? A. Well. Q. He's not a trading standards officer? A. No, but we can't approach Ben Jones because we don't know what his -- if he still has connection with BES, so if we approach Ben Jones directly and his loyalties lay with BES, he could tell BES and the job would be blown wide. But if he made an informal one to see if he's willing to talk to us, I really don't see the harm in that." [T11/75/7 17]
(2) "he was in contact with him already, it would make more sense for him to approach Ben Jones and see if he'd be interested in providing us with information rather than us going directly to him which would have potentially blown the operation." [T11/76/17 21] / "I merely asked him to -- if he'd ask him if he wanted to talk to us." [T11/78/20 21] / "All I asked him to do was to approach him to see if he's willing to speak to us. No more no less." [T11/79/15 16]
(10) Mr Bourne's interactions with customers submitting Olly Forms
(11) Mr Bourne's alleged suppression of evidence
"I have left off all the dealing with the Ombudsman and a lot of correspondence with BES as this is what we call unused material. What we are interested in was the criminality when the deception took place and she was tricked in to joining BES by the "independent" broker".
(12) Mr Bourne's ongoing relationship with Mr Scrivener
(13) Mr Bourne's relationship with Ms Bailey
(14) Mr Bourne's influence on Search Warrant application statements
(1) complaints which were the subject of the investigation;
(2) false representations which led to the witnesses signing up with the Claimants;
(3) cover up of the initial representations made;
(4) close connections between the brokers and the suppliers such that there is an inference that the brokers act in tandem with or for the suppliers.
(1) the evidence of the witnesses was thoroughly unsatisfactory and did not bear out their complaints;
(2) their evidence about false representations was riddled with contradiction and/or unexplained unsatisfactory features;
(3) they were acting in cahoots with campaigners in particular such that their evidence could not be treated as independent or reliable;
(4) in reality, they did not like the product and wished to get out of the relationship without a legal basis and to that end made unreasonable demands which could not be substantiated;
(5) Mr Bourne was so closely connected with the campaign that he was at the heart of procuring statements which were unreliable and self-serving and the making of demands of complainants which had no reasonable basis.
(1) he did not put words into the mouths of the witnesses;
(2) he gave them the opportunity to put their side of the story;
(3) he wrote out or procured his colleague (Mr Noble) to write out their accounts;
(4) he gave them the opportunity to make such corrections which they wished so that they should be content with their statements comprising their testimony.
(1) the evidence of the way in which Mr Bourne took statements from the complainants;
(2) an appraisal of the evidence of the complainants.
(15) The way in which Mr Bourne took statements from the complainants
(i) Mr Maybury and Mrs Maybury
(1) "[Mr Bourne] was very professional throughout. He asked us for our version of events, which is what we told him. I think he may have clarified one or two points along the way. [ ] He was interested in our story. I think the financial claim wasn't a major concern of his. I think it was more to do with how we'd been conned in the first place." [T9/ 114/23 115/6]
(2) "Q. And if we just go back to the position with Mr Bourne, if I may. When you had contact with him I suggest to you it must have been apparent to you that he disliked BES as much as you did, didn't he? A. He certainly didn't give me that impression. He was -- as I've said, he was professional throughout." [T9/143:15 20]
(3) "Q. So Mr Bourne told you about the fact that they were going to be going off to get a search warrant, did he? A. He didn't say a search warrant. He said they will be taking the door off its hinges, as he put it. Q. I suggest to you this must have been discussed before, when you met him. A. Not that I recall, no -- as I say. Q. Otherwise you wouldn't know what he was talking about? A. I think anybody would assume that that's what they meant by his comments. As I say, when he took our witness statement and visited us at our guest house there was no mention of warrants and executing them at the time." [T9/118/13 24]
(4) "A. [Mr Bourne] said that they were -- I think his words were along the lines of: we're meeting a lot of people across the length and breadth of the country. Q. And did he give you his view about the claims or complaints? A. Not at all. As I say, he was professional throughout. Q. What did he say about your complaint? A. Nothing, other than verifying us, what our situation was, how we'd come to be involved with BES. As I say, he was professional throughout. He didn't try and put any words into our mouths. He didn't try and lead us down any particular path as to what we should include in our evidence." [T9/119:5 17]
(ii) Ms Whitfield
"A. He didn't ask me any questions. He basically said, I want you to tell me exactly what happened and I told him exactly what happened. He wrote it down. I read it. I read every single part of it right to the end. Agreed with it, signed it and dated it." [T12/130/9 - 13]
" A. I actually sat in the office, in my office and obviously we're all sat together and he says, right, I want you to say in your own words exactly what happened. I sat there explained in my own words exactly what happened. He wrote it down. I read through it. Made sure -- yes, yes, that's correct. Signed it, dated it and that was it" [T12/145:4 16]
(iii) Mr McMichael:
"Q. Can you describe how Mr Bourne behaved during your statement-taking process? A. Courteous, professional, well adjusted chap visiting the office to take a statement. Q. Did anything that he said or did that day cause you any concern? A. No. [T13/69/22-70:3]"
(16) Appraisal of the evidence of the complainants
(i) Mrs Maybury and Mr Maybury
(1) There was a contradiction in that in respect of the front-end call with the broker, Mrs Maybury confirmed in her oral evidence that she had not been told that she was entering into a fixed rate contract [T8/103/6-8] yet her statement of 3 March 2015 taken by Mr Bourne states that Mrs Maybury "believed I had eventually agreed, as a result of what I was told by him, to enter into a 5 year fixed contract." This does not lead to a serious credibility problem because she was left with the impression of entering into a 5-year fixed contract, but when she heard the front-end tape which was not in her possession at the time of the statement of 3 March 2015, she ascertained that there was no promise. But for the withholding of the recording, Mrs Maybury would have been able to refresh her memory at the time of her statement.
(2) The fact that proceedings were not brought by Mr and Mrs Maybury was inevitably about the practical difficulties of bringing an action against companies with hugely greater financial strength than they have rather than in any way evidencing a lack of merit in their claims. The point turns out also to be hollow when years later, it emerged that there was a front-end recording which had been withheld and which was supportive of evidence of Mrs Maybury about the first conversation.
(3) I did not find the evidence about Mrs Maybury's mental health difficulties to be inconsistent and incoherent. The fact that she made postings on social media does not mean that she was fit at all times to devote many hours per week to the business. Further, I accept that Mr Maybury took the lead with the correspondence and the letters were then jointly signed.
(4) The fact that Mrs Maybury may have been able to work at points between July and September 2014 does not prove that she was fit for work before or after that time.
(5) The Claimants' suggestion was that given that there had been a climb down by BES at an early stage, it defied reality that Mrs Maybury continued to suffer in the way in which she described. Mrs Maybury came over as genuine: I do not accept the case that her account was made up or exaggerated. Her confidence was damaged by feeling that she believed that she had been the victim of a fraud and the way in which she had been treated. The fact that it might have affected her more than a person who was more robust is not an answer. Whilst I broadly accept the same, it is with a note of caution in that the Court has no expertise in appraising mental health issues without assistance, but that applies also to the attempt of the Claimants to be dismissive of her mental health difficulties.
(6) There are criticisms which can be made about the way in which the possible claim was calculated. Further, Mr and Mrs Maybury sought in correspondence to connect their claim against BES with a reference to the SRA in respect of Mr Newell's conduct. This linkage does not seem proper, and I have considered whether it undermines the overall credibility of Mr and Mrs Maybury. Despite this, the overall evidence of Mr and Mrs Maybury about the conduct remains intact.
(ii) Mr McMichael
(iii) Ms Whitfield
(17) Evidence of the Claimants and the impact on credibility of the complainants and Mr Bourne
(1) In response to the question, "you knew that the initial sales calls with brokers were being recorded, didn't you, right from the time that you got this system?" [T7/41/9 - 12], Mr Pilley responded: "Well, hence why I had the compliance team. It would be pointless having a compliance team if they weren't able to listen to any front-end calls." [T7/41/13 - 15].
(2) In response to the question (which had been put on a number of occasions), "how did Ofgem come to the understanding that the initial sales calls were not recorded?" (and in contradiction to the above and below) [T7/125:3 - 5], Mr Pilley stated: "I have no idea, probably because they were not." [T7/125/6]
(3) "BES simply didn't have access to the front-end, it was Commercial Power. [...] it's incorrect to state that BES ever had access to the front-end; it was Commercial Power." [T7/128/1 - 5].
(4) In relation to the time for which audio recordings were held, Mr Pilley stated: "I've already explained the reason why they were deleted [after 48 hours]: it was the sheer volume of the recordings and it was not practical or sustainable to retain them, nor was it necessary." [T7/117/10-19] and "I can only answer on my belief, and my belief I've made crystal clear, is the calls were there for 48 hours, apart from occasions where they'd been pulled by the monitoring staff or the complaints staff and they'd been placed into a folder or they'd been sent via an email." [T7/135/8 - 12]
" As I say, that wasn't our job, to investigate every
single thing at the time. Our job was to go down there,
obtain witness statements and bring back any documentary exhibits where it would be booked in and then actioned out by a senior officer. It wasn't for me and Ray to go through everything there and then."[T10/139/13-18]
" that wasn't our role at the time. Our role was to get a statement of complaint, get the exhibits and come back where they would be disseminated, and anything needed would be actioned out to another investigator. Myself and Ray were at the bottom of the food chain, is the best way I can explain it " [T10/142/1-6]
(19) Conclusion to the section on misfeasance
(1) The Claimants have failed to establish that the Defendant through Mr Bourne had knowledge that his actions, in the ordinary course, would cause loss to the Claimants, or that he was aware that there was a risk that they would directly cause loss to the Claimants that Mr Bourne wilfully disregarded.
