When it is alleged that a party has obtained information or documents by illegal or fraudulent means, difficult questions often arise:
- Can (or should) that information be used in Court proceedings?
- Are there effective sanctions and penalties for a party that obtains evidence illegally?
The Court of Appeal has given further guidance on these issues in what has been described as a landmark judgment in Imerman v Tchenguiz (29/7/2010). Although this has arisen in the context of divorce proceedings, it may have wide-reaching implications for all types of litigation.
Imerman v Tchenguiz (2010)
At the heart of this dispute was a divorce between Mr and Mrs Imerman, who married in 2001. Mr Imerman, a businessman, shared offices and a computer system in Mayfair with his then prospective brothers-in-law from 2003 until 2009. He petitioned for divorce on 30 December 2008 and was evicted from his offices seven weeks later by his brothers-in-law.
Fearing that Mr Imerman would conceal his assets for the purposes of the divorce, one of the brothers-in-law accessed the office servers and copied information and documents (including password-protected material), printing several lever-arch files and ultimately passing them to the solicitors acting for their sister in her divorce proceedings.
Mr Imerman sought an order that the lever-arch files (and any copies) be returned to him. In earlier ancillary proceedings, the Court decided that the files should be handed back to Mr Imerman to enable him to remove any privileged material, following which he would have to return the remainder of the files to his wife for her to use in the divorce proceedings. Mr Imerman appealed.
Competing Interests
There is a fundamental conflict of interest for the Court to grapple with when considering whether to allow evidence obtained unlawfully. On the one hand, there is a need to preserve a party's right to privacy and confidentiality. On the other hand, there is a need to ensure a just resolution to a dispute based on a truthful and comprehensive identification of the evidence (in this case the financial assets in the marriage).
Mr Imerman argued that the law should preserve his right to protect confidential documents, and said the law should impose sanctions for unlawful breaches of that right. Mrs Imerman argued that the law should ensure that her husband could not escape his true liability by concealing assets. She argued that "truthful disclosure" even if achieved by unlawful methods, should override any competing claim to privacy.
Relevant Considerations for the Court
Many principles of law and legislation come into play into this type of dispute, as they did in the Imerman case. These include:
- Article 8 of the Human Rights Act 1998, which establishes a right to respect an individual's private and family life, his home and correspondence;
- The Data Protection Act 1998, which operates to protect individuals in relation to the processing and free movement of personal data;
- The Computer Misuse Act 1990, involving criminal offences where information is surreptitiously downloaded from a computer;
- In the case of matrimonial disputes, the "Hildebrand" rules. Prior to Imerman, it had been thought that family courts under these rules would not penalise the wrongful taking and copying of documents, on the basis that there was an overarching duty on the parties to give full and frank disclosure.
The Court's Decision
The Court of Appeal, led by the Master of the Rolls, came down firmly on the side of Mr Imerman. It said it would not condone unlawful activity simply because it was feared that the other party will behave unlawfully and conceal that which should be disclosed. The law has a long-standing aversion to unlawful self-help, and it was not felt appropriate to abandon this long-held prohibition. It was not as if Mrs Imerman would have been without a remedy; if there was evidence of Mr Imerman's intention to hive off assets so as to deceive the Court, she could have applied for a wide range of Court sanctions, such as an order to search and seize; or freezing, preservation or other orders.
The Court of Appeal therefore ordered that the relevant files should be handed back to Mr Imerman's solicitors, and Mrs Imerman be restrained from using any of the information gained through reading the files.
Implications
The Court of Appeal has re-iterated its dislike for parties taking the law into their own hands and illegally helping themselves to information or documents simply due to a fear that the other party will engage in unlawful activity. It has directed that there are a number of applications one can make to address that fear. Adverse costs orders will usually follow for a party that simply takes matters into their own hands and breaks the law.
However, the Court also reiterated that evidence improperly obtained can still be used in Court. It acknowledged that the common law does not usually concern itself with how evidence is obtained when considering admissibility.
Previously, the Courts have recognised the conflicting public interests by exercising discretion on whether or not to allow in evidence obtained in dubious circumstances or even illegally. It will exclude admissible evidence obtained unlawfully "if it is in the interests of justice to do so". This discretion will usually be exercised in accordance with the significance or weight of the evidence in question, and with regard to the gravity of the law-breaking concerned. The Court of Appeal again endorsed this principle, but accepted that the necessary balancing exercise is often very difficult to put into practice in individual cases.
These issues frequently arise in "surveillance video evidence", where agents are instructed to video a Claimant without his/her knowledge in an attempt to defeat a fraudulent personal injury claim. As we have seen, fraud arising out of the recession continues to increase and Defendants will naturally want to consider ways of obtaining evidence to defeat what are suspected to be exaggerated or fraudulent claims.
It is important to exercise caution whenever a party is considering obtaining information secretly, or even illegally, no matter how important it believes that evidence might be to its case. The Imerman case reinforces the position that such evidence – perhaps obtained at great cost – might be of evidential value but might not be admissible before the Court. Even if it is, the Court may signal its disapproval of the evidence-gathering method used by making an adverse costs order. At the extreme, various forms of illegal evidence-gathering can constitute a criminal offence, punishable by imprisonment. A striking example of this was when the News of the World's Royal editor was jailed for hacking into the phone messages of Royals, their staff and other celebrities. This extreme, but salutary example, shows how far the Courts may be prepared to go to punish illegal evidence-gathering.
This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq
Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.
The original publication date for this article was 02 August 2010.
