QUEENS BENCH DIVISION
London, WC2A 2LL
B e f o r e :
THE HONOURABLE MR JUSTICE MACKAY
| THE QUEEN on application of
KENT PHARMACEUTICALS LIMITED
|- and -
|THE DIRECTOR OF THE SERIOUS FRAUD OFFICE
|- and -
|SECRETARY OF STATE FOR HEALTH
Smith Bernal Wordwave Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
Mr D Perry, Mr M Lucraft (instructed by Treasury Solicitors) for the Defendant
Philip Jones (instructed by Peters and Peters, Solicitors) for the Interested Party
Crown Copyright ©
Mr Justice Maurice Kay :
"…search for the following documents including information recorded in any form from July 1997 through to December 2000 which appears to relate to any matter relevant to the investigation into the production, supply and pricing of penicillin-based antibiotics".
(A large number of companies were then named in an Appendix to the warrant as "entities relevant to the investigation"). The warrant then continued-
"the information includes:
(a) Examples of identical or similar schedules and correspondence to those provided to the investigation.
(b) Material which is relevant to the meetings at which it is alleged that the conspiracy was discussed: This includes reception logs, diaries, agendas, set up paperwork including invitations, papers for discussion, minutes or notes.
(c) Correspondence, e-mails, faxes, notes of telephone conversations between any entity and the primary relevant groups set out above and any entity in either the primary or the secondary relevant group set out above including in particular communications involving [15 named individuals] together with any corresponding internal file notes.
(d) Material relating to the auditing to the sales of antibiotics including audit working papers and the reception logs.
(e) Evidence of all payments and receipts between any entity in the primary relevant group set out above and any entity in either the primary or secondary relevant group set out above and accompanying explanatory invoices, payment instructions, receipt records and correspondence. Such evidence will be contained in nominal (also known as general) ledgers, purchase ledgers, sale ledgers, cashbooks and bank statements.
(f) Price lists for penicillin-based antibiotics.
(g) External penicillin-based antibiotics market data from e.g. Intercontinental Medical Statistics or Generics Monitor internal penicillin-based antibiotic market data including volumes and values of sales and customer lists. In addition any documents which evidence the sharing of market data between any entity in the primary relevant group set out above and any entity in either the primary or the secondary relevant group set out above.
(h) Memoranda, file notes of instructions, notes of telephone conversations, e-mails to/from the sales force concerning availability or withholding of stocks, prices to wholesalers and pharmacies, special offers, discounts.
(i) Board minutes of any entity in the primary relevant group set out above.
(j) Correspondence notes of phone calls, faxes, e-mails to the Prescription Pricing Authority and any other arm of the DoH relating to prices, stock and supply.
(k) Communications and internal documents concerning the reasons and explanations for rises in the price of generic drugs including those with the DoH and to or from the British Generic Manufacturers Association (BGMA).
Authority is hereby given for any constable to enter using such force as is reasonably necessary for the purpose and search the said premises on one occasion only within one month from the date of issue of the warrant and take possession of any documents appearing to be documents of the description referred to above (other than those documents which any person would be entitled to refuse to disclose or produce in the High Court on the grounds of legal professional privilege) or take in relation to any documents so appearing any other steps which may appear to be necessary for preserving them and preventing interference with them."
"It states that the information recorded is to be "in any form from July 1997 through to December 2000"; it is to relate to any matter relevant to the investigation into (and this is the important part) "the production, supply and pricing of penicillin-based antibiotics". It identifies the bodies referred to".
He held that the nature of the events to which the investigation related was identified with sufficient particularity and added:
"A document of this nature has to be approached with a sense of proportion to the type of issues which are embraced by an investigation of this scale.
The words "including" or "includes" have to be treated in a restrictive manner. What is specified thereafter is non-exhaustive, but it clearly gives a sufficient definition to the nature of the investigation and the nature of the documents which are being sought to comply with the requirements of Section 15 [of the Police and Criminal Evidence Act 1984]".
We now turn to the present grounds of challenge.
Ground 1: Unlawful seizure
Section 2(5) of the Criminal Justice Act 1987 reads:-
"(5) The warrant referred to above is a warrant authorising any constable –
(a) To enter (using such force as is reasonably necessary for the purpose) and search the premises, and
(b) To take possession of any documents appearing to be documents of the description specified in the information or to take in relation to any documents so appearing any other steps which may appear to be necessary for preserving them and preventing interference with them.
(6) Unless it is not practicable in the circumstances, a constable executing a warrant under sub-section (4) above shall be accompanied by an appropriate person.
(7) In sub-section (6) "appropriate person" means –
(a) A member of the Serious Fraud Office; or
(b) Some person who is not a member of that Office but whom the Director has authorised to accompany the constable."