(2) The Claimants have failed to prove that Mr Bourne had knowledge that his actions were unlawful.
"1. Did Mr Bourne:
(1) assist the campaign of Messrs Scrivener and Mooney carried out against BES and CPL?
(2) disclose information obtained as a result of the investigation or concerning the investigation?
(3) delegate investigative functions to Messrs Scrivener and Mooney?
(4) cause the Defendant to place reliance upon evidence gathered and/or influenced by Messrs Scrivener and Mooney without proper scrutiny:
(5) cause the Defendant to instigate the obtaining of the Search Warrants on the strength of such evidence? and/or
(6) incite or assist the harassment of BES and CPL?"
(a) In a sense, any preparatory steps by the Defendant which led to the issue of search warrants and thereafter leading to a decision to prosecute the individuals behind the Claimants assisted what Messrs Scrivener and Mooney were doing. Insofar as the question is whether Mr Bourne's intent was to assist in any campaign of Messrs Scrivener and Mooney, my judgment is that his intent was to assist the investigation on behalf of the Defendant. In that capacity, he communicated with Mr Scrivener as a source of information for the investigation. In so doing, he made regrettable pejorative remarks concerning the Claimants and engaged in tasteless banter, which were inappropriate and unprofessional.
(b) Any information which the Defendant disclosed as a result of or concerning the investigation was very limited as set out above. Information to the effect that there was an expectation that search warrants be issued was limited.
(c) Mr Bourne did not delegate investigative functions to Messrs Scrivener and Mooney. He had limited functions, namely to take statements (as required by his superiors Mr Dinn and Mr Williams) which he did himself and with Mr Noble. To the extent that he had contact with Mr Scrivener, this did not amount to a delegation of functions.
(d) Mr Bourne did not cause the Defendant to place reliance on evidence gathered and/or influenced by Messrs Scrivener and Mooney. He gathered statements in a professional manner as described above, allowing the witnesses to tell the stories without influence. He took down what the witnesses said and then provided statements to them for their consideration. They were free to amend the statements, and amendments were made. Mr Bourne did not test their evidence against documents or check the likely probabilities because this went beyond his remit and the time available to him. His involvement was limited to the taking of the statements: the compilation of the documents gathered by him and Mr Noble was for officers dealing with documents. The evaluation of the evidence and tying up the evidence with documents as well as the subsequent decision to make use of the statements was by others within the Defendant.
(e) Mr Bourne did not cause the Defendant to instigate the obtaining of the Search Warrants on the strength of such evidence. He took the statements in the manner set out above. The evaluation of the evidence and the decision to apply for search warrants was one taken only after the termination of the employment of Mr Bourne, This consideration was by more senior officers within the Defendant, the advice of Junior and then Leading and Junior Counsel and then the decision of the Lancashire Constabulary to apply for the search warrants.
(f) If and insofar as BES and CPL were harassed by others, Mr Bourne did not incite or assist such harassment. The answer to issue (a) above is repeated.
"Targeted malice: If and to the extent that Mr Bourne carried out one or more of the actions described in issues 1 (a)-(f) above, did he do so with the intention of injuring one or more of the Claimants?"
In my judgment, in the actions which he took and, in his communications, Mr Bourne did not have an intention to injure one or more the Claimants. The matters set out above in the section headed "Conclusion to the section on misfeasance" are repeated.
"Untargeted malice: If and to the extent that Mr Bourne carried on one or more of the actions described in issues 1(a)-(f) above, did he do so:
(a) unlawfully?
(b) knowing of, or in a manner that was subjectively reckless as to, such unlawfulness? and
(c) knowing or in a manner that was subjectively reckless as to whether such conduct was likely to cause harm to the Claimants?"
If and to the extent that Mr Bourne's actions were unlawful, he did not have knowledge of such unlawfulness nor was he subjectively reckless as to such unlawfulness. He did not know that such conduct was likely to cause harm to the Claimants nor was he subjectively reckless as to whether it would be likely to have that effect. The matters set out in the section above under the heading "Conclusion to the section on misfeasance" are repeated.
VIII Human rights claim in respect of Mr Bourne's actions
"Unlawful disclosure of information
141. Quite apart from their claims in misfeasance, it is common ground that if information about the investigation was unlawfully disclosed by Mr Bourne, the Defendant will be vicariously liable to the Claimants for breaches of their rights under Article 8 of the Convention pursuant to ss.6-7 of the HRA 1998 (CG, Ά7)."
(1) an admission about vicarious liability of the Defendant as a public authority for the purposes of s.6 of the HRA for the acts and omissions of its servants and agents;
(2) an admission to use information about and acquired in an investigation only to the extent reasonably required in order to enable it properly to carry out its functions and only to disclose such information to persons who had a reasonable and legitimate need for such information.
(3) as a result of the Claimants' rights under Article 8 of the Convention the Defendant was only entitled to disclose information concerning the Claimants obtained in the course of the investigation and/or about the investigation itself for one of the listed policy reasons listed in Article 8(2) to a necessary and proportionate extent.
(4) the Defendant had a duty to act impartially, not to provoke complaints against the Claimants (beyond inviting or encouraging customers to make a complaint) and not to assist in a campaign to injure the Claimants.
"(b) In so far as he made any disclosures about the investigation, such disclosures were consistent with "The Witness Charter" and were not unlawful, do not engage A1P1 or Article 8 ECHR and/or fail to meet the minimum level of seriousness to engage Article 8 ECHR.
(d) If, which is denied, Article 8 is capable of being engaged by reason of the acts of Mr Bourne, it is not engaged on the facts because the threat or assault to the Claimants' privacy arising from the acts complained of, must reach a minimum level of seriousness and the corporate entity must enjoy a reasonable expectation of privacy. Neither condition is satisfied here."
" it is important that this core right protected by article 8, however protean, should not be read so widely that its claims become unreal and unreasonable. For this purpose, I think there are three safeguards, or qualifications. First, the alleged threat or assault to the individual's personal autonomy must (if article 8 is to be engaged) attain "a certain level of seriousness". Secondly, the touchstone for article 8(1)'s engagement is whether the Claimant enjoys on the facts a "reasonable expectation of privacy" (in any of the senses of privacy accepted in the cases). Absent such an expectation, there is no relevant interference with personal autonomy. Thirdly, the breadth of article 8(1) may in many instances be greatly curtailed by the scope of the justifications available to the state pursuant to article 8(2) "
"It is true that 'private life' has been generously construed to embrace wide rights to personal autonomy. But it is clear Convention jurisprudence that intrusions must reach a certain level of seriousness to engage the operation of the Convention, which is, after all, concerned with human rights and fundamental freedoms "
(1) The communications were very limited in their ambit. They were a very different case from one in which there is a publication in the media or to members of the public previously ignorant of the information provided. They were communications with persons with whom there was already contact for the purpose of investigation. These were persons already committed to obtaining redress for the complainants: the complainants themselves and the likes of those seeking redress for them such as Mr Scrivener and Mr Mooney. The claim is in effect that some of the communications crossed a line between what was permitted and what was not.
(2) The communications were not particularly specific revelations about the investigation. Indeed, there is no evidence that they had any significant effect. The communications with Mr Scrivener were with a person who on the Claimants' case had an active campaign and he did not depend on Mr Bourne in order to continue it. To the extent that any communications crossed the line, the complainants were going to provide their statements in any event. There is no evidence that Mr Bourne improperly influenced the statements of the complainants, as was demonstrated particularly by the complainants who gave oral testimony. There is no reason to believe that it was any different in respect of other complainants.
(3) There is no identified loss from the communications of which complaint is made to the extent that they may have crossed a line. The loss pleaded is about the impact of the order for the Search Warrants and the subsequent execution and retention of property seized.
IX The search warrant application
(1) The pleaded case
(a) that "Lancashire Police made this application on behalf of, and utilising information provided by, the Defendant" or "[a]alternatively the Defendant procured the making of this application by Lancashire Police on the basis of such information", and that the Defendant was therefore subject to a duty: to make full and frank disclosure and/or fairly, properly and accurately present all information that it sought to rely upon to the Court and/or to present to the Court all arguments adverse to its application; to ensure that the actions of Lancashire Police in connection with the application were carried out in compliance with that duty; and/or to ensure that any information it provided to the Lancashire Police to use in connection with the application complied with that duty [RAPOC para. 32]; and
(b) that the Defendant breached the above duties, or is liable for breaches of these duties committed by the Lancashire Police, by presenting or causing Lancashire Police to present, misleading, incomplete, and inaccurate evidence to the Court and failing to ensure that submissions made on its behalf and/or which it procured to be made satisfied the requirements [RAPOC para. 33].
