FCA search warrant quashed: A reminder of the need to check orders and warrants

Following judicial review proceedings, the Administrative Court has ruled that a warrant obtained by the Financial Conduct Authority (FCA) to search the home of a practising barrister in the context of a fraud investigation was unlawful.

Background

In 2020 the FCA opened an investigation into an overseas company for offences under the Financial Services and Markets Act 2000 (FSMA) and fraudulent trading. The FCA suspected the overseas company was involved in making false claims against deceased homeowners to obtain default judgments that could be enforced against their property.

The overseas company was incorporated by three individuals, one of whom was a practising barrister in England and Wales (the Claimant). 

Following a review of materials obtained during initial searches, the Claimant became the subject of a conspiracy to defraud investigation led by the FCA. 

The warrant 

On 4 September 2024, a warrant was sought in relation to the new investigation. The Claimant consistently denied any wrongdoing, maintaining his advice was provided solely in a professional capacity. 

The Metropolitan Police (the Police), acting on behalf of the FCA, applied for and obtained the warrant under section 8 of the Police and Criminal Evidence Act 1984 (PACE). The application set out that the Claimant was suspected of conspiracy to defraud by false representation and offences under FSMA and appropriately fulfilled the “access conditions” required for the issuance of a warrant under section 8 of PACE.

Section 8 PACE contains a proviso that a warrant cannot be granted in respect of items which are reasonably believed to be subject to legal professional privilege. Although it was clear in the application that it was ‘highly likely’ that documents stored on the Claimant’s devices would attract legal professional privilege it was stated that this material would be filtered and not accessible by the investigations team. 

Warrant quashed 

The Claimant applied for judicial review of the Court’s decision to grant the section 8 warrant on the basis that the entry, search and seizures made in execution of the warrant were unlawful.

The FCA and Police acknowledged that it was inevitable that the Claimant’s seized devices would contain documents that attracted legal professional privilege. This was clear in the application itself and although the FCA did not intend to mislead the Court, Lady Justice Yip and Mr Justice Griffiths found that the Judge was ‘misled in the way the application was presented’. The Court did not agree that the FCA had acted in bad faith and stated that “Their failings represent a lack of rigour rather than any deliberate misconduct”. 

The correct legal route for this application would have been the special procedure under Schedule 1 to PACE, which is required where the circumstances demand a more rigorous process due to the likely presence of legally privileged material. 

The Claimant also sought the immediate return of all seized items, the destruction of any images or copies, and a permanent bar on the use of any material or information obtained. However, the Court refused to grant this order and instead ruled that the FCA and Police should be permitted to rely on section 59 of the Criminal Justice and Police Act 2001 enabling the Crown Court to decide on the issue of retention

Concluding remarks

This case serves as a helpful reminder of the need to carefully review search orders, production orders and other orders or warrants presented by law enforcement. It should not be assumed that simply because a law enforcement agency has an order, that it does not need to be carefully scrutinised. On occasion it is something as simple as an incorrect address or wrong date which can invalidate an order; on other occasions it is a more complex legal basis, such as in this case. 

The need to scrutinise orders is particularly important to bear in mind in the context of a dawn raid or other unannounced visit from a law enforcement agency. Despite the pressure to respond quickly, the time must be taken to confirm the correct legal basis for the agency’s actions.

Read the full judgment here.

This article was prepared with the assistance of Polly Jeffery, Trainee Solicitor.