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An Informer v A Chief Constable

9 March 2012
The issues

Police – assumption of responsibility – informer – economic loss

The facts

The claimant, an informer, brought a claim for damages against a Chief Constable for breach of contract, negligence and misfeasance in public office. The High Court judge dismissed the claims and the claimant appealed in respect of the claims for breach of contract and negligence. The appeal raised the question as to whether 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 safe guard him from economic loss.

The claimant – C – contacted the police to say that he had financial dealings with X and that X was involved in criminal activities. The police gave C a brief explanation of the steps which they would take to protect his activity and warned him he had no authority to engage in any form of criminal activity himself. Within a day, authorisation was given under the Regulation of Investigatory Powers Act 2000 (RIPA) for the use of C as a ‘convert human intelligence source’ (CHIS). C provided valuable information to his handlers about X. As a result the police began an investigation into X and others. C’s handlers were not part of the investigating team. This was a deliberate separation of function. The investigation led to the arrest of a number of X’s associates. C told his handlers that X wanted to talk to him about one of their deals, the circumstance of which suggested the possibility of money laundering by X whether or not C knew or suspected it. A few weeks later X was arrested and charged with a serious offence. Amongst others things the police were concerned to investigate whether X had assets which might be the subject of a confiscation application and/or whether they had committed a money laundering offence. The investigations included looking into X’s dealings with C and the police obtained production orders under s.345 of POCA against C’s bankers, solicitors and accountants. C was subsequently arrested on suspicion of money laundering, interviewed and released on bail. When C was arrested, no officer involved in the investigating team was aware of the identity of the handler’s source. The handlers however, had had advanced knowledge of C’s arrest. A few weeks after C’s arrest there was a meeting between a senior police officer who had oversight of the investigation and a senior police officer who had oversight of the conduct of C’s handlers. The purpose of the meeting was to discuss information sharing and division of responsibilities. The result of the discussion was a memorandum of understanding, dealing with certain limited sharing of information between the two police functions. Subsequently, C was the subject of a restraint order, specifying certain assets. The judge who made the order was told nothing about C’s role as a CHIS. Neither the police officer who made the statement in support of the application nor the CPS had been told either. C was upset by the order and complained about it to his handlers. He said the effect was to put him in dire financial straights. During the same time, C’s status as a CHIS was terminated. Four months after the restraint order was made it was varied to permit C to sell certain assets under certain terms. The solicitors representing C took the view that there was no purpose in applying to set aside the order until a decision had been taken as to whether C was to be prosecuted.

Hill v Chief Constable of West Yorkshire established that the police owed no duty of care to individual members of the public for acts committed in the course of investigating or suppressing crime

Four to five months later the CPS decided that no criminal proceedings were to be bought against C and for reasons which were unexplained several more months passed before the restraint order was formally discharged. C brought a claim for economic loss and psychiatric injury. He alleged a duty in contract to ensure that his welfare, livelihood and reputation remained free from adverse consequences arising out of his decision to assist the police and in the alternative the defendant assumed responsibility towards him in respect of the same matters and so owed him an equivalent duty of care in tort. The High Court judge dismissed the claim on the basis that whilst he was prepared to find that the police assurances were intended to be legally enforceable and so give rise to a contract, there was no suggestion that any police officer was in breach of an obligation to treat C’s safety as a priority, nor was there a proper factual basis to conclude that the defendant ever made a promise to the claimant that the claimant’s livelihood or financial well being would be treated as a matter of priority or safe guarded. As to the negligence claim, the judge considered that C had to show the defendant had assumed responsibility for the avoidance of economic loss before a duty in negligence could arise, and that his findings in relation to the contract claim precluded such a finding. Finally, he concluded that an officer engaged in activity related to the investigation and suppression of crime was immune from a complaint of negligence as a matter of policy under the doctrine in Hill v Chief Constable of West Yorkshire, unless there was a factual basis for holding otherwise, such as an assumption of responsibility.

As for the claim of personal injury, the judge found that there was no basis for concluding that any acts or omissions about which C complained gave rise to a foreseeable risk of physical or psychiatric injury. C appealed.

C’s case on appeal was that the judge should have held that a contractual duty was owed to safe guard C’s safety and welfare and that welfare had a broad meaning which included livelihood and economic well being. As to negligence and economic loss, C’s case was that the judge was wrong to find that the existence of a duty of care required an assumption of responsibility but that the question was whether it was fair, just and reasonable to impose such a duty on the defendant.

