I thought that the UK, as opposed to US, legislation demanded only that encryption keys be handed over. The possession of encrypted files would not be an offence, only the refusal to decrypt them. Nonetheless, this is hugely prone to problems (I'm just hosting the files for my friend whose hard drive is full...).
We should also remember that many (most) RO users also possess encryption software. An example that's easy to forget is David Pilling's SparkFS that can encrypt as well as compress. And why might that be useful? Suppose one has information of commercial value on a computer (say, the source code of a commercial program) and that computer is used by some else, or used at a computer show, or returned to a dealer for repair/upgrade - would it not be a good idea to encrypt that data if it was impractical to remove it?
Or those photos of your ex- that have sentimental value but that you wouldn't want your current partner to see because they would upset him/her? Now that would be a good one to explain: "They're photos but I don't want you to see them and I don't want to tell you why...". Good law has little choice but to assume innocence until proven otherwise.