(1) "the description of the operation of the SME energy market"
(2) "the presentation of the allegations against the Claimants";
(3) "the description of Ofgem's historical investigation";
(4) "the failure properly to explain the role played by Messrs Scrivener and Mooney, and Ms Brown, in causing the Defendant's investigation, and further failure to mention the improper conduct of Mr Bourne";
(5) "the assertion that information and documentation could not be obtained in the absence of the Search Warrants";
(6) "false statements concerning the Claimants' business addresses" [RAPOC paras. 40-46].
(2) The law relating to the duty of full and frank disclosure as regards the search warrants
(1) "When applications are made without notice particularly those that involve the potentially serious infringement of the liberty and rights of the subject, inherent in the grant and execution of a warrant to search and seize there is a duty of candour. There must be full and accurate disclosure to the court, including disclosure of anything that might militate against the grant (Energy Financing Team Limited v The Director of the Serious Fraud Office [2005] EWHC 1626 (Admin) ("Energy Financing")" per Hickinbottom J (as he then was) in R (Chatwani) v NCA [2015] EWHC 1283 (Admin) at [106(iv)];
(2) The duty is to make full and frank disclosure of all material facts, with materiality to be decided by the Court, not by those causing the application to be made or their legal advisers: Brink's Mat Ltd v Elcombe [1988] 1 WLR 1350 at 1356F-1357B [Auth/1/12]; R v Crown Court at Lewes (1991) 93 Cr App R 60 at 68-69. It includes disclosing anything that might reasonably be considered capable of undermining any of the grounds of the application and drawing the Court's attention to any information that is unfavourable to the application: CrimPR, r.47.26(3); CrimPD, Ά47A.3.
(3) The duty has been aptly described as requiring the advocate to "put on his defence hat and ask himself what, if he was representing the defendant or a party with a relevant interest, he would be saying to the judge" R (Rawlinson and Hunter Trustees) [2012] EWHC 2254 (Admin); [2013] 1 WLR 1634 DC;
(4) The duty also involves the need to make proper inquiries, with the scope of the duty dictated by the nature of the case, the effect of the order on the subject of the Search Warrants and the degree of legitimate urgency. The duty is not just on legal advisers but also those behind the application who will often be the only persons aware of everything which is material: see Fundo Soberano De Angola v Jose Filomeno Dos Santos [2018] EWHC 2199 (Comm) at [53];
(5) "The grant and execution of a warrant to search and seize is a serious infringement of the liberty of the subject, which needs to be clearly justified, and before seeking or granting a warrant it is always necessary to consider whether some lesser measure such as a notice under section 2(3) of the 1987 Act, will suffice": per Kennedy LJ in Energy Financing at [24(i)]. Evidence about previous cooperation or consensual access may be significant: see R (Dulai) v Chelmsford Magistrate's Court & Anr [2013] 1 WLR 220 at [15 and 46], where there had been visits to the premises and production of documents, but the Court still refused the application to discharge the order;
(6) For applications seeking special procedure materials, the test is whether using any other measure is "bound to fail": PACE, Schedule 1, paragraph 2;
(7) The issuing of a warrant is never a formality, and it is therefore essential that the judge is given and takes sufficient time to consider any application: CrimPD, para.47A.2;
(8) It is not the practice where a warrant is sought in a criminal investigation under s.2(4) of the Criminal Justice Act 1987 for the important underlying documentation to be exhibited to the statement of evidence before the judge. There is a: "very heavy duty to ensure that what is put before the judge is clear and comprehensive so that the judge can rely on it and form his judgment on the basis of a presentation in which he has complete trust and confidence as to its accuracy and completeness": R (Rawlinson and Hunter Trustees) above at [88].
(9) The test whether a failure to make full and frank disclosure is sufficiently material, is whether the information that should have been given to the Judge "might reasonably have led him to refuse to issue the warrant": R (Mills) v Sussex Police [2015] 1 WLR 2199 at [55]-[59] per Elias LJ and relying upon R (Dulai) above at [45] (R (Mills) [2]). If there is bad faith or deliberate non-disclosure the warrant will be quashed whether or not the non-disclosure would have made a difference: R (Mills) above at [57].
"Particularly, in heavy commercial cases, the borderline between material facts and non-material facts may be a somewhat uncertain one. While in no way discounting the heavy duty of candour and care which falls on persons making ex parte applications, I do not think the application of the principle should be carried to extreme lengths. In one or two other recent cases coming before this court, I have suspected signs of a growing tendency on the part of some litigants against whom ex parte injunctions have been granted, or of their legal advisers, to rush to the Rex v. Kensington Income Tax Commissioners [1917] 1 K.B. 486 principle as a tabula in naufragio, alleging material non-disclosure on sometimes rather slender grounds, as representing substantially the only hope of obtaining the discharge of injunctions in cases where there is little hope of doing so on the substantial merits of the case or on the balance of convenience.."
"Sometimes the court hearing the judicial review application will be given the information which should have been given to the court below. This may involve not merely the material of potential benefit to the defendant which had not been disclosed, but also the police response to that material. In Dulai the court accepted (at [46]) that this evidence is admissible and that if it is plain that once all the evidence is taken into account the judge below would still have issued the warrant, then it should not be quashed. In effect, the court is concluding that taken in the round, and having regard to the police response, non-disclosure did not materially affect the outcome. On that strict test the court is reviewing the lawfulness of the issue of the warrant but is not undertaking its own assessment."
"I would simply observe that there are in my view considerable problems, as recognised in Rawlinson, in allowing the Divisional Court to make its own assessment of the evidence. The reviewing court is then standing in the shoes of the judge below and performing a function which by statute belongs to that judge. It is also stepping outside its reviewing function and allowing itself to become a merits court. But as I have said, the issue does not directly arise here."
"The High Court
(a) must refuse to grant relief on an application for judicial review
if it appears to the court to be highly likely that the outcome for the applicant would not have been substantially different if the conduct complained of had not occurred."
(1) Failure on the part of the Defendant adequately to prepare and present the application for the search warrants;
(2) Improperly seeking and obtaining documents through search warrants instead of seeking documents through cooperation or production orders;
(3) Non-disclosure in the presentation of the application.
(3) Alleged failure of the Defendant adequately to prepare and present the application for the search warrants
(a) The Claimants' case
(b) The Defendant's case
(1) the experience of DC Griffin, one of the most experienced officers on this issue within the Lancashire Constabulary;
(2) the detailed involvement of Counsel including Leading Counsel and Junior Counsel who helped with the preparation of the application and who presented it;
(3) the detail contained in the application signed by DC Griffin, which included sections as noted above presenting points which may be raised against the application;
(4) the Note of Counsel presenting as noted above the vigilance required in such applications with citation of case law, and detailing each of the matters which had to be satisfied before an application was made.
"in this case we had a load of witness complaints, which you don't normally get, that's not something -- I don't remember ever putting a case before a -- a search warrant before a judge where we actually have statements of complaint, especially fifty of them. It is just so unusual." [Day 12 / 49:14 19] " I've seen criminal cases go to Crown Court with less paperwork than what we submitted in respect of complaints than we submitted to the Crown Court." [T12/73:2 6]
"Q. Did you consider that you needed expert evidence to deal with those sorts of allegations? A. No, if a member of the public is telling us that somebody's lied to them, that somebody's misled them and there's allegations that these people who purport to be independent aren't independent, I'm not really sure what expert evidence would necessarily be required. You know, for want of a better expression, people have had -- people have been conned. That's the allegation. And I don't really need an expert. I don't think anyone would need an expert to say, oh, you've not been conned. There are lies there. People have been -- people told you lies. I don't know why -- what an expert would be able to -- how an expert would assist in that". [T12/75:19 76:7]
"Q. [ ] were you aware that there was an offer of cooperation? A. I'm not sure -- no, I'm not, but it wouldn't have changed matters because an offer of cooperation, like I said earlier on and I'm repeating myself, I do apologise to the court, is that it is naive for somebody to expect somebody to hand over material that might send them to jail. Q. And is the nature of the offence being investigated relevant to the issue of considering any offers of cooperation? A. Yes, I think offers of assistance are helpful maybe in a regulatory matter, but not in a criminal case when the stakes are high and people can be easily motivated not to hand over material that might cause them a problem. Q. And lastly, Mr Griffin, you signed off this warrant application some time ago. Have you seen or heard anything since which changes your view on the applicability and necessity to apply for the search warrants? A. No, there's absolutely nothing. I think it's fair to say that had I seen some of the letters that may have changed a bit. That may have changed some of the thought process but I would still have applied for these warrants in this case." [Day 12/78:25 79:24]
"We wouldn't simply request information from companies in a fraud investigation. That wouldn't be an appropriate way of doing it. If you're investigating matters of fraud, it would be ludicrous wanting to expect to be given all that information and if an investigation has already commenced, we're bound by the rules of PACE and any information which we're requesting asking for should be done in the form of a formal interview. And obviously that does come and there is an option for those under suspicion to provide an explanation and cooperate with the enquiry at the relevant time. That wasn't at that time." [Day 15 /167/9 20]
(1) it was unusual to have Counsel involved at this stage of the investigation, but it was done so that everything reasonably required should be undertaken before seeking search warrants;
(2) the material was closely considered: hence giving rise to the note of Counsel and the presentation to the Court;
(3) Counsel considered the matter over a period of time, and it was apparent that there was careful consideration of the relevant material.
