The technicality exists under section 1 of the Regulation of Investigatory Powers Act.
The culture select committee came to know about the loophole during its inquiry into News of the World's (NoW) alleged phone hacking.
The police said it could not reopen the inquiry to find the extent of hacking by NoW due to the legal loophole.
Reports suggest that the government is already looking at how the loophole can be closed quickly.
Earlier, a highly critical parliamentary report accused some NoW senior executives of covering the truth about illegal phone hackings by its journalists.