The issue of whether or not the courts have a power to consider evidence without it being shown to one of the parties (“closed material”) where there are security reasons for this has been considered recently by the Supreme Court.

The Supreme Court had to consider whether or not it could review closed material in an appeal by Bank Mellat, an Iranian bank, concerning the measures taken by the Treasury which restricted the bank’s access to UK financial markets under the Counter-Terrorism Act 2008.[1]

The application to set aside the order included a closed material procedure, so that material which the Treasury wished to rely on could be seen by the Court without being seen by the bank, for security reasons. The bank’s appeal to the Court of Appeal was dismissed also relying in part on closed material.

The Supreme Court considered first whether it could adopt  a closed material procedure. The Court expressed distaste and concern about the possibility of such a hearing, however understandable the reasons for suggesting it were. But by a majority (6-3), the Court held that it could conduct a closed material procedure where it was necessary to dispose of an appeal fairly and there would be a risk of injustice if the Court did not consider the closed material. Thus the Court did view the closed material, although the Court have guidance for the use of closed material. In general this should be restricted as far as possible; and the Judge deciding a case should make clear the basis of the decision in the open judgment as much as can properly be said about the closed material which has been relied on. And on an appeal, the Court should only be asked to look at closed material if absolutely necessary, and if possible, it should be the subject of submissions in open court albeit without reference to the confidential sections.

This was not an easy decision: a minority dissented, considering that the principle of open justice[2] was fundamental and, without express legislative authority, the court could not limit this basic general right.

The Supreme Court went on to consider the substantive appeal,[3] and held that the Treasury’s measures were arbitrary and disproportionate as well as being unlawful because of a failure to  give the bank prior notice and the opportunity to make representations before the direction was made.

The possibility of a closed material procedure has now been implemented by the Justice and Security Act 2013 which provides for the possibility of a closed material procedure in civil cases. This will allow security-sensitive material to be put before the Court without it being disclosed in the public forum of open court. This therefore avoids the problem perceived by the security services; but does not tackle the problem that justice cannot be seen to be done and that a case can be decided without one of the parties knowing the evidence relied on by the other.