Using compelled testimony against a co-defendant: hearsay, confessions and the privilege against self-incrimination

It is a well-established principle of criminal law that compelled testimony can only be admitted in evidence against the compelled person is extremely limited circumstances.[1] Is it easier to admit compelled testimony against – or on behalf of – a co-defendant tried on the same indictment as the compelled person?

A attends a compelled interview with the FCA. B is A’s boss. C is A’s friend. A tells the FCA that he passed inside information to C and that C placed trades relying on this information. Having made this confession, consider two alternative scenarios:

1. A tells the FCA that he passed the information to C on B’s instructions and B assisted C in placing the trades (“the first scenario”).

2. A tells the FCA that he and C kept B in the dark about A and C’s communications and the trades placed by C (“the second scenario”).

A, B and C are all charged with insider dealing on the same indictment. The FCA cannot adduce A’s interview against A because A was compelled. But in the first scenario, does the compulsion of A prevent the FCA from adducing A’s interview as evidence against B? And in the second scenario, does the compulsion of A prevent B from adducing A’s interview as evidence in B’s defence?

The first scenario – can the FCA adduce A’s compelled interview against B?

A cannot be compelled to testify in his own trial as to the evidence he gave in his interview.[2] The only route open to the FCA is to argue that A’s interview is hearsay. Section 114(1) Criminal Justice Act 2003 (“CJA”) creates four gateways through which hearsay is rendered admissible, of which only section 114(1)(d) is relevant:

“[…] in criminal proceedings a statement not made in oral evidence in proceedings is admissible as evidence of any matter stated if, but only if, the court is satisfied that it is in the interests of justice for it to be admissible.”

Section 114(2) CJA lists non-exhaustive factors to which a judge must have regard in considering whether this “interests of justice” test is met, including the probative value of the statement, whether other evidence is available on the same matter and the importance of the statement in the context of the case as a whole. In analysing these factors, the courts have repeatedly emphasised that hearsay sought to be admitted under section 114(1)(d) requires careful handling.[3]

Assume that A’s interview is the principal evidence indicating that B knew about A and C’s insider dealing. Assume also that A’s interview was not conducted oppressively or in a manner which resulted in A’s answers being unreliable (the mere fact of the compulsion is not evidence of oppression, since a court would hardly conclude that Parliament had mandated an oppressive scheme, nor is the mere fact of the compulsion necessarily evidence of unreliability, especially as the interviewee is warned that he may be prosecuted if he gives false or misleading answers). The section 114(2) “interests of justice” factors might therefore seem to point in favour of admitting A’s interview as hearsay under section 114(1)(d).

But what about the prejudicial impact on A? This is not a factor listed at section 114(2) CJA, nor has it been addressed in case law. Even so, it must be relevant to an analysis of the “interests of justice” because, once admitted, A’s interview can be used by any party to the trial and is admissible for all purposes. Thus the FCA, if it adduced A’s interview against B, would be able to adduce it against A, thereby circumventing the use immunity which is an essential precondition of a compelled interview. Such a result would run contrary to the principle of criminal law that compelled testimony cannot generally be used in evidence against the compelled person.

In some cases, it may be possible to disentangle the statements in a compelled interview which are only inculpatory of the compelled defendant from the statements which are only inculpatory of the co-defendant, so that the latter are admitted but the former are not. On the facts of the first case, however, it would be impossible to bifurcate A’s interview in this fashion: A’s statement that B instructed him to pass inside information to C (which is the statement the FCA wants in evidence to incriminate B) is inseparable from A’s statement that he passed inside information to C.

As a result of the prejudicial impact on A, the court would, in all likelihood, refuse the FCA’s application to admit A’s interview as hearsay, at least as long as A and B remain co-defendants on the same indictment. The only solution open to the FCA would be to sever the indictment and to prosecute A and B in separate trials. Here the case law provides some guidance. In R v Y [2008] EWCA 1683, the Crown sought the admission of a confession to murder made by X who was no longer a co-defendant of Y, the appellant, because X had pleaded guilty. The court held that X’s confession was highly probative of the prosecution’s case and, despite Y’s inability to test the confession in cross-examination of X or otherwise, it was nonetheless in the interests of justice to admit it under section 114(1)(d).

By analogy, and depending on the precise application of the section 114(2) factors, there is a route in the first scenario to admitting A’s compelled testimony as hearsay in a trial of B and C, but only once A is severed or pleads guilty.

The second scenario – can A’s compelled interview be adduced by B in B’s defence?

When the application to admit A’s interview is made by the co-defendant B, rather than a prosecutor, there are two routes to admissibility instead of one.

The first route is through the same section 114 CJA hearsay provisions described above. Here, as in the first scenario, the “interests of justice” test is likely to thwart B’s application as long as A and B remain co-defendants on the same indictment.