(4) Observations
"87. In the present case, the judge was presented with the Information and the evidence of the case manager. None of the underlying documentation was put before him. In an application for a search order in civil proceedings, the important underlying documentation would be exhibited to the statement of evidence before the judge and the judge would have an opportunity of considering them. That is not the practice where a warrant is sought in a criminal investigation under s.2(4) of the CJA 1987.
88. Thus, given there is no practice to provide the underlying documentation, it was accepted that there is a very heavy duty placed on the SFO to ensure that what is put before the judge is clear and comprehensive so that the judge can rely on it and form his judgment on the basis of a presentation in which he has complete trust and confidence as to its accuracy and completeness ."
(1) The summaries were no more than that and cannot realistically be expected to be a comprehensive analysis of the position: otherwise, the purpose of having summaries would be defeated.
(2) The fact that there might be answers to the points raised was identified broadly in the counter-arguments identified on the making of the application.
(3) Specific points raised as omissions or providing a different perspective were not by themselves or in the totality of the case sufficiently probative to amount to material non-disclosure or misrepresentation. They did not provide a basis to consider that a judge having this information might decide not to make the order sought.
(4) For example, the omission of references to rejections by the Ombudsman (e.g. by reference to Mr McMichael) is immaterial because the Ombudsman was not told about the pattern of complaints (and especially in respect of front-end calls) in the same way as the Court was informed on the application for search warrants.
(5) Likewise, the fact that complainants were offered some redress (e.g. Mrs Maybury's business) is immaterial because the gravamen of the complaints was a pattern of misrepresentation by numerous complainants and not the way in which they were handled after the event. Indeed, as regards Mrs Maybury, more significant than any redress was the attempt to stifle her complaints by a letter sent to her one Friday evening at 6.58pm requiring a response within 48 hours (that is still within the weekend), failing which injunctions were threatened.
(6) The limited numbers of inaccuracies in the summaries highlighted by the Claimants do not give rise to matters which could amount to a material misrepresentation. Examples are Complaint 8 (The Beauty Rooms/Diane Commons), Complaint 12 (Brew Cavern/Matthew Hinton) and Complaint 16 (Sleepy Inns/Tina Laird). There was a particular complaint in respect of a summary of an aspect of Mrs Maybury's evidence, whereas her evidence as a whole very clearly demonstrated reasonable grounds for believing that she was a victim of misrepresentations.
(7) There is a long account on the part of the Claimants taking issue with the contentions made by complaint 10 (Elstree Effects/Mr Dimmer). Mr Dimmer succeeded only in part before the Ombudsman and his contention that he would be paying more under the contract with BES than under the prior Npower contract may have been mistaken. It is not every error which gives rise to a material misrepresentation. The errors complained of did not provide a different potential characterisation of the conduct of the Claimants, and so they were not capable of affecting the overall decision of a judge considering whether or not to order a search warrant.
(8) In the context of the application as a whole, I am satisfied that there was no material misrepresentation in the sense used in the case law, namely that the alleged material which was not accurate (if and to the extent that this was so) might not have reasonably led to the decision of the judge to refuse the search warrants.
(4) Allegation of improperly seeking and obtaining documents through search warrants instead of seeking documents through cooperation or production orders.
(a) The Claimants' case
(b) The Defendant's case
"As you know, Ofgem completed its investigation into BES for various breaches of licence conditions and Complaints Handling Regulations in December 2015 and this resulted in a significant penalty. However, this dealt with only half the problem, at best, and all the issues we sought to deal with stem from the alleged misrepresentations made by brokers selling energy contracts on behalf of BES to induce consumers to agree energy contract with BES.
Those concerns and allegations surrounding BES and associated brokers have been around since 2009 and were highlighted by BBC Radio 5 in 2010. At that time Ofgem did not have the necessary powers to enforce against the brokers allegedly involved. Back in 2013/14 we started to investigate this aspect using our newly acquired powers under the BPMMR (November 2013), but subsequently stepped aside due to interest from Trading Standards and your greater powers in this area.
We continue to receive a high volume of complaints and correspondence about BES and associated brokers and face quite strong criticism from consumers for apparently failing to deal with a significant area of concern. Until your case is within the public domain, it is much harder for us to rebut criticisms effectively.
We look forward to hearing from you in relation to developments and progress in your case, and remain very willing to cooperate and assist you as appropriate."
(1) "Well, I have some knowledge as to the necessity of the warrants, and yes, I'm aware that warrants were necessary because a lot of the investigation involved phone calls and it would have been -- would be crucial evidence to criminal investigation if those phone calls were available. So yes, absolutely, I was aware. It was also important that we had training records and business records which showed any links between the companies. So yes, absolutely, I was aware of those considerations taking place." [T15/44:4 13]
(2) "Yes, it's not seizing data willy-nilly, is it? It's making sure we capture the evidence which was detailed in the warrant applications." [T15/148:20 22]
(3) "Q. So this is not an area where there was any concern at all about things disappearing, is there? A. Well, absolutely it is And remember, this is a fraud investigation we're looking at. So, you know, our suspicions are alert as to the activities of the company. So, you know, we want to capture the records ourselves to be sure that they exist and are kept. So, yes, entirely appropriate to look for those records." [T15/154:11 20]
(c) Observations
(5) Other allegations of non-disclosure in the presentation of the application for the Search Warrants
(1) the cooperation with Ofgem;
(2) the offers of cooperation in the correspondence with Fieldfisher and other solicitors;
(3) the alleged influence of Messrs Scrivener and Mooney;
(4) the allegations made about Mr Bourne.
"Did the Defendant instigate the application for the Search Warrants in a manner which caused the Court to be misled and/or where there were material failures to comply with duties of full and frank disclosure for which the Defendant was responsible in respect of:
(a) The description of the operation of the SME energy market and industry practice concerning cold calling, verbal contracts, the absence of a cooling off period, the recording of calls and/or customers being told that they were on emergency rates?
(b) The relationship between BES, CPL and brokers, the nature of their respective businesses, the role played by rival brokers and Messrs Scrivener and Mooney in generating complaints, the proportion of complainants to total customers, the historical nature of complaints relied upon and/or the role played by a comfort call procedure in detecting and addressing shortcomings in the dealings between brokers and customers?
(c) The description of the Ofgem investigation including the nature of the matters investigated, the fact that they were historical and/or BES's cooperation and correction of the matters of concern prior to the conclusion of the investigation?
(d) The failure to disclose the impact of the Scrivener and Mooney campaign, Ms Kelly Brown (Bailey) and/or Mr Bourne's misconduct on the investigation?
(e) The failure to disclose the offers of cooperation from the Claimants, the Defendant's failure to engage with the same, the Defendant's failure to attempt to obtain information and documentation by less intrusive steps and/or the Claimants' historical cooperation with the Ofgem investigation and other investigations?
(f) The statements that BES used Darwin Court as a correspondence address and/or that CPL used Mr Pilley's home address as a correspondence address?"
"I have no idea if CRS & ERS are losing money as they are not really my Companies as we both know and I have never been privy to the ins and outs. I front them for everyone's benefit, probably mine included, and will continue to do so because as you say we are best mates. I can't afford to leave and set-up on my own as you well know..."
The explanation of Mr Pilley was that Mr Qualter was suffering from stress. It is apparent from the email that Mr Qualter was under pressure, but this does not explain why he would have made this assertion if it was not true. It was consistent with the allegations in the 5 Live Investigates programme. This document cannot be relied upon in connection with the making of the application which depends on the knowledge of the Defendant at the time of the application, but it is relevant to Mr Pilley's evidence maintaining the independence of the strategic partners.
(1) Without treating this as a pleading point, there is a point about prominence: the pleadings did not mention the UIA (referring simply to rival brokers). There is a qualitative difference between the actions of rival brokers and concerted action of a trade association comprising other brokers in the industry.
(2) The evidence given by Mr and Mrs Maybury showed that their evidence was the product of their own independent thought and whatever contact they may have had with the UIA (or Messrs Scrivener and Mooney) did not cause or influence the substance of the complaints. Likewise, in the other evidence given orally, the complaints were not so caused or influenced.
(3) The other instances of contact in the context of the application were not of such a nature and extent as called for disclosure.
(4) It is necessary to distinguish between the failure to identify the points of detail taken by a respondent to a search warrant application after formulating their own case and the points reasonably expected of an applicant putting on the respondent's hat. None of these points are points which if identified to the court might reasonably have led to a judge refusing the application.
(5) If the point was as weighty as is indicated by the submissions of the Claimants, it is surprising that the UIA was not mentioned as such in the pleadings.
(6) The Human Rights Act 1998 ("HRA") claim
(1) "[t]here was no objective and/or rational foundation for suspecting that the Claimants had been involved in any criminal activity and/or that their premises would contain any information relevant to the Defendant's investigations";
(2) "[t]he Defendant failed to make any attempt to obtain access to, inspect or take copies of the Claimants' property by consent before seeking and obtaining the search warrants"; and
(3) "[t]he Defendant did not seek to obtain, or to procure the obtaining of, a production order pursuant to paragraph 1, Schedule 1 PACE before applying for the Search Warrants".