The Police and Criminal Evidence Act 1984 in its relevant parts reads:-
"19(3) The constable may seize anything which is on the premises if he has reasonable grounds for believing –
(a) That it is evidence in relation to an offence which he is investigating or any other offence; and,
(b) That it is necessary to seize it in order to prevent the evidence being concealed, lost or destroyed."
KP responds to this by arguing that the first judicial review proceedings did not lead to a "final decision". In R v Secretary of State for the Environment ex parte Hackney LBC  1 WLR 592 issue estoppel had been raised against the Defendant. In the Court of Appeal, after having held that on the facts of the case it did not arise as a defence, Dunn LJ approved, by the way, the Judgment of the Divisional Court in that case, which had been to the effect that issue estoppel did not as a doctrine apply to applications for permission to apply for judicial review; however, there existed a discretion, as he put it "in the interests of finality", not to allow issues to be relitigated.
"I also took note of one meeting in December 19977 which particularly referred to Warfarin. I was aware from the briefing that there was an investigation into Warfarin. I therefore seized the file" [of board meeting papers and minutes for KP for 1997].
The document is pleaded in the civil proceedings as evidence of Goldshield's manipulation of the price of Warfarin and is therefore plainly relevant to the Warfarin investigation. KP objects that, while it might have been seized under Section 19, that is not the basis upon which the officer seizing it "appears to have been operating". That is not how we read his evidence. His view was that all the documents he personally seized fell within the warrant or within Section 19, that the blue file in which 'M' was contained had papers and minutes for 1997 covered by the warrant, but he also noted the particular meeting recorded in 'M' which specifically referred to Warfarin. It is therefore a necessary and easy inference to be drawn on our reading of his evidence that he was relying on his Section 19 powers when he took this document and that he was entitled so to do.
"I believe that the documents were evidence connected to the suspected offences or other offences. I therefore seized the ….Agreements …..".
They were marked as having been seized under Section 19 of PACE. The complaint made in respect of this seizure is that there is no evidence that the officer addressed his mind to the requirements of Section 19, that the document is not evidence in relation to any offence and there could not have been reasonable grounds for concluding the contrary. The SFO argue that the construction to be placed on this document was a matter for the officer to form an opinion on and that he plainly formed the opinion that they were at least potentially relevant to the investigation as to Warfarin and about which he was briefed. We do not consider that there is any force in the objection to this document; it is of course entirely capable of bearing an innocent explanation but there were also reasonable grounds for seizing it under Section 19 in our judgment.
"The officers are not, for example, required to be satisfied that there are reasonable grounds for believing that the material sought does not consist of or include items subject to legal professional privilege".
Analogously, therefore, the SFO contends that the officer seizing this particular document did not have to give any detailed explanation of his thought processes as to why he considered this document relevant. As a matter of fact it establishes KP's ownership of the Warfarin label which is self evidently relevant to any investigation centred on manipulation of the price of that product. In our judgment the omissions in the evidence relied on by KP are not valid and do not render this seizure unlawful. We reject the criticisms in respect of the seizure of this document.
Ground 2: the discretion point
"information obtained by any person in his capacity as a member of the Serious Fraud Office may be disclosed by any member of that office designated by the Director for the purposes of this subsection –
(a) to any other government department….. "
The case for KP is that, there being an admitted interference with its Article 8 rights, the interference cannot be justified under Article 8(2) because the disclosure was not "in accordance with law". In this context, Mr. Isaacs submits that the disclosure was on the basis of a discretion which is conferred in terms which fail to identify the scope and manner in which it may be exercised and the grounds which would warrant its exercise. He relies on two Strasbourg authorities. In The Sunday Times v. United Kingdom (1979) 2 EHHR 245 the Court said (at p 271):
"In the Court's opinion, the following are two of the requirements that flow from the expression 'prescribed by law'. First, the law must be adequately accessible: the citizen must be able to have an indication that is adequate in the circumstances of the legal rules applicable to a given case. Secondly, a norm cannot be regarded as a 'law' unless it is formulated with sufficient precision to enable the citizen to regulate his conduct: he must be able – if need be with appropriate advice – to foresee, to a degree that is reasonable in the circumstances, the consequences which a given action may entail. Those consequences need not be foreseeable with absolute certainty: experience shows this to be unattainable. Again, whilst certainty is highly desirable, it may bring in its train excessive rigidity and the law must be able to keep pace with changing circumstances. Accordingly, many laws are inevitably couched in terms which, to a greater or lesser extent, are vague and whose interpretation and application are questions of practice. "
The second authority, Domenichini v. Italy (1996) 32 EHRR 68, was concerned with the monitoring of the correspondence of prisoners, including legal correspondence. The relevant Italian law permitted such monitoring if a judge, in his discretion, ordered it in a reasoned decision. The Court said (at paras 32-33):
"The Court reiterates that while a law which confers a discretion must indicate the scope of that discretion, it is impossible to attain absolute certainty in the framing of the law, and the likely outcome of any search for certainty would be excessive rigidity. In this instance, however, Law No 354 leaves the authorities too much latitude. In particular, it goes no further than identifying the category of persons whose correspondence may be censored and the competent court, without saying anything about the length of the measure or the reasons that may warrant it. The gaps in….the Law weigh in favour of rejecting the Government's argument.
