Judge finds regulator relied on wrong statutory basis but allows retention of seized material
The High Court has quashed a search warrant obtained by the Financial Conduct Authority after finding that the regulator relied on the wrong statutory basis when seeking judicial approval to seize electronic devices belonging to a barrister.
In R (on the application of A) v Financial Conduct Authority, the Administrative Court concluded that the errors in the warrant application were sufficiently serious to render the warrant unlawful. However, the judge declined to order the immediate return of the seized material, leaving the issue to be determined under the statutory regime governing retained property.
The case arose from an FCA investigation into suspected financial wrongdoing. As part of that investigation, the regulator applied for and obtained a warrant permitting officers to search premises and seize devices belonging to a practising barrister believed to hold potentially relevant material.
The barrister challenged the legality of the warrant by way of judicial review, arguing that the FCA had relied on an incorrect legal framework when applying to the court for authority to conduct the search.
The Administrative Court agreed that the warrant had been obtained on the wrong statutory footing. In the judgment, the court identified a series of legal errors in the way the application had been presented, concluding that the warrant could not lawfully stand.
Despite the seriousness of those errors, the judge rejected suggestions that the regulator had acted improperly.
The judge said “Their failings represent a lack of rigour rather than any deliberate misconduct”.
Having quashed the warrant, the court then considered whether the claimant was entitled to the immediate return of the seized devices and their contents. The judge concluded that such an order would not be appropriate at this stage.
Instead, the court held that questions about the continued retention or examination of the material should be addressed under the framework set out in the Criminal Justice and Police Act 2001. That regime provides a mechanism for determining whether items seized during an investigation may lawfully be retained and examined, even where issues subsequently arise regarding the validity of the original warrant.
As a result, although the warrant itself was set aside, the FCA was permitted to keep the material pending further consideration under the statutory process.
The ruling highlights the legal complexities that can arise when investigative powers are exercised under an incorrect statutory basis, particularly where electronic devices and potentially sensitive material are involved in regulatory investigations.