(1) that the Defendant seized or procured the seizure of "property belonging to the Claimants in breach of statutory duties to return it and as such contrary to the conditions provided for by law and/or not in enforcement of any such law". [RRRAPoC at paragraph 79.2];
(2) that the Defendant "unlawfully retained, alternatively caused the unlawful retention of, property belonging to the Claimants in breach of statutory duties to return it and as such contrary to the conditions provided for by law and/or not in enforcement of any such law" [RRRAPoC at paragraph 79.3]; and
(3) that "[t]here have been, and remain, failures to comply with obligations under ss. 50, 52, 53 and 54 of the 2001 Act for which the Defendant is responsible and/or liable" [RRRAPoC at paragraph 82.7].
(1) there were reasonable grounds to believe that the Claimants had been involved in criminal activity and/or that their premises would contain information relevant to the Defendant's investigations;
(2) the Defendant was entitled to take the view that in the light of the history to date and the particular nature of the fraud believed to exist, there was a risk of destruction or concealment such that proceeding with the consent of the Claimants was not a realistic option;
(3) the same considerations militated against merely seeking a production order.
"Did the Defendant instigate the application for the Search Warrants in a manner which caused the Search Warrants to be obtained in excessively broad terms?"
In my judgment, the terms of the Search Warrants were not in excessively broad terms. This was a large-scale investigation into systemic and endemic fraud. It was not one fraud. Every time that new business was obtained by fraudulent misrepresentation was a separate fraud, even if it was pursuant to a similar modus operandi each time. It was recognised that it would be an enormous task to prove such frauds, and that the probability was that there would be sustained resistance on a grand scale (as indeed has transpired). The Defendant considered that it required to have a wide-ranging seizure of documents so as to uncover as much as reasonably possible and to prove the fraud. It will be borne in mind that the scope of the Search Warrants was in consultation with Leading and Junior Counsel, showing an unusual attention to detail for such an application. Although not relevant to the adequacy of the disclosure at the time and other matters under consideration about the nature and scope of the application, the scope of the searches has been vindicated by uncovering pursuant to the Search Warrants documents such as front-end recordings and internal emails indicating an intent to cover up the same.
"Should the Defendant have sought the information and documentation by consent or the use of less intrusive means?"
It does not follow from the fact that this was an investigation into fraud that it necessarily follows that a less intrusive means such as a production order would not suffice. It is a question of judgment in each case. In the instant case, there developed a picture from the investigation that the Claimants had an elaborate system of setting up sham companies in the pretence that they were brokers at arm's length. There was evidence of similar fact evidence of the kind of representations that were made in the front-end conversations to sign up new customers. Faced with systemic fraud, the Defendant was entitled to form the view that an informal request for documents or a production order, depending upon the integrity of the Claimants to produce documents was unreliable way of getting documents. There was a reasonable basis to believe that there was an endemic fraud and that there would be dishonest conduct in concealing documents in the event that Search Warrants had not been sought. The answer to this issue is therefore in the negative. This conclusion has been reached on the basis of the information known about at the time of the application and without the information learned from the documents obtained through the Search Warrants.
"If the answer to any of the issues and sub-issues at Issue 4 to 6 above is yes, did this mean that the interference with the Claimants' rights under Article 8 and/or Article 1 Protocol 1 by virtue of the obtaining and execution of the Search Warrants was:
(a) Unlawful;
(b) Unnecessary for the purposes for which the interference with such rights is permitted;
(c) Disproportionate?"
The answers to the issues and sub-issues at Issues 4 to 6 are in the negative, and accordingly, this does not arise for consideration.
"Does the immunity principle:
(a) Apply to the Defendant having regard to its role as an
instigator?
(b) Apply to the Claimants' HRA 1998 claims?"
It was submitted that the Defendant had an immunity in connection with the application. This was challenged by the Claimants. This otherwise controversial issue does not arise for necessary consideration in view of the findings in respect of Issues 1-6 where no liability has been found. Hence, it is not necessary to consider if immunity arose. Given the fact that no liability has been found, and also the extent to which this would have prolonged this already long judgment, it is not necessary to consider what decision the Court might have reached.
"Are the Claimants only able to advance claims based under the HRA 1998 in respect of the obtaining and execution of the Search Warrants:
(a) Within judicial review proceedings; and/or
(b) After first setting aside the Search Warrants?"
"Having regard to the answers to Issues 4 to 9 above:
(a) Is the Defendant liable to the Claimants pursuant to ss.6-7 of the HRA 1998 by virtue of breaches of their rights under Article 8 and/or Article 1 of Protocol 1 of the Convention?
(b) Are the Claimants entitled to a declaration that the Search Warrants were obtained by way of material failures to comply with the duty of full and frank disclosure and/or by the Court being misled and/or that their rights under Article 8 and Article 1 of Protocol 1 of the Convention have been breached?"
The effect of the answers given above is that the answer is 'no' to both questions.
(7) Subsequent evidence relating to the action against Mr Scrivener and Mr Mooney
(8) Conclusion
(i) there was a fraud being practised by the Claimants;
(ii) the Claimants' desire to help was cosmetic and could not be relied upon; and
(iii) Search Warrants were required in order to seek documents which might provide evidence of such fraud;
(iv) Search Warrants in the terms sought were appropriate and proportionate
If it had been the case that the Claimants had shown that the warrants were improperly obtained and/or that there were no reasonable grounds on which to seek the same, then the Defendant has advanced a number of defences which would have arisen for consideration. In view of the findings which I have made, defences such as immunity are not necessary to determine.
(9) Conclusion
X Execution of the warrants
(1) : seizure of materials beyond the scope of the Search Warrants and/or the failure to provide inventories;
(2) seizure of LPP;
(3) failure to carry out the process of imaging the servers and making them available for return within a reasonable time;
(4) failure to return the hard copy documents within a reasonable time.
(1) The accounts of how the Search Warrants were executed;
(2) Was the liability for any unlawful acts in the execution of the Search Warrants that of the Defendant or the police;
(3) If the liability was that of the Defendant:
(a) Whether items were taken which went beyond the scope of what was permitted;
(b) Whether LPP material was seized in an unlawful manner;
(c) Whether the removal of the servers from the premises was unlawful.
(1) The accounts of how the warrants were executed
"It was never the defendant's intention to cause embarrassment to the claimants. As indicated above, it was intended that the searches would be completed in one day, but this proved impossible due to the officers' inability to extract the information contained on the server. There was no re-entry"
(2) Was the liability for any unlawful acts in the execution that of the Defendant or the police?
"Lancashire Police, at the instigation of and/or on behalf of the Defendant, and pursuant to the Defendant's instructions of and in the presence of representatives of the Defendant, executed the search warrants and seized a large volume of items ."
(a) The law
"a person who merely gives information in good faith albeit mistakenly does not commit the tort. To be liable they have to go beyond that by directing, requesting or directly encouraging the officers to arrest the claimant, as a result of which the prosecuting authority could be said to be acting as their agent or whom the defendant procured to act as they did."
"[t]he circumstance that a defendant in an action of malicious prosecution was not technically the prosecutor should not enable him to escape liability where he was in substance the person responsible for the prosecution having been brought."
He continued (at pp.86H-87A):
"Where the circumstances are such that the facts relating to the alleged offence can be within the knowledge only of the complainant, as was the position here, then it becomes virtually impossible for the police officer to exercise any independent discretion or judgment, and if the prosecution is instituted by the police officer the proper view of the matter is that the prosecution has been procured by the complainant."
(b) Applying the law to the facts
(1) the Search Warrants were obtained under the PACE and were addressed to police officers. The Premises Searched Records (PACE 8 Forms) were completed by the police. The Defendant was not authorised to, and did not, execute the warrants. The Defendant was authorised to accompany the police on the search, as were officers from Trading Standards National E-Crime, from Lancashire Trading Standards, Blackpool, National Crime Agency and independent counsel;
(2) the search took place pursuant to the Lancashire Constabulary Search Strategy;
(3) the Lancashire Constabulary had their own expertise and experience in conducting such searches, and were doing it themselves rather than at the direction of others;
(4) there was no Operational Order drafted by the Defendant.
(5) the Premises Searched Records were Lancashire Constabulary documents completed by the police. They each named the police officer in charge of the search and a list of police officers underneath as being the people who were executing the warrants. There may also appear in such documents the name of a trading standards officer present;
(6) the search teams were provided by Lancashire Constabulary (it had 70 of its officers carrying out the search) supplemented by officers of the National Crime Agency.
(7) the contemporaneous notes of Matthew Hunter show that the Defendant's representatives sought authority from the police and were given authority before unplugging and removing the server;
(8) powers under sections 50 and 51 of the Criminal Justice and Police Act 2001 (additional powers of seizure of property in an authorised search) are exercisable only by the police. There are notices under sections 50 and 51 in the documents before the Court which were completed by the Lancashire Constabulary on their forms (and not by the Defendant) describing the location of seizure, the grounds for seizure and the description of the property searched;
(9) neither were the warrants executed nor were section 50 and 51 powers exercised by the Defendant.
