Section 13(1) provides that:

"A person is not be excused from –
(a) answering any question put to him in proceedings relating to property, or
(b) complying with any order made in proceedings relating to property,
on the ground that doing so may incriminate him… of an offence under this Act or a related offence."

This claimant applied for a "Norwich Pharmacal Order" for disclosure of documents and information by third parties to help it to enforce a judgment against the defendant.  The third parties contended that such an order would expose them to allegations of criminal conduct including bribery and offences under the Prevention of Corruption Act. They tried to rely on the privilege against self-incrimination to avoid having to disclose documents.

In ruling that section 13 prevented them claiming the privilege against self-incrimination and in ordering the disclosure which the claimant wanted, Mr Justice Gross said that:

• Whilst the application for disclosure did not fall strictly within the ambit of "proceedings relating to property", it was ancillary to core proceedings for the recovery of unsatisfied judgment debts, which do fall within the definition of "property" in section 13(3).  To consider the application in isolation would be "artificial and a triumph of form over substance".
• The corruption offences in respect of which the third parties sought to assert the privilege against self-incrimination were "related offences" under the Fraud Act, to which the section 13(1) exemption applied.
• Section 13 applied to all proceedings taking place after it came into force on 15 January 2007, even through the alleged fraudulent conduct may have taken place before.

Crossing into the territory of indemnity costs orders

In a recent case it was decided that, by its unreasonable conduct in proceedings, Rabobank had "crossed the frontier" for the award of indemnity costs. (National Westminster Bank v Rabobank Nederland [2007] EWHC 1742 (Comm))

Sir Anthony Coleman observed that whilst its conduct in the proceedings had not involved any lack of moral probity, it suggested that Rabobank was "casting around for a viable basis on which to claim in the face of very slender evidence and demonstrating considerable reluctance to give up points which had already been shown to be untenable".  It had introduced constantly fluctuating allegations of dishonesty, and made speculative allegations of fraud based on tenuous evidence.

Whilst the Civil Procedure Rules (44.3) set out the circumstances the court must take into account in making cost orders generally, they do not specify what precise factors a court should take into account in exercising its jurisdiction to award costs on an indemnity basis.  The decision confirms the test of whether a party has "crossed the frontier" by acting in so unreasonable a manner that indemnity costs should be awarded.  It also provides helpful guidance on the distinction between mere errors of judgment in the conduct of a case on the one hand and unreasonable behaviour, which may lead to an award of indemnity costs, on the other.

Compound interest is payable in restitution

Recovery of compound interest in certain types of claim is now possible following a House of Lords decision. Compound interest was held to be recoverable in a restitution claim against the Inland Revenue to reflect the actual value, over time, of corporation tax which was mistakenly paid prematurely. (Sempra Metals Ltd (formerly Metallgesellschaft Ltd) v Inland Revenue Commissioners and Another [2007] UKHL 34)

In an earlier decision, Metallgesellschaft Ltd v Inland Revenue Commissioners, the European Court of Justice found that the UK's law on the payment of advanced corporation tax contravened Article 43 (then Article 52) of the Treaty of Rome, and that the claimant was therefore entitled to recover interest on the tax payments.

The House of Lords' judgment tidies up fragmented and inconsistent case law on the recovery of compound interest both in restitution and in damages claims.  The decision reflects the commercial reality that money is lent and borrowed on terms requiring the payment of compound interest. It is likely to be relied on by claimants bringing other types of commercial claim where interest claims can be very significant.

Communications between in - house lawyers and their internal clients are still not protected by legal professional privilege in relation to European Commission investigations

It may be surprising to those familiar with the English rules of legal professional privilege that, as far as European Commission investigations into possible breaches of EC competition law are concerned, in - house lawyers' communications with their internal clients are not protected by privilege.  The Court of First Instance on 17 September confirmed that a 1992 European Court of Justice decision to this effect is still good law.  The CFI decisions in Akzo Nobel Chemicals Ltd v Commission T-253/03 and T125/03 confirm that protection is given in this context only to written communications between an "independent" lawyer entitled to practise in an EC Member State and his client, made exclusively for the purpose and in the interests of the clients' rights of defence.

As to the practical effect of the decision on English companies, it does not affect competition investigations conducted by the UK Office of Fair Trading, unless the OFT is assisting the European Commission on an Article 81/82 investigation. It is likely, however, to apply to all investigations by the Commission itself and not just to competition investigations.