Internal investigation documents – should you hand them over?

19 September 2018

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[1] 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.

First instance decision

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:

  1. ENRC did not reasonably contemplate litigation at the time the documents were created. An SFO investigation may have been reasonably in contemplation, but such an investigation was not adversarial litigation.
  2. ENRC’s investigations were simply fact-finding exercises commissioned with a view to obtaining legal advice once the facts were known.
  3. The forensic accountants’ investigations were created for the dominant purpose of a compliance review.

Legal advice privilege did not apply because:

  1. (Applying Three Rivers (No.5)[2]) ENRC’s employees, officers and ex-employees who took part in the internal investigations, however senior in the corporate hierarchy, were not individuals authorised to obtain legal advice on ENRC’s behalf.
  2. Documents compiled for the purpose of enabling the client to seek and receive legal advice were not privileged.
  3. Lawyers’ working papers (including notes of interviews with witnesses) would not attract legal advice privilege unless they betrayed the tenor of the legal advice provided.

Court of Appeal decision

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:

  1. On the facts, the subtext of the relationship between ENRC and the SFO was that a potential criminal prosecution was in reasonable contemplation, at least from when ENRC started its investigations and certainly by the time the SFO first wrote to it concerning the allegations.
  2. Legal advice given to head off, avoid or settle reasonably contemplated proceedings was as much protected by litigation privilege as advice given for the purpose of resisting or defending contemplated proceedings.
  3. The interviews and books and records review were part of a fact-finding process carried out at a time when criminal prosecution was in reasonable contemplation and for the dominant purpose of resisting or avoiding that prosecution.
  4. It was in the public interest that companies should be prepared to investigate allegations from whistle-blowers or investigative journalists prior to prosecution without losing the benefit of privilege – failing to allow privilege in these circumstances may lead to companies not investigating, for fear of being forced to reveal what they had uncovered.

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.

[1] The Directors of the Serious Fraud Office v Eurasian Natural Resources Corporation Limited [2018] EWCA Civ 2006

[2] Three Rivers District Council and Others v Governor and Company of the Bank of England (No.5) [2003] QB 1556