AL v SFO - Deferred Prosecution Agreements, Legal Professional Privilege and disclosure

AL v SFO - Deferred Prosecution Agreements, Legal Professional Privilege and disclosure

Neil Hawes QC, along with James Horne (No 1 High Pavement, Nottingham and Associate Tenant at Charter) and with Tim Owen QC (Matrix), instructed by Irwin Mitchell LLP, appeared on behalf of the applicant in this important judicial review; AL v SFO- Approved judgment. 19.04.18. Neil and James are instructed on behalf of an individual charged with conspiracy to corrupt and bribe. Henry Grunwald OBE QC is instructed for a co-defendant by Shoosmiths LLP.

The judgment is the first time the courts have examined potential breach proceedings arising from a deferred prosecution agreement (‘DPA’) against a company. A DPA was agreed in 2016 (see: SFO v XYZ [2016] Lloyd’s Report FC 509 & 517) In the present case, the potential for breach proceedings arose out of the prosecution’s disclosure obligations to the claimant in the outstanding parallel criminal proceedings.  In particular, the court examined the question of legal advice and litigation privilege claimed to be connected to documentation created by a firm during its investigation at the company, which had led to a self-report and a negotiated DPA. The court considered Three Rivers No.6, RBS Litigation, ENRC and Jukes and found that the SFO’s approach to legal professional privilege (‘LPP’) was flawed. The SFO’s stance on LPP had changed through the proceedings, but during the judicial review proceedings, the SFO had submitted that the LPP claim was not “obviously invalid”. The court found that the SFO had erred in their duty to assess the company’s claim properly and nor did it provide any sort of reasoning to support its conclusion.

Whilst the court concluded that judicial review was not available to the applicant, at present, if no effective remedy could be provided to the applicant in the Crown Court proceedings, the High Court reserved the power to reconsider whether to grant the relief sought.  The High Court found, but for the issue of jurisdiction, it would have quashed the SFO’s decision and remitted the issue back for further consideration due to serious procedural flaws.

The court was critical of the SFO’s approach to the resolution of privilege, and the approach it had taken to obtaining the specific disclosure the claimant was requesting. “In short”, the judgment concluded, “the SFO failed to address relevant considerations, took into account irrelevant matters and applied the wrong legal test to the assessment that it made. These public law errors were material. If, on proper analysis no privilege applies (either per se or because of waiver) then XYZ Ltd should simply disclose the interview records forthwith.”

In a separate ruling, the Court declined to make an order for costs against the claimant notwithstanding that the claim failed because on all the substantive issues the claimant had prevailed.

This is the first time the courts have considered the practical consequences of a DPA following a court sanctioned agreement, and where that agreement impacts on a human defendant in parallel criminal proceedings. It is important to both advisers who are dealing with negotiations that may lead to a DPA and to those who advise individuals arising out of corporate internal investigations.

Charter Chambers regularly advises and appears for companies and individuals in such circumstances: see

Due to those pending criminal proceedings, there are important reporting restrictions in place under s.4(2) Contempt of Court Act 1981 and paragraph 12, schedule 17, Crime and Courts Act 2013 (the relevant DPA legislation). Publication is therefore strictly limited to the facts contained within the various redacted judgments.