Are transcripts of witness interviews disclosable under CPR if they are also considered to be "confidential information" under S.348 FSMA ?

18/01/2007

The collapse of the splits market in 2001 led to investigations by the FSA, which included interviews with the defendants' employees and former employees, under statutory powers, and transcripts of those interviews were supplied by the FSA to the defendants. In 2003, the Jersey Financial Services Commission (JFSC) conducted its own review relating to split capital investment companies administered or marketed in Jersey. Again, employees of the defendants were interviewed in the course of the JFSC's inquiry and the transcripts were supplied to the defendants.
The claimant sought inspection of documents which comprised largely of transcripts of those interviews conducted by the FSA and the JFSC. The defendants withheld inspection of those documents and objected to their inspection on the basis that such inspection was prohibited by s 348 of FSMA 2000, and that disclosure would constitute a criminal offence. The claimant challenged the defendants' claim to withhold inspection of those documents pursuant to CPR 31.19, SI 1998/3132, on the basis that those documents were relevant to the issues in the present proceedings and satisfied the criteria for standard disclosure in CPR 31.6.
The Chancery Division of the High Court was asked whether s. 348 of the Act prohibited inspection of the transcripts and other documents supplied by the FSA to the defendants even if those documents did no more than record information provided by employees of the defendants to the FSA, being information which came to their knowledge in the course of their employment, if it did not, then where the secondary recipient was a company and the information obtained by the FSA was provided in interviews by employees of the secondary recipient, what constituted the prior knowledge of the company.
The defendants accepted that, if s 348 did not prohibit the inspection of transcripts and other documents supplied by the FSA in their entirety, the documents could be redacted so as to excise information not previously known to them. How-ever, they submitted that the cost and difficulty of doing so, particularly when set against the value of what would be left, would make that a disproportionate exercise, and that accordingly, the court should exercise its discretion under CPR 31.12 to refuse to order inspection.
Gloster J. held that "the right of a party to refuse inspection of a relevant document was that it would be disproportionate and the court's task under CPR 31.12 was to determine whether that was so. S 348 of the Act did not prohibit the disclosure by a secondary recipient of transcripts either of his own interviews with the FSA or of interviews by the FSA with present or former employees of the secondary recipient, insofar as the transcripts contained information already and independently known to the secondary recipient. A company could only have knowledge through the knowledge of its officers, employees or other agents. If, as had been decided, an individual secondary recipient was not prohibited from disclosing a document supplied by the FSA and containing information already known to him, it should follow that the same applied to a corporate secondary recipient, applying the rules of attribution. In those circumstances, transcripts of interviews with present and former employees of the defendants were disclosable by those companies in those proceedings, except and to the extent that they contained information which was not previously known to them, applying for that purpose the ordinary rules of attribution. The exceptional material would therefore be either confidential information (as defined) put by the FSA to the interviewee or information known to the employee but not attributable to his employer. Having considered the relevant matters, the balance of likely value as against the problems associated with redaction favoured an order for inspection, rather than a refusal of inspection.
The claimant would be permitted inspection of the documents in issue, subject to redaction in accordance with the relevant principles."
([i]Real Estates Opportunities Ltd v Aberdeen Asset Managers Jersey Ltd and others[2006] EWHC 3249 (Ch))

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