The end of compulsory powers?

Adam Cowell discusses the implications of recent European case law which may put an end to effective compulsory powersSpecialist investigation agencies such as the Department of Trade and Industry, Serious Fraud Office, Inland Revenue, Health and Safety Executive and Financial Services Authority all use compulsory powers to obtain information and documents from companies and individuals.

Although there are anomalies between the powers of the agencies, the compulsion behind the power is usually the threat of contempt proceedings or criminal proceedings in respect of non-compliance.

The recent European Court of Human Rights (ECHR) case of JB v Switzerland (application no 31827/96) casts serious doubts on the future efficacy of such powers.The story so farIt is established law that the various compulsory powers (and sanctions for non-compliance) override the common law privilege against self-incrimination.

The traditional justification for this position is that the relevant investigations are fact-finding administrative enquiries, in which the primary purpose is not the gathering of evidence for use in any prosecution.

However, the Human Rights Act 1998 requires that UK courts comply with the European Convention on Human Rights, and that our law is interpreted consistently with the convention, where the privilege against self-incrimination is jealously protected.

In this area the leading cases are Funke v France and Saunders v UK.To avoid confusion it is important to differentiate between requests for statements and requests for documents.

It is also important to distinguish between the making of the request for the statement or document, the criminal prosecution or report for contempt for non-compliance and the subsequent use of statements or documents compulsorily obtained.The position in relation to statements obtained by compulsion is relatively straight-forward.

In Saunders, the relevant enquiry was undertaken by DTI inspectors, who compelled the applicant to answer questions.

Following the decision of Fayed v UK, the European court held that article 6 had no application in relation to such enquiries themselves, because they are only fact-finding exercises (although there is persuasive dissent on this issue from Judge Repik).

More importantly, the court found that any statement made under compulsion during such enquiries, including statements that are not obviously incriminating, cannot be used in any subsequent criminal proceedings.

The use of the DTI transcripts in the Saunders criminal case amounted to a breach of article 6.

To prevent further breaches, and comply with the convention, our law was changed and schedule 3 to the Youth Justice & Criminal Evidence Act 1999 now prevents the use in criminal proceedings of statements obtained by compulsion during special investigations (although curiously not Inland Revenue investigations).The position in relation to documents obtained by compulsion is more complicated.

In Funke v France the authorities suspected Funke of fraud and raided his home for evidence.

They discovered evidence of overseas bank accounts and requested that Funke provide statements in relation to those accounts.

Funke refused and was prosecuted and fined for his failure to produce the documents.

The ECHR found that this prosecution was 'calculated to compel the applicant himself to provide the evidence' and as such a breach of article 6.

Although Funke is primarily on prosecution for non-compliance, rather than use of documents, it is arguable that if bringing a prosecu-tion to compel production of documents is a breach of article 6, the prejudicial use of documents obtained by compulsion must also be a breach.

However, a difficult passage at paragraph 69 in Saunders - where the court was concerned with statements not documents - led some to doubt this proposition: '...the right not to incriminate oneself ...does not extend to the use in criminal proceedings of material which may be obtained from the accused by the use of compulsory powers, but which has an existence independent of the will of the suspect, such as, among other things, documents acquired pursuant to a warrant, breath, blood.'This suggested to some that documents which possess an existence independent of the subject, such as company documents, can, in fact, be used in criminal proceedings and that Saunders has drawn a crucial distinction between different types of self-incrimination, namely the provision of statements and the provision of documents.

As Judge Martens stated in Saunders, the passage implicitly overrules Funke.

Recent developmentsSince 1 October 2000, national courts invited to exclude documents obtained by compulsion have almost without exception referred to paragraph 69 of Saunders and declared that the documents in issue exist independently of the defendant and can be used in evidence.

One Crown Court judge went the other way and refused to allow the admission of DTI documents obtained by compulsion.The DTI appealed that decision and in Attorney-General reference (No 7 of 2000) (2001) The Times law reports, 12 April, the Court of Appeal favoured Saunders over Funke and, since the documents existed independ-ently of the defendant, they could be used at his criminal trial.This domestic authority has been immediately called into question by the ECHR decision of JB v Switzerland (App 31827/96) (12 April 2001) in which the European court appears to reaffirm Funke and also reconcile it with the difficult Saunders passage.

In JB, the Swiss tax authorities wanted 'information' and parts of the judgment imply that this case is about statements rather than documents, but it is clear that in the courts view 'the authorities were attempting to compel the applicant to submit documents which would have provided information'.

JB refused to provide the documents and was fined.

At the ECHR the Swiss government tried to rely upon paragraph 69 of Saunders, adding that providing documents was similar to providing blood or a tachograph and not the same as being forced to make a statement.

The court disagreed: '...the present case [production of documents] differs from such material [blood or tachographs] which, as the court found in Saunders, had an existence independent of the person concerned and was not therefore obtained by means of coercion and in defiance of the will of that person.'The court has apparently clarified paragraph 69 of Saunders by stating that the present case, which involves documents obtained by compulsion, is distinct from those other cases mentioned in paragraph 69, where the prosecution could use evidence relating to breath or blood.

It is noteworthy that the reference to documents in paragraph 69 itself is a reference to documents produced 'pursuant to a warrant', which are different from documents obtained by compulsion.

This explains why the documents referred to in paragraph 69 form part of the same group as blood and tachographs.

Documents obtained by warrant can be used in subsequent proceedings; those obtained by compulsion cannot.

Finally, the reference in Saunders to 'existence independent of the will' must mean 'existence as evidence', rather than 'physical existence'.

The issue is not whether the document existed as an object prior to the request, but whether it could exist as evidence without the request.

The new interpretation of Saunders and reaffirmation of Funke have considerable implications.

Any prosecution for failing to comply with a request for documents or a statement is itself a breach of article 6 (Funke and JB).

No statement obtained by compulsion can be used in any subsequent trial (Saunders).

By implication any attempt to use a document obtained by compulsion is a breach (Saunders/Funke/JB).

Surely this must mean the end of effective compulsory powers.Adam Cowell is a company regulation specialist partner at the London office of Irwin Mitchell