Negligence - Duty to take care - Duty to safeguard against pure economic loss
An Informer v A Chief Constable: Court of Appeal, Civil Division (Lord Justice Pill, Lady Justice Arden and Lord Justice Toulson): 29 February 2012
Section 29 of the Regulation of Investigatory Powers Act 2000 provides, so far as material: '(3) An authorisation is necessary on grounds falling within this subsection if it is necessary - (a) in the interests of national security; (b) for the purpose of preventing or detecting crime or of preventing disorder; (c) in the interests of the economic wellbeing of the UK; (d) in the interests of public safety; (e) for the purpose of protecting public health; (f) for the purpose of assessing or collecting any tax, duty, levy or other imposition, contribution or charge payable to a government department; or (g) for any purpose (not falling within paragraphs (a) to (f)) which is specified for the purposes of this subsection by an order made by the secretary of state.
'[...] (5) For the purposes of this part there are arrangements for the source's case that satisfy the requirements of this subsection if such arrangements are in force as are necessary for ensuring - (a) that there will at all times be a person holding an office, rank or position with the relevant investigating authority who will have day-to-day responsibility for dealing with the source on behalf of that authority, and for the source's security and welfare.'
The claimant had approached the police and had told them that he had had financial dealings with a man, X, but had recently learned that X was involved in criminal activities. As a result of his contact, two 'contact handlers' were assigned to the claimant. At the first meeting, it was explained to the claimant the steps that the police would take to protect his identity and warned him that he had no authority to engage in any criminal activity. Authorisation was given under the Regulation of Investigatory Powers Act 2000 (RIPA) for the use of the claimant as a 'covert human intelligence source' (CHIS).
Over a substantial period of time, the claimant provided a good deal of valuable information to his police handlers regarding X and others. Some time after he began to provide information, the claimant signed a set of instructions prepared by the police (the document). The document stated that it was not intended to be legally binding but that the instructions were intended to protect the claimant, his handlers and the information that he provided. Apart from stating that the claimant's identity would be protected, it was silent regarding any responsibilities of the police. As a result of the information received, the police began an investigation into the activities of X and others. X was subsequently arrested and charged with serious offences.
The investigations included looking into X's dealings with the claimant. The police obtained production orders under section 34 of the Proceeds of Crime Act 2002 (POCA) against the claimant's bankers, solicitors and accountants. The production orders revealed that the claimant had misled bank staff and his solicitors about his sources of income and that the claimant was in the process of attempting to sell assets. The claimant was arrested on suspicion of money laundering. He was interviewed and released on bail. There was a meeting between the police officer in charge of the investigation and the officer in charge of the contact handlers in order to discuss the problems of information sharing and division of responsibilities in light of the fact that the claimant was both a CHIS and a suspect.
Further to the meeting a memorandum of understanding (MoU) was agreed (see  and  of the judgment). The investigating team subsequently obtained a restraint order against the claimant. The judge who made the order had no knowledge of the claimant's role as a CHIS, neither did the officer who applied for the order, nor the Crown Prosecution Service (CPS). The claimant's status as a CHIS was terminated, although he continued to contact his handlers to complain about the effect on him of the restraint order. After eight or nine months, the CPS decided not to bring criminal proceedings against the claimant. Some months after that, the restraint order was formally discharged. The claimant commenced proceedings, alleging that he had been reassured on a number of occasions by the police that his safety, welfare and livelihood were their first priorities and that his business would not suffer any adverse consequences by reason of his helping the police in their investigation.
Consequently, the claimant alleged, there had been a contract between them by which the police had undertaken a duty to ensure that, inter alia, his livelihood remained free from any adverse consequences arising out of his decision to co-operate with the police. Further, or alternatively, he alleged that the police had assumed a responsibility towards him in respect of the same matters and so owed him an equivalent duty of care in tort. He alleged that, following his arrest on suspicion of money laundering and the making of the restraint order, he had suffered economic loss through loss of the ability to deal with his assets as he pleased and psychiatric injury in the form of depression and post-traumatic stress disorder.
The judge accepted that, from the outset, the claimant had been given assurances that the police would treat his safety as a priority and that those assurances were intended to be legally enforceable and so had given rise to a contract. However, there had never been, nor could there have been, any suggestion that any police officer had been in breach of an obligation to treat the claimant's safety as a priority. Further, there had been no proper basis to conclude that the police had ever made a promise to the claimant that the claimant's livelihood or financial wellbeing would be treated as a matter of priority or otherwise safeguarded by the police.
As to the negligence claim, the judge noted that all of the losses claimed had been economic except for the alleged psychiatric injury and his findings in respect of the contract claim precluded a finding that the police had assumed responsibility for the avoidance of economic loss. He rejected all allegations of breach of duty of care except in relation to the obtaining of the restraint order and its duration. However, he concluded that an officer who was engaged in activity related to the investigation and suppression of crime was immune from a complaint of negligence as a matter of public policy under the doctrine in Hill v Chief Constable of West Yorkshire ( 2 All ER 238) (Hill) (the Hill principle) unless there was a factual basis for holding otherwise. In relation to the claimant's claim for damages for personal injury, the judge held that there was no basis for concluding that any of the acts or omissions about which the claimant had complained gave rise to a foreseeable risk of physical or psychiatric injury. The claimant appealed.
