Court roundly rejects data protection and human rights privacy at work defences of solicitor accused of client poaching

In one of Scotland’s first court cases on the legality of covert monitoring of employees in the workplace, the pursuer, a leading firm of immigration law advisors, conducted extensive surveillance to expose an alleged client-poaching ring amongst its senior in-house solicitor, the first defender, other staff and a former member of staff who was the second defender and first’s husband.

About this case:

Citation: FIVE STAR (INTERNATIONAL) LIMITED v SHAFAATULLA & Another-GLW-B646-24

Judgment: Link

Court: Sheriff Court

Judge:  Sheriff Stuart Reid

Ampersand’s Eoghainn MacLean, advocate, appeared for the pursuer, instructed by Campbell Deane of Bannatyne, Kirkwood France & Co, solicitors.

The case was heard at Glasgow by Sheriff Stuart Reid, the experienced commercial and also appeal Sheriff.  It had previously attracted media attention.

Case

It was a summary application under section 1(1) of the Administration of Justice (Scotland) Act 1972 for the recovery of documents and other property in respect of which it was said questions may relevantly arise in future proceedings likely to be brought by the pursuer against the defenders for damages for breaches of their respective contractual and delictual duties arising from all the instances of poaching and diversion of its clients averred against them.

The pursuer’s case was that, having found suspicious e-mails, it had then carried out audio surveillance in a room in its office used by the first defender on 19 individual days over three months.  That those recordings of her conversations revealed she had been involved in 20 instances of poaching and diverting of clients and conduct directly associated with it, in most of which she had acted in concert with the second defender, two other staff and a number of clients.  That the details of each instance were supported by transcripts of the relevant conversations and other productions.

Dawn raid

By prior interlocutor, a commissioner had been appointed and a dawn raid carried out at the defenders’ home.  He had taken possession of numerous items, including mobile phones, laptops, tablets, flash drives and other digital media and electronic storage devices.   Extensive procedure and hearings had followed to ensure the extraction of data from all the devices, including those supposedly used by the first defender in her work for an English legal charity.  The excreted recoveries from the raid were eventually lodged in the hands of the Sheriff Clerk.

The pursuer then moved for their uplift, inspection and use for its prospective damages action, which was opposed and assigned to a hearing over two days for which parties lodged detailed written submissions and authorities.

Arguments

The defenders argued that it would be unlawful to allow the pursuer to inspect and use the recoveries from the raid because they and the surveillance evidence, that was the basis of application, were derived from breaches of the defenders’ right to privacy in the workplace, under the UK General Data Protection Regulation and Article 8 of the ECHR, which had arisen, in particular, from the pursuer’s alleged failures properly, to carry out a written data protection impact assessment and, to provide warnings to employees about the potential for the workplace surveillance and from it having been conducted over a disproportionately long period of time.

On the facts, the pursuer argued, firstly, that the conversations, evidenced in the recordings and transcripts, were impersonal.  The first defender had had them in a room, which was part of the workplace open to staff, clients and others, having been given advance warning that her communications at work may have been monitored.  They had, predominantly, concerned client poaching and associated conduct and been entirely voluntary on her part and in no way instigated.  Secondly, that the conversations were material.  Their content would be central in assisting the court to throw light on the occurrence, nature and extent of the defenders’ multiple breaches of duty committed in concert with others, which they had consistently sought to conceal and still baldly denied. Thirdly, that excluding the evidence of them would be grossly unfair to the pursuer’s private interests in seeking to recover its losses and protect its business, the public interest in seeing the court do justice on the basis of all the relevant material, which clearly outweighed the first defender’s private interest in trying to maintain confidentiality in them based on legal technicalities.

Decision

In his judgment, the Sheriff granted the pursuer’s motion for uplift, inspection and use of the recoveries from the raid for the reasons set out in its submissions.

Statutory test

He began by making the following points about the overall statutory test in a summary application or petition under section 1(1).

“As a starting point, the 1972 Act permits the recovery of documents and property in respect of which “a question may relevantly arise” in contemplated proceedings.

