Warrant to search law firm’s offices in Rangers fraud case was ‘oppressive’

The High Court of Justiciary Appeal Court has now published the opinion after Craig Whyte was acquitted of fraud in relation to his takeover of the club from its previous owners in May 2011.

The court observed that some of the documents were said to be legally privileged and therefore the terms of the warrant, which were wide in their description of the potential recoverable material, were “too vague to have sustainable validity”.

The warrant application

The Bill of Suspension by London solicitors’ firm Holman Fenwick Willan LLP and corporate financial advisors Duff & Phelps sought to suspend the warrant granted by a sheriff at Glasgow on 4 December 2015.

The Lord Justice General, Lord Carloway, sitting with Lady Dorrian and Lord Bracadale, heard that the petition for the warrant, which was not intimated to either complainer, narrated that, from information received, it appeared that various named persons were, in the period January 2010 to December 2013, involved in a “conspiracy”: to acquire Rangers by fraud; to trade in a fraudulent manner so as to bring about the administration; and to defraud the creditors by disposing of the assets at a discounted price.

The petition, which made no mention of the High Court indictments which had already been served, averred that there were “reasonable grounds” for believing that evidence material to the investigation was held in the first complainers’ offices.

But the procedure adopted in obtaining and executing the warrant raised a number of substantial issues in connection with: the scope of the warrant; the proper practice to be adopted when the Crown seek to recover papers likely to be the subject of a claim of legal privilege; the appropriateness of seeking a warrant of this nature from a sheriff after the service of a High Court indictment; the procedures available to enable a person to raise a claim of legal privilege and to have it determined expeditiously; and the application of Article 8 of the European Convention on Human Rights to such a warrant and its execution.

Full and frank disclosure

Notwithstanding that the signature on the warrant was that of a senior procurator fiscal depute and that this procedure was known to, and authorised by, the advocate depute in charge of the High Court prosecution, the circumstances justifying the warrant were described to the sheriff only by a police detective sergeant.

In addition to the issues raised in the Bill, the complainers argued that the sheriff had not been aware of the full background or of other material considerations.

In particular, the police officer did not, apparently, tell the sheriff of the ongoing High Court proceedings, although it was suggested that the sheriff may have been aware of the proceedings.

Legal privilege

Further, the sheriff was not told that it was highly likely that the warrant would encapsulate significant quantities of legally privileged material.

It was submitted that the warrant was a breach of the first complainers’ Article 8 right of respect for their private life and correspondence, as the grant and execution had not been “in accordance with the law” because legally privileged material had not been excluded from the search.

The Crown accepted that the police officer had not told the sheriff that there had been ongoing High Court proceedings, but the advocate depute argued that the obtaining of a warrant in such circumstances had been “competent”.

It was also accepted that the grant and execution of the warrant engaged the first complainers’ Article 8 right, but it was submitted that the interference pursued a“legitimate aim”, namely the prevention of crime, and that the interference was “proportionate” because of the availability of procedural safeguards to prevent abuse or arbitrary conduct.

Decision

However, the appeal judges passed the Bill and suspended the warrant.

Delivering the opinion of the court, the Lord Justice General said: “What is important to note is that the warrant was obtained for material over which there was an ongoing dispute about legal privilege. That dispute was taking place between the Crown, notably the advocate depute, and a firm of London solicitors, namely the first complainers. There is no suggestion that the first complainers were involved in any form of illegality. There was no averment that, in the context of the ongoing dispute, the first complainers would be likely to destroy, or conceal, the relevant material…In these circumstances, an application to a sheriff for a warrant to search the first complainers’ premises to recover this material, without intimation, was oppressive.

“There is no reason for a warrant to state expressly that materials, ostensibly covered by its terms, are excluded where legal privilege exists. Such privilege may or may not be asserted. If it is capable of being asserted, however, the seizure process must have within it clear, detailed rules on how that assertion can effectively be raised and determined. That is a matter which was stressed in the mid-nineteenth century Scottish cases cited. It is now reflected in the European jurisprudence.

“In a case, such as this one, where it is clear that what is to be searched is a solicitors’ office and that legal privilege is being asserted, any warrant ought either to have provided for independent supervision of the police search by a Commissioner appointed by the court or to have contained a requirement that any material seized should be sealed unread and delivered to the court to enable the sheriff to adjudicate upon the issue.

“The ability to raise a Bill in the High Court of Justiciary, designed to suspend the warrant itself, is a procedure for review by an appellate court which, whilst competent, is not straightforward. It does not supply the necessary effective remedy at first instance. If this necessitates a change of practice in connection with the recovery of solicitors’ files, such a change requires to take place.”

Lord Carloway added: “It was conceded that all that the Crown were seeking, at the point when the warrant was sought, was the material included in the original, but excluded from the revised, chronological bundle. In these circumstances, the terms of the warrant, which are limitless in date and wide in their description of the potential recoverable material, are too vague to have sustainable validity; hence, presumably, the seizure of 47 boxes. On this basis also, the warrant granted was oppressive.”

Given the passing of the Bill, the Article 8 point did not require to be determined.

The complainers subsequently applied for the expenses of the Bill.

In a separate opinion, the court made an award of expenses modified to £10,000.