A police informer can not escape from consequences his illegal action. There is a duty of care owed to a police informer, but the police can not be liable for pure financial loss
AN INFORMER v CHIEF CONSTABLE (2012)
 EWCA Civ 197
CA (Civ Div) (Pill LJ, Arden LJ, Toulson LJ) 29/02/2012
The appellant (C) appealed against the dismissal of his claims for breach of contract and negligence against the respondent chief constable (D) for failure to exercise reasonable care in the conduct of an investigation for which he had supplied information.
While acting as a police informer, authorised under the Regulation of Investigatory Powers Act 2000 as a covert human intelligence source (CHIS), C had been arrested and interviewed on suspicion of money laundering. The police obtained orders for the production of documents and restraining the disposal by him of assets, which C claimed had caused him significant financial loss and consequent depression. The officer that applied for the restraint order did not know that C was a CHIS, so he did not disclose that information to the judge. C claimed that D had breached his contractual and tortious duties to him as a CHIS.
The judge held that oral assurances amounting to contractual promises were given by C’s handlers that D would treat his safety and that of his family as a priority, but that no term could be implied for safeguarding C’s financial well-being, nor had D assumed responsibility for it. He held that D had been negligent in relation to disclosure on the restraint order application, but that an officer engaged in activity related to investigation and suppression of crime was immune from a complaint of negligence as a matter of public policy under the principle in Hill v Chief Constable of West Yorkshire  A.C. 53.
The judge also held that psychiatric injury was not a reasonably foreseeable consequence.
C argued that the judge
(1) should have held that D owed him a duty to safeguard his economic interests;
(2) had been wrong to decide whether the acts complained of gave rise to a foreseeable risk of personal injury because the issue had been limited to breach of duty.
HELD: (1) In approaching the question whether to recognise a duty of care the test was not simply to be found in the expression “voluntary assumption of responsibility”.
The starting point was to consider the purpose of the relationship between a CHIS and the police. Section 29(3) of the Act provided that the prevention or detection of crime was one of the purposes for which use of a CHIS could be authorised; the purpose was not to provide the CHIS with an escape route from the consequences of illegal conduct. The relationship between the police and a CHIS was a confidential relationship serving the purposes of safety and peace of mind of the CHIS, and encouraging the supply of information to the police. It would be consistent with that relationship, and reasonable, to impose a duty of care on the police for the safety and welfare of a CHIS in terms of physical risks.
The Act and the relevant code of practice showed that Parliament was concerned that those handling a CHIS should have regard to any foreseeable risks to his security and welfare arising from the relationship. Accordingly, the prospective harm against which the police might be held to owe a duty of care towards a CHIS had to be limited to the risks to his physical safety and wellbeing that were due to his conduct in assisting the police; they could not owe a duty that would conflict with their duty to the public, Hill and Van Colle v Chief Constable of Hertfordshire  UKHL 50,  1 A.C. 225 considered.
It was doubtful that Parliament had intended “welfare” to be given a broad meaning that included economic loss, and it was not fair, just and reasonable to extend the duty to pure economic loss, Calvely v Chief Constable of Merseyside (1989) 1 AC 1228 and Elguzouli-Daf v Commissioner of Police of the Metropolis  Q.B. 335 considered .
In the instant case, it would not be reasonable to place a duty on D to give priority to supporting C’s financial welfare over the public interest in the detection of crime and recovery of proceeds. The failure to disclose C’s role to the judge making the restraint order was a serious misleading of the court, but it did not amount to a breach of duty (Per Arden, L.J.)
There were public policy considerations supporting the assumption of a duty of care in favour of an informer, which were capable of excluding the principle in Hill in appropriate circumstances, Swinney v Chief Constable of Northumbria (No.1)  Q.B. 464 applied. That was reinforced by the regulatory scheme for protection of a CHIS in s.29 of the Act (paras 114-115). (Per Arden and Pill, L.J.J.) In the circumstances, the principle in Hill applied to exclude liability, Hill applied
(2) The question of foreseeability went to the issue of breach of duty, because any duty was necessarily limited to a duty not to cause foreseeable injury. Psychiatric injury was not a reasonably foreseeable consequence of the matters complained of. Further, the duty of care could not extend to protecting C from investigation of suspected criminal conduct on his part, and the acts that caused C’s depression were done in the investigation of his suspected criminal conduct