On 4 November 2022, in the case of FCA v Papadimitrakopoulos & Gryparis,1 the UK High Court reaffirmed the principle that information obtained via Mutual Legal Assistance (MLA) requests can only be used for the purpose for which it was obtained, as articulated in the terms of the request, absent consent from the overseas authority.
Background
Following an investigation into suspected offences of publishing false and/or misleading accounting information between November 2010 and October 2015, the Financial Conduct Authority (FCA) concluded that both Defendants (the former CEO and CFO of Globo plc) were criminally liable. However, the FCA was unable to pursue UK criminal proceedings because it was unsuccessful in its attempts to extradite the Defendants from Greece. In the alternative, the FCA sought to bring UK market abuse proceedings against the Defendants in the civil courts.
The Defendants sought to strike out the civil claim on the basis that, in its application, the FCA made use of material obtained via MLA requests without first obtaining the consent of the relevant overseas authorities, contrary to the prohibition against the collateral use of MLA material contained in section 9(2) of the Crime (International Co-Operation) Act 2003 (CICA 2003).
The Law
Under CICA 2003, UK authorities may request assistance in obtaining evidence from overseas authorities if there are reasonable grounds for suspecting that an offence has been committed, the suspected offence is being investigated and the assistance is being requested for use in that investigation.2
Evidence obtained through this process may not be used for any purpose other than that specified in the request, without the consent of the overseas authority. When the information obtained is no longer required for the specified purpose, it must be returned to the overseas authority.3
The Decision
After the Defendants sought to strike out the UK civil proceedings, the FCA provided evidence that it was standard practice for it to run dual-track criminal and civil investigations and asserted that the vast majority of the evidence obtained via the MLA process was not relied on in its civil claim, although it was used to inform the continuing civil investigation. The FCA claimed that, in any event, it had consent for collateral use from the relevant foreign authorities.
Specific purpose
The FCA submitted that the prohibition against collateral use applied to use in evidence and not to use in support of the investigation. The court found against this narrow interpretation and concluded that “use” should be read in line with its broad everyday meaning. This included use that informed the content of witness interviews.
Consent
The FCA contended that, regardless of whether it used the material in the manner otherwise prohibited by CICA 2003, it had the permission of the overseas authorities to do so. The FCA’s standard wording for MLA requests in criminal proceedings includes, “…[A]ny evidence obtained pursuant to this request may be used in any criminal prosecution or other judicial proceedings connected with this investigation, including any restraint or confiscation proceedings… .” The court found consent to a request in these terms did not equate to consent to the use of the material in civil proceedings that are not ancillary to the criminal proceedings.
Abuse but no strike-out
The court determined that the use of the requested material in these circumstances amounted to an abuse of process; however, the court declined to strike out the civil proceedings. A finding of abuse does not automatically result in a strike out, and any such finding must be balanced against the overriding objective and proportionality of the court’s response. It would be open to the court in the civil proceedings to admit the MLA material, notwithstanding that the overseas authorities had not consented to its use in those proceedings. Ultimately, it is still possible for the Defendants to receive a fair trial despite the abuse of process by the FCA and it is in the public interest that the FCA can pursue a claim that it described as having overwhelming merit.
To achieve a compromise position that served to reprimand the FCA but fell short of a strike out, the court ruled that none of the material obtained via the MLA request would be admissible in the civil proceedings and that the materials must be quarantined from the team conducting the civil proceedings.
Analysis
The judgment is a warning to the FCA and other UK law enforcement agencies with civil and criminal enforcement powers to be cautious when pursuing MLA requests in the context of a dual-track multi-jurisdictional investigation. Agencies should either obtain specific consent from the overseas authorities to the use of MLA material in both criminal and civil proceedings or impose an information barrier between separate teams running the two investigations.
The judgment is also a timely reminder to investigators about the importance of drafting MLA requests with respect to one suspect or suspected offence in a way that anticipates the potential use of that information in bringing different charges against the suspect or bringing proceedings against different suspects. Likewise, those representing individuals or companies in multi-jurisdictional investigations should carefully examine the terms of any MLA requests and ensure that the use of any MLA material is consistent with the terms of the request as strictly defined.
1 [2022] EWHC 2792 (Ch), 2022 WL 16720354.
2 CICA 2003, section 7.
3 CICA 2003, section 9.