(3) If the liability was that of the Defendant, was the execution of the Search Warrants unlawful?
(11) Were items seized which were beyond the scope of the Search Warrants, taking into account the additional powers of seizure under s.50. CJPA?
(12) If so, to what extent was such excessive seizure undertaken by the Defendant?
(13) If and to the extent that such excessive seizure was undertaken by officers of the Lancashire Constabulary rather than by officers of the Defendant, is the Defendant liable for their actions, whether by virtue of such officers acting as the Defendant's agent, at its instigation or otherwise?
(a) The items came within the terms of the Search Warrants; or
(b) The items were seized pursuant to powers under s.50 CJPA 2001; or
(c) The material comprised electronic data within common drives and were seized by reason of the fact that it was inextricably linked to material which was within the Search Warrants or a section 50 power of seizure.
(14) Were the notices required under PACE and the CJPA served on the Claimants after the execution of the Search Warrants?
(15) If the answer to Issue 14 above is no, did this render the seizure of any property unlawful?
(16) Did the Defendant damage items of IT equipment belonging to any of the Claimants?
(17) Was the manner in which the Search Warrants were executed disproportionate?
(18) Having regard to the answers to issues 11 to 17 above:
(a) Is the Defendant liable to the Claimants in respect of the torts of trespass and/or conversion in respect of seized property?
(b) Is the Defendant liable under ss.6-7 of the HRA 1998 for breaching the rights of the Claimants pursuant to Article 8 and Article 1 of Protocol 1 of the Convention in respect of any items of seized property?
XI The Claimants' submissions regarding the removal of the servers and their retention
(a) The pleaded case
(1) the Defendant retained the property seized without lawful justification and that thereby the Defendant committed, alternatively is liable for, acts of trespass, alternatively conversion;
(2) The Defendant failed to comply with s.53 of the CJPA 2001 including by failing to adhere to its timetable and the Defendant returned the servers in a piecemeal fashion;
(3) The Defendant was in breach of s.54 of the 2001 Act in respect of LPP material.
(1) The Defendant unlawfully retained property belonging to the Claimants in breach of statutory duties to return it and as such contrary to the conditions provided for by law and/or not in enforcement of any such law
(2) The Defendant failed to comply with ss.53 and 54 of the CJPA 2001.
(b) The legal framework
(1) Pursuant to s.53 CJPA 2001, there is an obligation upon the person for the time being having possession of the seized property to take certain steps as soon as reasonably practicable to ascertain the status of the property seized pursuant to s.50 and the grounds for ongoing retention.
(2) The obligation to return property subject to LPP pursuant to s.54 CJPA 2001 will be discussed below.
(3) Following removal from the premises, property seized by the police was transferred into the possession of the Defendant for examination for the purposes of the investigation. The Defendant admits that from that point it is potentially liable in trespass or conversion or pursuant to the HRA.
(4) The starting point is the common law power of retention of seized articles: see Ghani v Jones [1970] 1 QB 693 at 708: the police "must not keep [it] nor prevent its removal for any longer than is reasonably necessary to complete their investigations or preserve it for evidence. If a copy will suffice it should be made and the original returned. As soon as the case is over, or it is decided not to go on with it, the article should be returned".
(5) The police have an overriding duty to retain property which may be used as evidence see R v Lushington Ex p.Otto [1894] 1 QB 420 at 423-424. The police are entitled to retain property if it is likely to be a 'reasonably necessary' part of the evidence see Malone v Commissioner of Police [1980] QB 49 at 60A per Stephenson LJ and 70C per Roskill LJ.
(6) The common law is supplemented (but not superseded) by the provisions of the Police and Criminal Evidence Act 1984 and the Codes of Practice thereto, in particular s.22 [A/V6/93] and Code B [A/V6/97].
(7) Section 22 provides as follows:
"(1) Subject to subsection (4) below anything which has been seized by a constable or taken away by a constable may be retained so long as is necessary in all the circumstances;
(2) Without prejudice to the generality of subsection (1) above
(a) anything seized for the purposes of a criminal investigation may be retained, except as provided by subsection (4) below
(i) for use as evidence at a trial for an offence; or for (ii) forensic examination or for investigation in connection with an offence .
(4) Nothing may be retained for either of the purposes mentioned in subsection (2)(a) above if a photograph or copy would be sufficient for that purpose."
(8) Code B applies to the search, seizure and retention of property, and it provides amounts amongst other things:
(i) Para 7.14 -Subject to paragraph 7.15, anything seized in accordance with the above provisions may be retained only for as long as is necessary. It may be retained, among other purposes: (i) for use as evidence at a trial for an offence; (ii) to facilitate the use in any investigation or proceedings of anything to which it is inextricably linked (see Note 7H); (iii) for forensic examination or other investigation in connection with an offence; (iv) in order to establish its lawful owner when there are reasonable grounds for believing it has been stolen or obtained by the commission of an offence.
(ii) Para 7.15 Property shall not be retained under paragraph 7.14(i), (ii) or (iii) if a copy or image would be sufficient. The issue for the court in relation to the retention of seized items is whether and to what extent any individual item of property was retained by the Defendant for longer than was reasonably necessary.
(iii) Explanatory Note 7H- Paragraph 7.14 (ii) applies if inextricably linked material is seized under the Criminal Justice and Police Act 2001, sections 50 or 51. Inextricably linked material is material it is not reasonably practicable to separate from other linked material without prejudicing the use of that other material in any investigation or proceedings. For example, it may not be possible to separate items of data held on computer disk without damaging their evidential integrity. Inextricably linked material must not be examined, imaged, copied or used for any purpose other than for proving the source and/or integrity of the linked material.
(iv) S.67 PACE provides that a failure to comply with any provision of any of the codes shall not of itself render a person liable to criminal or civil proceedings.
(c) Were the servers seized retained for longer than necessary?
(1) The imaging should have been done in situ so that the servers did not need to have been removed.
(2) Even if removed, the imaging should have been done in 2-3 days as per the Operation Best Computer and IT strategy ("the IT Strategy").
(3) Even if the IT Strategy was not realistic, the imaging process could have been done in 5½ days on the basis that one disk was imaged per day on the 12 imaging ports across the four workstations.
(4) BackTrack should have been used instead of the RAID system. This would have led to faster turnround time before the return of the servers. Examples of this were that (a) in respect of server 20, instead of attempting to reconstruct RAID, it took 2 weeks before Back-Track was eventually used, (b) in respect of server 10 from 12/13 August to 15 August, and (c) in respect of server 11 from 10 August to 13 August, and this was necessary to allow front-end applications to work: see Claimants' Closing Submissions at paras. 442-443.
(5) There was not a determination to progress this time critical exercise so as to achieve the fastest turnround time. The constraints included the fact that the NTSeCT facility was limited to four imaging stations. There was competition for this facility between imaging of the Claimants' material and material in other cases.
(6) Absent access to the four imaging stations, NTSeCT could have set up laptops with blockers and FTK Imager to increase their imaging capabilities.
(7) If there were difficulties which were perceived, then a third party should have been engaged such as CY4OR to assist with the process.
(8) There was an absence of a coherent strategy on the first day, namely 28 July 2016 as a result of which imaging took place at the premises, and it was not until about 19:00 that the decision to remove servers took place. As a result of that delay, the operation continued at site into a match day on 29 July 2016 and the operation only got going in earnest after the weekend on 1 August 2016.
(d) Mr Childs' evidence
(1) The IT Strategy is a document based on the limited knowledge available prior to entering premises. It is at best a suggestion of what is likely to be the approach. It cannot be a set of instructions of how things are going to be done on site. That is why only trained officers are used on the search and seizure, able to respond to the different circumstances that might arise [T14/157/17 158/4].
(2) It was very rare for there to be more than two or three servers on the site. In the instant case, there was a vast number "It is unusual to go into a business and come out with 20-odd servers and a load of other computers." [T14/167/6 167/10]
(3) "The likelihood of being on site and imaging terabytes of data is very low. We don't expect to be staying on site if there are volumes of data of that size, because of the time taken to do forensic imaging. So in circumstances where there are large volumes of terabytes of data the anticipated action is to seize servers, take them back to the lab, image them and get them back, which actually is a more effective and efficient way of dealing with them." [T15/15/4-12].