The merit or relevancy of the contemplated proceedings is not to be scrutinised in detail, still less determined, in these pre-action summary proceedings.  All that need be presented is a prima facie intelligible and stateable case.

Likewise, the relevancy of the documents to those contemplated proceedings is not to be subjected to forensic examination. The issue is whether a question “may relevantly arise” in respect of the document or property sought to be recovered.”

Admissibility

On this, he continued:

“Lastly, it is to be noted that the statutory test is not whether the evidence sought to be recovered is admissible, but whether it may be relevant. The proper forum for a final adjudication on the issue of admissibility is within the contemplated proceedings, once raised.

Further, merely because evidence has been obtained illegally – or is otherwise tainted with some sort of illegality – does not necessarily mean that it is inadmissible in civil proceedings.”

He then set out the familiar principles on the discretion which the court, in those proceedings, would have at common law to admit or exclude unlawfully obtained evidence and the matters it would consider in exercising it (Duke of Argyll v Duchess of Argyll (No3) 1963 SLT (Notes) 42 at p43; Baronetcy of Pringle of Stichill, Re 2016 SC (UKPC) 1 at §§76-78).

Noting that the defenders had, at the hearing, reserved their argument (set out in their written submissions) against the admissibility of the surveillance evidence and the recoveries, he concluded that, in the whole circumstances, the statutory test was met and “the court’s discretion was prima facie firmly weighted in favour granting the order…”.

Human rights

He then went on to reject the defenders’ arguments for a right to privacy in the recordings and, therefore, the recoveries under Article 8, saying:

“[T]he circumstances set out in the pursuer’s note of arguments…demonstrate that the first defender…could have had no expectation of privacy. The content of the impugned recorded conversations had nothing to do with the first defender’s private life. Besides, it was averred that she had been given contractual notice that she would have no such expectation in her work communications. Article 8, ECHR is simply not engaged.

[E]ven if Article 8, ECHR was applicable (which is not accepted), the alleged interference with that right was justified in terms of Article 8(2), ECHR (Thorntons Investments Holdings Ltd v Matheson 2023 SLT 1305, paras 90-91; Cowie v Vitality Corporate Services Ltd 2024 SLT 713, paras 105-107). It was done in accordance with law, to pursue a legitimate aim, and was proportionate, for the detailed reasons set out in the pursuer’s written submissions.”

Data protection

He similarly rejected the defenders’ arguments for confidentiality in them under the UK GDPR, making the following clear:

“[T]he alleged GDPR breaches were unpersuasive for the reasons set out in the pursuer’s written submissions. The Regulation does not create a right of confidentiality; a data protection impact assessment, being merely a “process”, does not require to be in writing; the pursuer relevantly avers carrying out such an assessment; the duration of the surveillance was ex facie proportionate.

In any event, ultimately, the defenders’ protestations of GDPR illegality or multiple statutory breaches come to nothing for two key reasons.

First, even if the impugned surveillance were unlawful and in breach of multiple GDPR provisions, that does not render the evidence derived from those alleged breaches inadmissible in the contemplated proceedings.

Second, even if the impugned surveillance were unlawful and in breach of multiple GDPR provisions, that does not affect the recoverability of the excerpted recoveries, pursuant to a Section 1 Order. The evidence seized by the Commissioner in the dawn raid already existed; it was not “created” by the alleged illegality or data breach; it was there to be discovered, all along, independently of any preceding alleged unlawfulness or statutory breach; the preceding alleged illegality does not contaminate the probative quality of that independently-existing material; and, in any event, the independent intervention of the court in granting the Section 1 Order made the dawn raid the occasion, rather than the cause, of the discovery of that separate and additional evidence then seized; so the excerpted recoveries cannot properly be said to be “derived” from the surveillance evidence (HM Advocate v P 2012 SC 108, para 27; Thorntons Investment Holdings Ltd, supra, paras 92-93).”

Accordingly, the court granted the summary application authorising the pursuer to use the recoveries for its prospective damages proceedings

Eoghainn MacLean, advocate, will address these and other issues in his talk at Ampersand Advocates Commercial Disputes Conference next week.

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