In recent months we have seen a number of significant judgments regarding the scope of protection offered to litigants by legal privilege. In this article we discuss the effect of those decisions and highlight some of the issues that parties should be aware of.
Privilege is a fundamental legal right, the underlying basis for which is the principle that an individual or corporate should be able to seek legal advice from a lawyer without being concerned that those discussions will be made public. Once established, privilege gives a party an absolute right to withhold materials from disclosure to a third party or the court. In recent decisions the court has, however, increasingly sought to narrow the circumstances in which privilege can attach.
Following receipt of a whistle-blowing email alleging corruption within one of its wholly-owned subsidiaries ENRC instructed solicitors and forensic accountants to conduct internal investigations. The SFO requested that ENRC disclose copies of documents generated in these internal investigations. ENRC asserted both litigation privilege[2] and legal advice privilege[3] over the documents and refused to provide them. On appeal, the Court of Appeal held that the documents sought by the SFO were covered by litigation privilege. Key lessons to learn from the decision are that:
Further analysis of this decision can be found here.
West Ham sought inspection of several documents over which E20 had asserted privilege, including emails passing between members of E20’s board and between the board and stakeholders. E20 claimed the emails were protect by privilege because: (1) they had been composed for the dominant purpose of discussing a commercial proposal for settling the dispute when litigation was in reasonable prospect; and (2) litigation privilege covered all internal communications within a company. It was held that:
The FRC sought disclosure from Sports Direct of certain documents to assist with its investigation into the conduct of an accountancy firm in relation to its audit of the company’s financial statements. Sports Direct refused to comply on the grounds that the documents withheld from FRC were subject to legal advice privilege. The court addressed two separate issues:
Further analysis of this decision can be found here.
In judicial review proceedings, the claimant, on the application of Jet2.com Ltd, sough disclosure of various drafts of a letter sent to the claimant after the claimant sent an initial complaint to the CAA. Certain drafts were sent prior to the involvement of the CAA’s in-house lawyers, whilst others were sent to both the in-house lawyers and other employees. The CAA claimed legal advice privilege over those drafts. The court summarised the position as regards legal advice privilege as follows:
The selection of judgments discussed above demonstrate what appears to be a narrowing of the range of documents to which a court will grant the protection of legal privilege, albeit evidently the court remains cognisant of the importance of maintaining privilege over documents pertaining to internal discussions and investigations where litigation is reasonably contemplated or legal advice is clearly being sought. This remains, however, a highly technical issue, and as such parties would be well advised to obtain advice at an early stage in order to understand the extent to which privilege may apply and to ensure that privilege is maintained insofar as is possible.
[1] The Directors of the Serious Fraud Office v Eurasian Natural Resources Corporation Limited [2018] EWCA Civ 2006
[2] Litigation privilege protects communications between clients or their lawyers and third parties for the purpose of obtaining information or advice in connection with existing or contemplated litigation
[3] Legal advice privilege attaches to confidential communications between a client and its lawyers, acting in their professional capacity, in connection with the provision of legal advice
[4] WH Holding Ltd & Anor v E20 Stadium LLP [2018] EWCA Civ 2652
[5] The Financial Reporting Council Limited v Sports Direct [2018] EWHC 2284
[6] R (on the application of Jet2.com Ltd) v Civil Aviation Authority [2018] EWHC 3364 (Admin)