Further, C’s case was that the judge was wrong to apply the Hill principle to a situation in which there was special relationship between C and the defendant, and finally it was argued for C that there was five breaches of the defendant’s contractual and/or tortious duty, namely the obtaining of a production order; the arrest; the interviewing of C after his arrest; the obtaining of a restraint order without disclosure to the court of C’s status as a CHIS; and the duration of the restraint order.

The decision

Lord Justice Toulson
The relationship between C and the police was a confidential one. A duty of care was owed to protect C from risks to his physical safety and well being to which he was potentially exposed as a result of his activates as a CHIS. That duty did not extend to protect C from investigation from suspected criminal conduct on his part nor did it extend to purely economic loss.

The starting point for considering the relationship between the police and a CHIS was its purpose. The principle duties of the police were the prevention and detection of crime. Informers had been for many years one of the means used for this purpose. That use was now regulated by s.29(3) RIPA. The relationship was a confidential one. Confidentiality served to protect the CHIS and also to encourage the supply of information to the police by people likely to come forward if they could be confident that their confidentiality would be protected. Neither the act nor the code of practice provided a definition of security of welfare or safety and welfare. They covered risks of a physical nature and the imposition of a duty of care for the safety and welfare of a CHIS in that sense would be consistent with the purpose of the relationship being one of the confidentiality. It was just and reasonable that the police should owe a duty of care of that kind. It was unlikely however, that parliament had intended welfare to be given the broad meaning advanced by C as including financial loss. It would not be fair, just and reasonable to hold that the defendant owed a duty of care of that scope. It would not be just or reasonable to place a duty of care on the police for the protection of C’s economic interest which might conflict with their responsibilities of the public, for the investigation of crime and the proceeds of crime.

Lady Justice Arden
Hill v Chief Constable of West Yorkshire established that the police owed no duty of care to individual members of the public for acts committed in the course of investigating or suppressing crime. The Hill principle had limitations. Brookes v The Commissioner of Police for the Metropolis suggested whilst reaffirming the Hill principle that there could be exceptional cases on its margins where the principle did not apply.

The cases showed that the principle in Hill had been held not to apply where the loss had been directly incurred by the act or omission of the police. A second category of case was where the act complained of was not done in the course of investigating or suppressing crime at all but as part of some other function of the police. A third category of case arose where there was a special relationship between the parties or an assumption of responsibilities of the police to the claimant. This was the case in Swinney v Chief Constable of Northumbria. There was a danger that an over ready application of the Hill principle might be to deprive meritorious claimant’s of a remedy.

On the facts of this case, C was accepted as a CHIS by the police and fulfilled his obligations to them in that regard. There was clearly an assumption of a duty of care by the police to C by virtue of his status of a CHIS. The facts of this case were no less compelling than the circumstances of Swinney which were accepted in Van Colle as lying outside the Hill principle. This conclusion was re-enforced by the Regulatory Scheme for the Protection of CHIS’s to be found in s.29 of RIPA. The use of the word ‘welfare’ as used in s.29 should not be read as excluding financial well being. However, the public policy underpinning the investigations immunity prevailed over that of protecting the CHIS from purely financial harm. The assumption of responsibility imposed on the police was displaced to that extent by the investigations immunity. It followed therefore, that in relation to each of the matters of which C complained the Hill principle applied.

Lord Justice Pill
A special relationship between C and the police existed and both parties gave effect to it. In such circumstances the rationale behind the Hill principle and the cases which had followed it, did not operate in its broad formulation. The circumstances of this case were capable of falling within the category of exceptions to the Hill principle. If the Hill principle was to be employed by the police officers so as to license them to mislead courts or ignore the legitimate interest of a CHIS, the principle was not in the public interest. However, on the basis of the uncertainty of the material placed before the court as to the progress of the investigation into fraud and as to C’s position at the time an application for a restrict order was made the court felt constrained to apply the Hill principle. There was a duty of care to C arising out of the proximity of the relationship which extended beyond his physical welfare and could cover his financial welfare. However, when considering the scope and extent of the duty and the standard of care required, the complexity of the situation had to be borne in mind. Failure to notify the front line investigators of C’s status before they made an application for the restraint order did not involve a breach of the extended duty to him. Had they proceeded to charge him or detain him, the position might have been different.

Appeal dismissed.

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The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

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