(4) "There is no doubt in my mind that I would not have considered on site imaging being a valid option, in view of the quantity and in some cases complexity of the servers that were present, along with all the other ancillary items that were seized. It would not have been a consideration. I would have done the same thing in seizing and taking away all of the servers and the additional workstations that were taken from the scene. I have no doubt that on-site imaging would not have been considered as even the slightest option." [T15/74/1-20]
(1) "At the time that following this search and seizure the bulk of the imaging within the lab was dedicated to this job. So I would say that the imaging was completed as quickly as we were able to do so." [T15 /47/13 17] "I know what was going on at the time in the lab, and as far as I am concerned the imaging that was being done was almost solely to do with these particular exhibits. So I am satisfied that they were being imaged as quickly as they could be, and as far as I'm aware in the order that was being requested from the on-site search and seizure." [T15/48/10 16]
(2) As regards the time take for imaging, this was "completely dependent on the volume of storage and in some cases the type of data present on that storage. Within very small limits of changes that can be made within the forensic software, the time taken is purely down to how long the software takes. We have got no other control over it." [T15/69/18 70/4]
(3) He also said that it is most effective and efficient to work in a controlled environment, meaning in the lab. He said:
"."Q. In terms of your experience of searches, what is the most efficient and effective method of getting servers back up and running as quickly as possible? A. I consider that, particularly where you are dealing with multiple servers, the most effective and efficient way of dealing with them, getting them back up and running quickly is to seize them, take them to the lab where there is a controlled environment, deal with them as quickly as possible, but always with that proviso that ultimately the evidence is what needs to be dealt with correctly and that you know that you've got access to it, but as soon as you have got verified forensic images with data you can understand, that you have backed-up copies of those forensic images, at that point you can return the exhibit, and in the case of business servers obviously get them back running as soon as you can. Q. You say deal with them as quickly as possible. Can you think now, Mr Childs, of anything that you might have been able to do in relation to these servers and computers seized that would have returned them any more quickly? A. I don't consider that the alternative methods that have been suggested would give me what I consider to be the best evidence that is available. And so I'm still very, very satisfied that the action that we took in physically imaging the drives, attempting then to reconstruct the RAID systems within software, in the few instances where that failed then resorting to what I would consider the second option of using the BackTrack DVD, I would still consider that to be in my experience the best possible option." [T15/82/20-83/25]
(4) There was some amount of weekend and overnight working, but this had to be by way of choice [T15/78/8-13]. Requests for such working were accommodated, but it is not the preferred way of working. He recalled working late for a number of weeks at this time and working weekends [T15/77/2-5].
(1) "The expectation would always be that if there is a large volume of data then on-site imaging is not a valid option, and you would usually seize and remove items for physical imaging back at the lab. So the storage that you take for the potential of imaging on site would not be huge amounts, because the expectation is if there are huge amounts of data you are not likely to be doing it on site." [T14/64/18 65/2]
(2) Forensic imaging to a USB connection is a slower method of transferring data than using the forensic imaging workstations off site.
(3) The servers were in multiple locations which creates a burden in ensuring that imaging is secure at all locations.
(4) It was important to have designated areas for imaging hard drives rather than being scattered around a room.
(5) " the big issue with imaging on site is the fact that you are always going to be working on the premise that if the forensic image fails to verify correctly you have to begin the process from the start, and particularly when you're dealing with large capacity hard drives it can be 24-48 hours before you know that you're going to have to repeat that same process and it will take another 24-48 hours, and you are still not guaranteed that after that you're going to get a verified image." [T15/79/13-80/13]
(1) "I don't consider that the alternative methods that have been suggested would give me what I consider to be the best evidence that is available. And so I'm still very, very satisfied that the action that we took in physically imaging the drives, attempting then to reconstruct the RAID systems within software, in the few instances where that failed then resorting to what I would consider the second option of using the BackTrack DVD, I would still consider that to be in my experience the best possible option." [T15/82/20-83/25]
(2) BackTrack was a secondary option because where it was not possible to recreate the RAID in software, BackTrack was a viable option to use [T14/45/4-46/12].
(1) The laboratory was a national resource having to deal with other cases (some of which have restricted time schedules attached to them) and not dedicated solely to the instant case.
(2) This said, the bulk of the imaging was dedicated to the instant case during the period when the servers were removed to the laboratory [T15/51/18-52/10 and T15/53/24-54/17].
(3) There was a limitation on the speed of the work in the lab in that there were four dedicated workstations each capable of imaging three hard drives at a time [T14/168/5-24].
(1) Normally there would be no consideration to copying on site. However, it appeared that what was being done was accommodate to a request not to take away a server that was being used partly for the football club [T15/47/13-17].
(2) There are processes which need to be completed before actual imaging starts, namely cataloguing and indexing and setting up an exhibit location process. This involves setting up barcoding on each individual exhibit to ensure that it is known within the store where the exhibit is [T15/20/21-21/13]. This must have affected the ability to do much imaging before the weekend.
(1) The ability to manage the lab would be compromised if there were random laptops lying around with very sensitive information.
"You don't particularly want laptops just sitting around with evidential hard drives attached on a work bench somewhere. You want to keep your evidential hard drives in a manner where you are certain and sure that they are being dealt with properly. To have evidence just sitting on desks somewhere in a lab imaging I would not consider to be a sound process."
[T14/36/1-8]
(2) There were some documents indicating that CY4OR might have been prepared to do the job for a sum of £12,000. Despite being challenged extensively in cross-examination, Mr Childs was very confident that CY4OR would not have been prepared to recommend imaging on site if they had known the size of the job and in particular the number of servers.
(3) There were security issues about contracting out the imaging to third parties. The sensitivity of the information was such that it was important to have the operation carried out under the control of Trading Standards and not farmed out to a third-party contractor.
(e) Observations
(1) Any criticism of the operation must not be one with the advantage of hindsight. In assessing what were the reasonable steps to take, it is necessary to look at what could reasonably have been expected with foresight.
(2) It does not follow that if the work could have been done faster, then there was culpable delay. That is because the standard expected was not absolute, but of reasonable diligence. It is also because some of the work is trial and error. Some of the work depends upon making professional judgments. For example, the decisions as to what software to use involves to an extent matters of judgment. So too does the decision not to contract out, taking into account the dangers of losing or compromising sensitive evidence vital for considering a prosecution. Working within those constraints, the benchmark was only of reasonable progress. The submissions about timing on the part of the Claimants do not take adequate account of these concepts.
(3) Insofar as it was contended that the matter has to be considered without reference to the limited resources of the NTSeCT, I reject the suggestion that this does not have to be considered. It is relevant to take into account that there were other cases demanding on the resources of the lab, albeit that this case had the bulk of the attention at the time of the execution and the imaging. It is therefore legitimate to take into account that there were four workstations only. If that had been manifestly inadequate, then that might have needed some attention. However, that was not the way in which the case was put.
(4) I accept entirely the notion that parting with any of the servers or the laptops to a third party outside the control of Trading Standards was treated as too dangerous a step to be taken. The sensitivity of the operation and concerns about having random laptops in use are relevant in assessing the timing of the operation.
(5) Any challenge does not depend on Wednesbury unreasonableness (which derives its name from the case of Associated Provincial Picture Houses Ltd. v Wednesbury Corporation [1948] 1 KB 223). However, there must be some leeway considering the pressures which the Defendant must have in the operation before finding that the Defendant acted unreasonably. It is to be borne in mind how complex the operation was bearing in mind the number of servers and laptops involved and the vastness of the information.
(6) The detailed criticisms looking at every server separately showed an impressive attention to detail, but it also gave rise to a minute examination which missed the big picture. The attempt to use those notes or to extrapolate times that an operation could have taken if done in a different way miss the issues of the complexity of the operation and the judgments which had to be made at the time. It was in any event impressive how Mr Childs was able to answer at the micro as well as the macro level. Some of the criticisms against Mr Childs evidence smacked as being of a scattergun nature e.g. that his working practices were inflexible in not having laptops with write blockers: see [T14/35/4-39/9]. In fact, as noted above, it was entirely rational not to adopt the suggested approach, based on keeping control of sensitive material. This did not make good the allegation of inflexibility of Mr Childs.
(f) Retention of property following the return of the servers
(1) The original documents could simply have been photocopied and the originals returned;
(2) The process could have been accelerated by sending out the documents to a photocopying company;
(3) The documents could have been returned in batches instead of all or most at once at or towards the end of the process.
(1) The material could not have been returned within a matter of weeks. The first part was a photocopying process which lasted a long time because, in Mr Pierce's oral evidence, "we had to go through a copying process which took a significant amount of time to do" [T16/110/23-T16/111/5] and was not completed until January 2017 [T16/112/12-15]. The copies were provided in May 2017, but not the original copies [T16/111/20-25]. In May/June 2017, the Claimants called for a list of documents which were being retained, and the Defendant created a USB of copies of hard copy documents which were being retained for the purpose of the investigation. As Mr Pierce said in para. 71 of his statement dated 21 October 2021, a USB device containing a copy of all scanned documentary exhibits which were reasonably practicable to copy was delivered on 21 July 2017 to the Claimants' legal representatives.
(2) He said that instead of doing it in tranches, "we decided to keep all of the material, photocopy all of the material, undertake that review of the material, identify material that had evidential value and then we went through the returns process which took place after September 2017." [T16 /114/10 23]
(3) Hard copy materials were not returned because "we needed to understand the nature of the material that had been seized. We didn't know whether it was sufficient for us to maintain a copy or whether we needed to retain the originals, and from my experience of dealing with other cases we've always followed that process of copying the material, reviewing the material and then making decisions upon return as quickly as we can. The issue we had in this case was the volume, which was significant." [T 16/120/16 121/1];
(4) He said that the final decision cannot be made until the end. "You have to wait until that process has been completely finalised. So the process to follow would be to review all material that is held before you can actually make that decision." [T16/121/5 12] There was also the problem about returning copies that they in turn may contain original writing or other marks which might make it necessary to treat them as if they were originals.
(1) If the facilities of the Defendant were limited, there was no good reason why the photocopying of documents could not have been sub-contracted. In that event, the photocopies could have been obtained within a relatively short time.