In sum, the Italian Law does not indicate with reasonable clarity the scope and manner of exercise of the relevant discretion conferred on the public authorities, so that Mr. Domenichini did not enjoy the minimum degree of protection to which citizens are entitled under the rule of law in a democratic society. There has therefore been a breach of Article 8."
Mr. Isaacs seeks to place his argument four square on this passage. He submits that the present case is, if anything, stronger. In Domenichini the discretion was vested in a judge who was required to give a reasoned decision. There are no such checks in the case of section 3(5)(a). The discretion is unrestrained and unconditional when exercised in this way. It is not "in accordance with law", in the sense of the Strasbourg jurisprudence. When pushed, Mr. Isaacs maintains that he is not arguing incompatibility in the sense of section 4 of the Human Rights Act 1998, although it seems to us that the argument comes very close to that.
Ground 3: fairness
"In order to safeguard the interests of the individual, it is, in my judgment, desirable that, where the police are minded to disclose, they should, as in this case, inform the person affected of what they propose to do in such time as to enable that person, if so advised, to seek assistance from the court. In some cases, that may not be practicable or desirable, but in most cases that seems to me to be the course that should be followed."
In Regina v. Chief Constable of North Wales Police, ex parte Thorpe  QB 396 the context was the sensitive one of disclosure of the past convictions of paedophiles to the public. Lord Woolf MR said (at p 428):
"Before reaching their decision as to whether to disclose the police require as much information as can reasonably practicably be obtained in the circumstances. In the majority of the situations which can be anticipated, it will be obvious that the subject of the possible disclosure will often be in the best position to provide information which will be valuable when assessing the risk."
Counsel also referred to Marcel v. Commissioner of Police for the Metropolis  Ch 225.
"Further material will be disclosed to you shortly concerning warfarin and penicillin based antibiotics."
Thus, KP's solicitors were on notice of the August disclosure from the end of July, a fortnight before the disclosure took place. However, they took no steps to influence, question or prevent it. Although the notice came from the DoH's solicitors rather than directly from the SFO, we do not consider that KP suffered any detriment as a result of the failure of the SFO to give notice of its intention to make further disclosure.
Ground 4: secrecy
"In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law."
Mr. Isaacs seeks to draw support from Golder v. United Kingdom (1975) 1 EHRR 524 and, in particular from the following passages from paragraphs 28 and 36 of the judgment:
"28…..Article 6(1) does not state a right of access to the courts or tribunals in express terms. It enunciates rights which are distinct but stem from the same basic idea and which, taken together, make up a single right not specifically defined in the narrower sense of the term. It is the duty of the Court to ascertain, by means of interpretation, whether access to the courts constitutes one factor or aspect of this right……
36…..the right of access constitutes an element which is inherent in the right stated by Article 6(1)……."
This principle is also illustrated by Tinnelly & Sons Ltd and McElduff & Others v. United Kingdonm (1998) 27 EHRR 249 where the Court said (at paragraph 77):
"The right guaranteed to an applicant under Article 6(1)…..to submit a dispute to a court or tribunal in order to have a determination on questions of both fact and law cannot be displaced by the ipse dixit of the executive."
However, it is to be observed that, as the Court stated in an earlier passage of its judgment in Tinnelly (paragraph 72):
"……this right is not absolute, but may be subject to limitations; these are permitted by implication since the right of access by its very nature calls for the regulation by the State. In this respect, the Contracting States enjoy a certain margin of appreciation, although the final decision as to the observance of the Convention's requirements rests with the Court. It must be satisfied that the limitations applied do not restrict or reduce the access left to the individual in such a way or to such an extent that the very essence of the right is impaired. Furthermore, a limitation will not be compatible with Article 6(1) if it does not pursue a legitimate aim and if there is not a reasonable relationship of proportionality between the means employed and the aim sought to be achieved."
This leads Mr. Isaacs to submit that (1) secrecy about the fact of a disclosure under section 3(5)(a) means that the very essence of the right of access is frustrated; (2) there was no legitimate purpose served by not informing KP that such a disclosure had been made to the DoH on 14 August; and (3) it was neither necessary nor proportionate that there should be no notice of such disclosure bearing in mind that the disclosure was to a government department to assist in the preparation of civil proceedings against KP and that on the occasion of the initial disclosure in January notice had been given. Finally, Mr. Isaacs seeks to draw an analogy with Marcel v. Commissioner of Police for the Metropolis  Ch 225 in which the Court of Appeal considered that, in domestic law, notification by the police to the owner of documents seized under PACE of their proposed disclosure to a third party for the purpose of civil proceedings is desirable.