The issue for determination was whether the claimant, as a supplier of information to the police which led to a criminal investigation, was owed a contractual or tortious duty by the police to exercise reasonable care in the conduct of the investigation so as to safeguard him from economic loss. Consideration was given to the 'Covert Human Intelligence Sources Code of Practice' (the code) made pursuant to section 71 of RIPA. In support of his appeal, the claimant submitted, inter alia, that the judge had been wrong to apply the Hill principle to the instant case where there had been a special relationship between the claimant and the police by reason of the claimant having agreed to act, and having been accepted to act, as a CHIS. Consequently, a further issue arose as to whether, in the circumstances of the instant case, the Hill principle applied. The appeal would be dismissed.
r Toulson LJ: Section 29(5)(a) of the act, and the relevant provisions of the Code, did not define 'security and welfare' or 'safety and welfare'. The expressions were certainly apt to cover matters such as risk of death, injury or harassment. The imposition of a duty of care for the safety and welfare of the CHIS in that sense would be consistent with the purpose of the relationship being one of confidentiality. Given the physical risks to which a CHIS was exposed, it was just and reasonable that the police should owe a duty of care for the safety and welfare of a CHIS. However, it would not be fair, just and reasonable for the police to owe a duty of care that extended to general financial wellbeing. Further, given the purpose of the use by the police of informers, the prospective harm against which the police might be held to owe a duty of care towards a CHIS had to be limited to risks which were due to his conduct in assisting the police by giving them information about others. If the information raised, or led to a train of investigation which raised, suspicions of criminality on his own part, the police could not owe him a duty which would conflict with their duty to the public to investigate it (see , ,  of the judgment).
The principal duties of the police were the prevention and detection of crime. For many years the use of informers had been one of the means used by the police for that purpose. The purpose of section 29(3) of RIPA was not to provide the CHIS with an escape route from the legal consequences of any past offence which he might have committed or from the investigation of criminality of which there might be grounds for suspicion. That would be contrary to the public interest in the detection and, where appropriate, prosecution of crime. The relationship between the CHIS and the police was a confidential relationship.
The confidentiality served to give the CHIS safety and peace of mind and to encourage the supply of information to the police by people who might not otherwise come forward unless they could be confident that their confidentiality would be protected. Neither RIPA nor the code were framed in such a way as to give rise to an action for damages. However, they did show that parliament was concerned that those responsible for handling a CHIS should have regard to any foreseeable risks to his security and welfare that arose from that confidential relationship (section 29(5)(a) of RIPA) (see - of the judgment).
In the circumstances of the instant case, it would not have been fair, just and reasonable to have held that the police had owed a duty of care to safeguard the claimant's general financial wellbeing, which might have conflicted with their responsibility to the public for the investigation of crime and the recovery of the proceeds of crime (see  of the judgment). Glaister and others v Appleby-in-Westmorland Town Council  All ER (D) 79 (Dec) applied; Calveley v Chief Constable of the Merseyside Police  1 All ER 1025 considered; Caparo Industries plc v Dickman  1 All ER 568 considered; Elguzouli-Daf v Metropolitan Police Comr; McBrearty v Ministry of Defence  1 All ER 833 considered.
(2) Per Arden LJ: In the circumstances of the instant case, the public policy that underpinned the investigations immunity provided by Hill prevailed over that of protecting the claimant from purely financial harm. That meant that the assumption of responsibility imposed on the police had been displaced to that extent by the investigations immunity. It followed that, in relation to each of the matters of which the claimant had complained, the Hill principle had applied (see ,  of the judgment). Hill v Chief Constable of West YorkshireSwinney v Chief Constable of Northumbria Police  3 All ER 449 applied; Brooks v Metropolitan Police Comr  2 All ER 489 applied; Van Colle v Chief Constable of Hertfordshire Police; Smith v Chief Constable of Sussex Police  3 All ER 977 applied.
(3) Per Pill LJ: The instant proceedings were capable of falling within the category of exceptions to the Hill principle (see  of the judgment). Hill v Chief Constable of West Yorkshire  2 All ER 238 applied; Swinney v Chief Constable of Northumbria Police  3 All ER 449 applied; Brooks v Metropolitan Police Comr  2 All ER 489 applied; Customs and Excise Comrs v Barclays Bank plc  4 All ER 256 applied; Van Colle v Chief Constable of Hertfordshire Police; Smith v Chief Constable of Sussex Police  3 All ER 977 applied; Glaister and others v Appleby-in-Westmorland Town Council  All ER (D) 79 (Dec) applied; Stanford International Bank Ltd, Re  All ER (D) 219 (Apr) applied; Welsh v Chief Constable of the Merseyside Police  1 All ER 692 considered; Elguzouli-Daf v Metropolitan Police Comr; McBrearty v Ministry of Defence  1 All ER 833 considered; Desmond v Chief Constable of Nottinghamshire Police  All ER (D) 37 (Jan) considered.
(4) The judge had been correct in dismissing the claim for psychiatric injury as the question of foreseeability went to the issue of breach of duty, because any duty had been necessarily limited to a duty not to cause foreseeable injury. Psychiatric injury had not been a reasonably foreseeable consequence of the matters about which the claimant had complained (see , ,  of the judgment).
Ian Glen QC and Gordon Bishop for the claimant; Lord Faulks QC and Edwin Buckett for the defendant.