Victoria Prince, Associate, Fladgate LLP (firstname.lastname@example.org)
Affirming the scope of professional privilege, the Court of Appeal has confirmed that certain documents generated in internal investigations carried out prior to court proceedings are protected by litigation privilege. Its decision in The Directors of the Serious Fraud Office v Eurasian Natural Resources Corporation Limited provides useful guidance on what investigative documents will be covered by litigation privilege.
A multinational corporation (ENRC) instructed solicitors and forensic accountants to conduct internal investigations following receipt of a whistle-blowing email alleging corruption within one of its wholly-owned subsidiaries.
The Serious Fraud Office (SFO) requested that ENRC disclose copies of documents generated in these internal investigations. In particular, the SFO requested disclosure of: (1) notes taken by ENRC’s solicitors of evidence given to them by individuals concerning the events under investigation; (2) materials generated by the forensic accountants in their review of ENRC’s books and records; (3) factual evidence presented by ENRC’s solicitors to its Nomination and Corporate Governance Committee; and (4) reports of the forensic accountants and internal emails between ENRC executives.
ENRC asserted both litigation privilege and legal advice privilege over the documents and refused to provide them without confirmation from the SFO that it would not use them as evidence of wrongdoing or in any criminal proceedings. The SFO refused to provide that confirmation and sought a declaration from the court that the documents were not privileged.
In a controversial decision, Andrews J granted the declaration sought for all but the third category of documents, ruling that neither litigation privilege nor legal advice privilege applied. In relation to litigation privilege, Andrews J held that:
Legal advice privilege did not apply because:
ENRC appealed Andrews J’s decision. The Court of Appeal allowed the appeal in part, ruling that the documents sought by the SFO were covered by litigation privilege because:
The Court of Appeal declined to rule on the applicability of legal advice privilege, finding that any change would need to be considered by the Supreme Court. The court noted however that it would have been in favour of departing from the principles in Three Rivers (No.5) – which it felt were out of step with international common law – and expanding the definition of “client” beyond those employees specifically authorised to obtain legal advice on a company’s behalf.
This decision provides welcome clarity on the ambit of litigation privilege in relation to documents generated in internal investigations. Whether legal advice privilege can be successfully claimed over such documents in the absence of an existing threat of adversarial proceedings awaits further consideration by the Supreme Court.
 The Directors of the Serious Fraud Office v Eurasian Natural Resources Corporation Limited  EWCA Civ 2006
 Three Rivers District Council and Others v Governor and Company of the Bank of England (No.5)  QB 1556
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