Private investigators are engaged because of their expertise in gathering information and, occasionally, because their clients wish to distance themselves from the means used to obtain that information.
The decision in David Hughes v Carratu International Plc  EWHC 1791 brings the relationship between private investigator and client into sharp focus, as does the Government’s proposals for custodial sentences for the unlawful trade in personal information. Both highlight the dangers of employing a private investigator under a vague or ambiguous retainer.
Hughes Bites Back
The Information Commissioner informed Mr Hughes in March 2006 that they had found his bank account details during a raid on an enquiry agent. This information is not publicly available and is normally obtained by either "blagging" the information from the bank or paying an inside source to disclose it. Both activities are a criminal offence under section 55 of the Data Protection Act 1998.
The enquiry agent had been instructed by a private investigator, Carratu, who in turn had been instructed by an unnamed law firm. Following an unsuccessful attempt to obtain further information via a subject access request, Mr Hughes issued an application under inter alia CPR 31.16 for disclosure of all documents held by Carratu relating to his personal financial affairs, the identity of the enquiry agent and the identity of the law firm for whom Carratu was acting.
Carratu contested the application for disclosure on the basis that there was insufficient material to show it or the law firm was likely to be party to subsequent proceedings.
During the application hearing it emerged that Carratu had received a fax from the enquiry agent containing Mr Hughes’ bank account details and the enquiry agent had obtained similar information in the past. Despite Carratu’s claim that the enquiry agent was instructed to only obtain information from the public domain and that it had immediately destroyed the offending fax, Tugendhat J stated there " there is reason to believe that there has been a serious breach of the criminal law. The enquiry agents .. appear to have been under the impression that [Carratu] (and so presumably [Carratu’s] client, the law firm) would not regard as unwelcome the receipt of the information which was obtained by those criminal means … There has been no explanation as to how the enquiry agents can have been under so serious a misunderstanding as to the wishes of [Carratu] that all information be obtained lawfully."
On this basis Tugendhat J concluded Mr Hughes had an arguable case against Carratu and the instructing law firm for a range of actions including breach of confidence and compensation under section 13 of the Data Protection Act 1998. Accordingly he ordered disclosure of all of the information sought by Mr Hughes, including details of the instructing law firm.
Custodial Sentences For The Unlawful Trade In Personal Information
This case comes at a time when the trade in unlawfully obtained information is under intense scrutiny. The Information Commissioner issued a special report, What price privacy? The unlawful trade in confidential private information , in May 2006 detailing the scale of this problem and proposing that the maximum penalty under section 55 of the Data Protection Act 1998 for unlawfully trading in personal information be increased to two years imprisonment. This was closely followed by a Consultation from the Department for Constitutional Affairs to implement this recommendation.
This sanction is available against every level of the supply chain. The What price privacy? report contains an example of a law firm which illegally obtained personal information through a chain of intermediaries. The Information Commissioner cautioned a partner at that law firm and reported him to the Law Society, which may result in further disciplinary action.
Essential Safeguards When Instructing Private Investigators
The key issue in any subsequent litigation by Mr Hughes (or prosecution by the Information Commissioner) will be the nature of the instructions given by the law firm to Carratu and Carratu to the enquiry agent, as evidenced by the retainers and subsequent course of dealings. If they show the enquiry agent was encouraged to obtain information about Mr Hughes illegally then this matter may be far from over.
In light of this there are a number of safeguards that should be employed before instructing a private investigator:
- ensure the private investigator is reputable and does not have a history of obtaining personal information illegally;
- use a written retainer that clearly obliges the private investigator not to obtain any personal information illegally and to ensure that any agents it instructs do likewise; and
- take immediate and effective steps if the information provided by that investigator appears to have been obtained illegally. At the very least the private investigator should be immediately suspended while the matter is investigated. Ideally, if the information was illegally obtained, the private investigator should be reported to the Information Commissioner. In addition, in some circumstances it may also be necessary to report the private investigator to the Serious and Organised Crime Agency under the Proceeds of Crime Act 2002.
The decision in David Hughes v Carratu International Plc  EWHC 1791 is available here
By Richard Cumbley and Peter Church