(2) It was not an answer to take cost into account if the exercise could have been carried out faster. Competing demands for finite resources should not be an answer. If there were not sufficient facilities in the laboratory, better facilities should have been obtained. If there were not enough technicians able to expedite the process, they should have been hired.
(3) There was no good reason why photocopies could not have been made on a rolling basis even if the Defendant was not prepared to hand back originals until all the material had been reviewed [T16/114:10-T16/115/9]. No review had to be undertaken before a document was photocopied.
(g) Observations
(1) the nature of the investigation;
(2) the volume of material seized;
(3) the technological challenges;
(4) the availability of a dedicated laboratory facility, staffed by appropriately qualified personnel.
(1) Wishing as far as possible to prove points with the benefit of original documents. In a criminal case of this complexity, it is often important to retain originals. It is frequently the case that a defendant requires an original document to be proven, and so letting go of a potentially important original document could harm a case. The notice to prove about 300 matters was a sign, not unexpected, that this might be expected of the Defendant by the Claimants. In order for this to be possible, it would entail being on the safe side and keeping hold of original documents. This consideration is to be seen in the context of the unusually large number of documents which have been the subject of the search.
(2) The Court was referred by the Defendant to a very different kind of case on the facts, namely Holding v Chief Constable of Essex Police [2005] EWHC 3091 (Admin). This concerned the holding on to documents for 112 days, where there were relatively few documents. One of the reasons why the Court found (HH Judge McCahill QC at [64-65]) against the claimant in that case was that the prosecution " was entitled to protect its position by retaining, in original form, all that was necessary to prove its case to the fullest extent required, and thereby avoid any problems which might present themselves by not having the original item at court."
(3) Wishing to complete the assessment of the gathering of evidence, not simply physically, but also in terms of the appraisal of the evidence. Before dismissing as irrelevant any documents, and especially original or best copy documents, the Defendant wished to assess their relevance in the context of the whole rather than in a piecemeal way. A document which in isolation may not appear relevant may assume a different character in the context of the documents as a whole or may set off a train of inquiry when appraised at a later stage.
(4) Although the analysis of the electronic documents would continue for a long time beyond the selection of the hard documents to be returned and to be copied only, it was necessary for the Defendant to appraise something of the electronic documents too in order to make the decision as to how to make selections in respect of the hard copy documents.
(5) The documents require very detailed attention in order to appraise the extent to which they assist in proving that front-end representations were made. That by itself would not suffice because it is necessary to prove the precise terms of such representations, how they were systemic and the extent to which they support the case that the system was at the instigation or with the connivance of the suppliers and the brokers such as to prove that the brokers were not independent.
(6) An example of the complexity has become apparent in the course of the trial in respect of Mr and Mrs Maybury who gave evidence. Despite documents being revealed containing front-end conversations (hitherto denied and documents showing at lowest a reluctance to disclose recordings)[3], this correspondence has not deterred the vigour of the cross-examination of Mr and Mrs Maybury designed to show that they were making up or exaggerating their case about fraudulent misrepresentation. This included a challenge that Ms Maybury was not being truthful in seeking to attribute her mental health problems to the Claimants' behaviour. It is not at this stage necessary to form a judgment as to whether the case of fraud will prevail, but this is a useful example of how important it is to be able to prove each point. Any complacency for a potential prosecutor to base the case on finding isolated examples would be dangerous in the face of such determined resistance.
(1) The fact that it was not specifically sought by the Claimants until at earliest May 2017, and when it was sought, the Defendant responded in a sufficiently timeous manner;
(2) The retention of copy documents was much less significant than the retention of hardware required in order to search the data;
(3) The need to exercise vigilance not to return even copy documents which contained markings or which might contain markings on them which themselves were originals;
(4) The extent of other work in the process of greater importance, and the need to devote the resources to other tasks.
(19) Did the Defendant retain for any period originals of hard copy documents where a photograph or copy would have sufficed contrary to PACE, s.22(4)?
In view of the analysis, I find that the Defendant did not retain originals of hard copy documents where a photograph or copy would have sufficed. The Defendant was entitled to hold on to originals until all the material had been reviewed, bearing in mind that nothing other than originals might suffice in order to prove the case in a criminal case.
(20) Did the Defendant put in place arrangements to ensure that:
(a) Property (including IT equipment) seized pursuant to s.50 CJPA was the subject of an initial examination as soon as was reasonably practicable after the seizure; and/or
(b) That property that the Defendant was not entitled to retain was returned as soon as was reasonably practicable, as required by s.53 CJPA?
(21) Was property that the Defendant was not entitled to seize or retain and IT equipment returned as soon as was reasonably practicable?
As regards Issues 20 and 21, a huge quantity of material was lawfully seized by the police and was thereafter passed to the Defendant for the purposes of the investigation. It was obvious that examination of the same would necessarily take a substantial period of time. To minimise disruption to the Claimants, the Defendant liaised with the Claimants' representatives and agreed the priority order in which items would be examined and returned. The servers and IT equipment were the subject of initial examination and were returned as soon as reasonably practicable. This was in liaison between the Defendant and the Claimants' representatives who recognised that the items of most importance to the Claimants' business activities were the servers which had been removed from the premises. These were examined and returned on a rolling basis from 1 August 2016 to 18 August 2016.
The enormity of the remaining documents is such that they had to be copied and then considered in the manner set out above. These items took much longer to return, but they were returned as soon as was reasonably practicable in all the circumstances. The Defendant was entitled to retain the original of hard copy documents as it did instead of obtaining copies and returning the original. Further, it has not been proven that items were seized which went beyond the scope of the Search Warrants.
(22) Is it an abuse of process for the Claimants to bring claims concerning delays in the return of property and/or are the Claimants estopped as a result of the s.59 application made to the Preston Crown Court in September 2017?
In view of the answer to Issues 19 to 21 above, the question of abuse of process does not require to be determined.
(23) Having regard to the answers to Issues 19 to 22 above:
(a) is the Defendant liable to the Claimants in respect of the torts of trespass and or conversion in respect of the retention and handling of any item of property beyond the time at which it should have been returned.
(b) is the Defendant liable under section 6 -7 of the HRA 1998 for breaching the rights of the Claimant pursuant to Article 8 and Article 1 of Protocol 1 of the Convention in respect of the retention and handling of any item of property beyond the time at which it should have been returned?
In view of the answer to issues 19-21, there was no liability.
(h) Treatment of LPP material obtained on execution
(1) any material suspected of containing LPP material was required to be isolated and reviewed by a lawyer independent of any of the authorities involved in the execution of the Search Warrants;
(2) no member of the investigative or prosecution team should have had sight of, or access to LPP material;
(3) proper records should have been maintained to show the way in which the LPP material was handled, who had accessed it, and how decisions had been taken in relation to it.
(i) Legal framework
A29. The CJPA 2001 enables an investigator to seize relevant items which contain LPP material where it is not reasonably practicable on the search premises to separate LPP material from non-LPP material.
A30. Where LPP material or material suspected of containing LPP is seized, it must be isolated from the other material which has been seized in the investigation. The mechanics of securing property vary according to the circumstances; "bagging up", i.e. placing materials in sealed bags or containers, and strict subsequent control of access, is the appropriate procedure in many cases.
(j) The evidence and discussion
(i) The execution was by the Lancashire Constabulary and not the Defendant and there is no responsibility of the Defendant for the acts of the police in this regard.
(ii) In any event, the Lancashire Constabulary had proper procedures in place for dealing with LPP material.
(iii) Even if the Defendant was responsible for taking away material potentially covered by LPP, there was no liability because it was impracticable to separate the information at site. A proper procedure of having the material reviewed by external counsel was undertaken.
(iv) I reject any complaint to the effect that the proper procedures were not followed.
(v) The Defendant does have responsibility from the point that the material was taken away. It discharged its responsibilities at all times.
(vi) There is therefore no liability on the Defendant in respect of the LPP material.
The issues relating to LPP material are set out in the list of issues 24 onwards. They now follow.
(24) Did the Defendant act beyond the powers conferred by the Search Warrants and s.50 in reviewing and/or seizing material covered by LPP?
(25) Did the Defendant breach the Attorney General's Guidelines in respect of the handling of material subject to LPP?
(26) Did the Defendant return LPP material which was seized as soon as was reasonably practicable after the execution of the Search Warrants?
(27) Is it an abuse of process for the Claimants to bring claims in respect of the seizure, retention and handling of LPP material other than via the s.59 applications made to Preston Crown Court in September 2017?
(28) Having regard to the answers to Issues 24 to 27 above:
a) Is the Defendant liable to the Claimants in respect of the torts of trespass and/or conversion in respect of the seizure, retention and handling of LPP material?
b) Is the Defendant liable under ss.6-7 of the HRA 1998 for breaching the rights of the Claimants pursuant to Article 8 and Article 1 of Protocol 1 of the Convention in respect of the seizure, retention and handling of LPP material?
XII The judgment of HH Judge Knowles QC in Preston Crown Court
XIII Conclusion
Note 3 These documents have been discussed above in the context of the section about misfeasance and in particular referring to email correspondence between Mr Chapman and Mr Aspinall of 24 July 2014. [Back]