20 June 2013

In a small victory for the Government, the High Court has allowed the Serious Fraud Office (SFO) to withdraw a previous admission that it had committed trespass as a result of executing unlawful search warrants against the Tchenguiz brothers.

In Judicial Review proceedings ([2012] EWHC 2254), the Divisional Court determined that in March 2011 the SFO carried out unlawful entry, search and seizure at the homes and business premises of Robert Tchenguiz and Vincent Tchenguiz. It consequently quashed the relevant search warrants. This followed the much criticised failure of the SFO’s investigation into the Tchenquiz brothers’ affairs.    

In the current proceedings, the brothers have turned the tables and are claiming damages of around £300 million from the SFO as a result of the alleged disastrous effect of the failed investigation on their business interests. Part of the claim is that the SFO committed trespass when they executed the warrants. When the trespass claim was first raised the SFO admitted liability on advice from its previous legal team – it changed teams and applied to withdraw the admission. 

The Court had to decide two issues in determining the application:

  • Did the determination in the Judicial Review proceedings preclude the SFO from disputing liability for trespass? 
  • If not, should the SFO be permitted to withdraw the admission of liability?

The Court decided both issues in favour of the SFO. The Court found that the decision in the Judicial Review proceedings did not determine any civil law claim for damages and consequently the SFO was not precluded from disputing liability for trespass. That is not to say that in principle Judicial Review proceedings could never determine a civil law claim, however in this case the Judicial Review proceedings had not in fact done so. 

As to the second issue, the Court concluded that the interests of justice demanded that the SFO be permitted to withdraw the permission. The Court found that there was no irremediable prejudice to the Claimants in allowing the withdrawal and the overriding objection of the civil procedure rules favoured the Court arriving at a decision that was correct at law rather than one based on an admission which may be incorrect at law. 

Of general interest is that findings against Government in Judicial Review proceedings may not automatically be relied upon to found similar civil claims for compensation depending on the way the administrative court has considered the issue. 

David Hall advises clients in connection with SFO and other prosecutions of white collar crime and associated civil cases.

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David Hall

David Hall Partner

  • Dispute Resolution
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  • Business Crime and Regulatory Investigations

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