But the second route – section 76A Police and Criminal Evidence Act 1984 (“PACE”) – may well prove more fruitful. Section 76A PACE was brought into force following the SFO Wickes prosecution in the early 2000s, after Parliament resolved that the trial judge had been right to hold that the use immunity created by the then section 2(8) Criminal Justice Act 1987 (which governs compelled interviews conducted by the SFO) applied only to evidence adduced by the prosecution, and did not create a blanket prohibition on one defendant adducing the transcript of a co-defendant’s compelled interview.

S76A PACE provides as follows:

 “(1) In any proceedings a confession made by an accused person may be given in evidence for another person charged in the same proceedings (a co-accused) in so far as it is relevant to any matter in issue in the proceedings and is not excluded by the court in pursuance of this section.

 (2) If, in any proceedings where a co-accused proposes to give in evidence a confession made by an accused person, it is represented to the court that the confession was or may have been obtained-

(a) by oppression of the person who made it; or

(b) in consequence of anything said or done which was likely, in the circumstances existing at the time, to render unreliable any confession which might be made by him in consequence thereof,

the court shall not allow the confession to be given in evidence for the co-accused….”

From B’s perspective, section 76A PACE is an easier route to admissibility compared to section 114 CJA because A cannot argue that the prejudice he would face if his testimony was admitted under section 76A PACE is such that the “interests of justice” should dictate its exclusion. Instead A could make three arguments to seek the exclusion of all or parts of his interview.

First, A could argue that the circumstances in section 76A(2) PACE apply, i.e. the compelled interview was obtained by oppression or is otherwise unreliable. For the reasons given above, however, this argument is unlikely to succeed; compulsion is not itself evidence of oppression or unreliability.

Secondly, A could argue that Parliament did not intend section 76A PACE to apply to compelled interviews, which should never be admitted in criminal proceedings where the compelled person is a defendant because to do so would circumvent the use immunity afforded to A. In response, B could argue that the Financial Services and Markets Act 2000 (“FSMA”), the statute which obliged A to answer the FCA’s questions, contains no restriction on what use may be made of A’s answers by B: section 174(2) FSMA only prevents a prosecutor, not a co-defendant, adducing evidence – or asking questions – about a defendant’s compelled testimony. Indeed, no equivalent statute which vests an investigative agency with compulsory interview powers provides that a defendant is inhibited from adducing a co-defendant’s compelled testimony. Had Parliament intended that compelled interviews should never be used in criminal trials, this could have been written clearly into the relevant statutes when they were redrafted following Saunders v United Kingdom [1997] 23 EHRR 313, which rebalanced the powers between the state and the defence in respect of the use to which compelled testimony could be put.

Thirdly, A could argue that his testimony should only be admitted to the extent that it constitutes a confession made by A, as required by section 76A(1) PACE. Section 82 PACE defines a confession as including “any statement wholly or partly adverse to the person who made it, whether made to a person in authority or not and whether made in words or otherwise.” During his interview, A made such a confession when he admitted that he passed inside information to C. Whilst it may be useful for B to have this confession in evidence (insofar as A’s confession does not mention B), what B really wants in evidence is A’s statement that he and C kept B in the dark. This latter statement is plainly exculpatory of B. But is it also inculpatory of A, in the sense of being “wholly or partly adverse” to A as per section 82 PACE?

A judge is likely to adopt a strict approach to section 82 PACE. Unless the confessions made by A in his interview are inextricably linked to other statements which are exculpatory of B, these other statements will not be admitted. Extracting only the confessions, and refusing to admit any other material from the same source, was the approach adopted in R v Sliogeris [2015] EWCA 22. A similarly strict approach would probably permit B, under section 76A PACE, to adduce A’s confession that he passed inside information to C, but may well thwart B’s attempt to admit A’s statement that B was kept in the dark. This is because the former statement (which is a confession) can be separated from the latter (which is not).

In summary, in the second scenario, notwithstanding that A confessed under compulsion, B would be entitled under section 76A PACE to adduce A’s confession in B’s defence, potentially damaging A’s defence. This is a useful reminder that the privilege against self-incrimination has never been regarded as absolute, and that the use immunity granted as a quid pro quo for the compulsion of the interview applies only to the subsequent use of such interview by a prosecutor, not a co-defendant. Compelled testimony can, in these carefully prescribed circumstances, return to damage the compelled person at trial.

[1] See https://www.corkerbinning.com/the-use-of-compelled-testimony-in-criminal-proceedings/ which explains why compelled testimony has only been admitted against the compelled person in a discrete line of road traffic cases.

[2] Section 1 Criminal Evidence Act 1898.

[3] See, for example, R v Y [2008] EWCA 1683 at 62, R v Horncastle [2009] UKSC 14 at para 39 and R v Sliogeris [2015] EWCA 22 at para 17.