The landmark decision was today won by Stewart Ford, founder of Keydata, with the FSA found to have illegally used “material that was in fact subject to legal professional privilege”. Ford said of soon-to-be-redundant regulatory body: “It is appalling just how far the FSA’s enforcement investigation team has gone in seeking to justify its destructive and ill-judged actions with respect to Keydata and Lifemark. It is a scandal that demands a full public enquiry. I hope this High Court judgment will help to open more people’s eyes to just what a regulatory stitch-up the FSA intends Keydata and Lifemark to be.”
Ford’s case surrounded the use of legally privileged emails from Irwin Mithcell, Keydata’s former legal advisers, between February and June 2008. The FSA obtained the emails after it had successfully applied to the High Court for PricewaterhouseCoopers to take control of the firm as its nominated administrators.
PwC gave the FSA access to Ford’s emails the content of which the High Court has now confirmed as privileged and should not have been handed over.
Mr Justice Burnett today determined that, due to joint legal privilege: “The FSA may not rely upon the content of those communications in the regulatory proceedings”.
Harvey Knight, a partner at Withers, the law firm that has represented Ford since Keydata was taken over by the FSA, added: “This episode, along with the FSA continually ignoring its own guidance and procedures in its investigation into Keydata, raises serious questions about the regulator’s own conduct.
“In light of this ruling, there can be no doubt that the FSA needs to take a long, hard look at its procedures and how it conducts itself.”
Justice Burnett recommended the FSA contacts the Serious Fraud Office to discuss how it can learn from its processes and practices.
A further hearing is now needed to determine what the decision means for the FSA’s investigation into Keydata.
