Internal Disciplinary Proceedings: Proceed with Caution

Sometimes criminal offences will stem from misconduct by defendants during the course of their employment. This article looks at the admissibility of interviews from internal disciplinary proceedings at any subsequent criminal trial.

Criminal practitioners may be forgiven for thinking that it would be unfair for answers to be admissible when given in interviews without no warning of the potential consequences. However, the case law is clear that such answers will almost certainly be admissible at any subsequent criminal trial.

Section 67(9) Police and Criminal Evidence Act 1984

When considering admissibility, it is important to consider whether section 67(9) Police and Criminal Evidence Act 1984 (‘PACE’) might apply to the internal proceedings.

Section 67(9) provides:

Persons other than police officers who are charged with the duty of investigating offences or charging offenders shall in the discharge of that duty have regard to any relevant provision of a code.

The relevant provisions of a code include all of the Codes of Practice issued under PACE. It therefore follows that if an investigator is found to be subject to the PACE Codes, any breach will offer a firm basis of exclusion per section 78 PACE.

Fundamentally, it is a question of fact as to whether someone is charged with the duty of investigating offences. The following are examples where the courts have held individuals are charged with doing so:

• Revenue and Customs officers: Okafor (1994) 99 Cr App R 97, CA; Weerdesteyn [1995] 1 Cr App R 405, CA;
• Officers of the Serious Fraud Office: Director of Serious Fraud Office, ex p. Saunders [1988] Crim LR 837, DC;
• Inland Revenue special compliance officers investigating tax fraud: Gill [2003] EWCA Crim 2256;
• Store detectives or similar security officers, and are not just restricted to officers of central government or other persons acting under statutory powers: Bayliss (1994) 98 Cr App R 235, CA; and
• An inspector of the RSPCA may be bound by the codes: RSPCA v Eager [1995] Crim LR 59, DC.

Internal Disciplinary Proceedings

The question of whether internal disciplinary interviews are subject to the PACE Codes was considered in Welcher [2007] EWCA Crim 480. Frederick Welcher (“W”), was employed by Mars as an engineering technician. He was convicted of conspiracy to corrupt and conspiracy to defraud for receiving bribes in return for placing Mars’ works orders with a company called Excel and authorising excessive or bogus payments from Mars to Excel.

W appealed his convictions and submitted that the disciplinary interviews conducted by Mr Carabok, Chief Engineer at Mars, should not have been admitted into evidence by the trial judge. It was submitted on appeal by W that the interviews conducted by Mr Carabok were not conducted in accordance with Code C and Mr Carabok was acting under the duty to investigate offences within the meaning of section 67(9) PACE.

On appeal, the Court held that:

[17] The investigation was made in accordance with Mars disciplinary policy. Mr Carabok was seeking to determine what recommendations to make to the company’s disciplinary panel…

…

[21]… in the circumstances of this case, the judge was entitled to admit the evidence. Mr Carabok was not under a duty of investigating offences and fairness did not require the exclusion of the interviews. The reason given for the falsity of the explanations in interview was that the Appellant was trying to protect his pension. That reason can be, and was, advanced before the jury for their consideration but, true or false, it does not require the exclusion of the evidence. Clarke LJ in Gill [2004] 1 Cr App Rep 20, when considering the safeguards provided by a Code stated, at para 46, that their principal purpose is to ensure, as far as possible, that interviewees do not make admissions unless they wish to do so and are aware of the consequences. Clarke LJ added

“We do not think that the principal purpose of the code is to prevent interviewees from telling lies.”

 Those interviews were properly admitted.

The purpose of the meeting was therefore held to be of particular importance i.e. to determine what recommendations to make to the company’s disciplinary panel. That will often be the primary purpose for most internal interviews/meetings. The Court was therefore persuaded that the process meant the interviewer was not charged with the duty of investigating offences and was not bound by the PACE Codes.

It is worth noting that the Court did place emphasis on the disciplinary policy. It is therefore important for practitioners to request disclosure of such material if arguments on the topic are pursued.

Section 78 when PACE does not have direct application

The case of Smith [1994] 1 WLR 1396 is authority for the proposition that breaches of PACE Code C can still provide a basis of exclusion notwithstanding the fact that an interview is not caught by section 67(9) PACE. S was chairman and managing director of a bank, W, which was subject to the supervision of the Bank of England. In the context of an inquiry as to the action to be taken on W’s liquidity problems arising out of W’s purchase of non-existent securities, S admitted at an interview with a supervising manager of the Bank of England that he had bought the securities knowing they did not exist. Notes of the interview were taken but S was not shown the notes nor asked to agree them, nor was he informed at any time that he was not obliged to answer questions or that the manager suspected him of involvement in a fraud on W. He was later charged with fraudulent trading, false accounting, obtaining property by deception and theft.

It was held, inter alia, that the judge at first instance had wrongly exercised his discretion not to exclude the content of the interview under section 78 PACE.

The Court decided that the interview did not engage section 67(9) PACE directly:

We are satisfied that the duty imposed on Mr. Reeves to ensure that the criteria under the Act of 1987 for authorisation were maintained fell well short of a duty to investigate offences. If an offence came to his notice he had to have regard to it and he would take account of any information given to him as a result of the service of a notice under section 13(1). But in carrying out this function he was not investigating an offence within the meaning of section 67(9) (at 1405F per Neill LJ).

However, it was held that PACE Code C could have wider application than simply to investigations explicitly applying it:

[Code C] also enshrines certain principles of fairness which in our judgment may have a wider application. In particular we consider that the principles underlying Code C may be of assistance when the court is considering the general discretion to exclude unfair evidence in section 78(1) of the Act of 1984 (at 1405H per Neill LJ).

The lack of legal advice going to the issue of criminality was of central importance to the Court.

In the ordinary way an appellate court has to be very careful before it interferes with the exercise by a judge of his discretion under section 78(1). In the present case, however, the judge appears to have attached importance to the fact that before the interview the appellant had taken legal advice about his personal position from an experienced city solicitor. This was a misunderstanding of the true position. The advice which the appellant obtained was directed to the question whether W.S.T.C. could open for business on Monday morning. In the circumstances we are satisfied that it would be right for us to consider the position under section 78 afresh (at 1407C per Neill LJ).

The context of the meeting was also of significance:

But it seems to us that as far as the appellant was concerned the meeting had been arranged to discuss the impact on the market and what action should be taken. It was in that context that he answered Mr. Reeves’s questions (at 1408C per Neill LJ).

The crucial distinction therefore in the case of Smith, was that the defendant thought the meeting was to discuss liquidity issues and not any misconduct on his part. Therefore, any argument from the defence that internal disciplinary proceedings are analogous is likely to fail, particularly given that Welcher was decided more recently and deals specifically with disciplinary interviews.

Conclusion

The case law leads to the harsh conclusion that those accused of and interviewed in relation to misconduct need not be aware that every word they say in internal disciplinary proceedings could be used against them at a criminal trial. Employees may often seek to make prompt admissions in an attempt to save their careers. Those admissions may however be passed onto the police and be admissible at a subsequent criminal trial. Accordingly, those accused of misconduct that could amount to criminality are advised to all times to proceed with caution even in the absence of any warning, and would be wise to seek legal advice.