The Court of Appeal has upheld a decision that a pre-action letter sent by the claimant to a third party, and the third party’s response, were subject to litigation privilege as the claimant’s true purpose in instigating the correspondence was to obtain information for the present proceedings. The dominant purpose test was therefore satisfied, and the privilege could not be overridden even if the third party was deceived as to the true purpose of the request: Victorygame Ltd v Ahuja Investments Ltd [2021] EWCA Civ 993.

The decision confirms that, as the court below had held (see our blog post on the High Court’s decision here), in considering the dominant purpose test for litigation privilege, the relevant purpose is that of the person who instigated the communication or document in question. Property Alliance Group v The Royal Bank of Scotland Plc (No. 3) [2015] EWHC 3341 (Ch) (“PAG”), in which the court held that the purpose should be assessed differently where witnesses had been deceived into believing that the purpose of a meeting was other than to collect information, could be distinguished on its facts. The Court of Appeal in this case declined to express any view as to whether the approach in PAG was correct, saying that that question was best saved for a case in which it directly arose. That decision may therefore be ripe for reconsideration in an appropriate case.

The Court of Appeal’s decision is helpful in reinforcing the absolute nature of a claim to legal professional privilege. It underlines the fact that, once established, privilege cannot be overridden by some competing public interest. As the court recognised, however, privilege can be waived and, in some circumstances, a party may be estopped from asserting privilege, though a finding of this sort would require cogent evidence. The court accepted, without deciding the point, that an estoppel might be found to arise where a party lied to its opponent to induce them to divulge information that they would not otherwise have been obliged to disclose – though it was harder to see how an estoppel could arise where information was sought from a third party.

In any event, given the uncertainties and fine distinctions in this area, as well as the risk of attracting judicial disapproval and (potentially) regulatory censure, parties should exercise caution in how they go about obtaining information for the purposes of proceedings.

Background

An issue arose in the context of a misrepresentation claim as to whether the claimant was entitled to assert litigation privilege in respect of two documents: (i) a letter of claim written by the claimant’s current solicitor to its former solicitor (Mr Jandu of Stradbrooks, who was not a party to the underlying claim) under the pre-action protocol for professional negligence; and (ii) Stradbrooks’ insurer’s response to that letter.

The claimant’s solicitor (Mr Davies) gave evidence that, despite being presented as a letter of claim, the dominant purpose of that correspondence was to obtain information relevant to the current proceedings, as it was thought that Mr Jandu would not provide information unless he was threatened with proceedings.

Master Pester held that the documents were not covered by litigation privilege, on the basis that (in light of the decision in PAG) the dominant purpose was not to be determined solely by what the claimant said it was. It also had to be looked at from Mr Jandu and his insurer’s point of view.

The deputy judge (Mr Robin Vos) overturned that decision, finding that the relevant purpose is the purpose of the person who instigated the document in question. That purpose must be determined objectively based on all the evidence including their subjective intention. In the present case no evidence had been put forward to contradict Mr Davies’ explanation of why the request for information from Mr Jandu had taken the form that it did, and so the deputy judge concluded that the claimant’s dominant purpose was to obtain information for use in the current proceedings.

While the deputy judge went on to find that there was an “element of deception” in the claimant’s request to Mr Jandu, he rejected the defendant’s submissions that:

  1. there was a principle which would prevent a claim to privilege where an opponent in litigation was induced to provide information which they would not have provided had they known the true purpose of the request, and where that true purpose was deliberately concealed or suppressed; and
  2. if there was such a principle, it should be extended to situations involving third parties rather than an opponent in the litigation.

The defendant obtained permission for a second appeal, limited to the question of whether the judge was wrong to reject the submissions at (1) and (2) above. The appeal was heard on an expedited basis as trial was imminent.

Decision

The Court of Appeal dismissed the appeal. Andrews LJ gave the lead judgment with which Sir Stephen Irwin and Baker LJ agreed.

The starting point was that the documents were privileged, as the dominant purpose test was satisfied. The defendant’s case was that privilege was lost because of the form in which the letter was sent (as a letter before claim) rather than an ordinary letter seeking information. On the face of it, that did not provide any justification in principle for precluding the claimant from “relying on an absolute right that derives from the purpose for which the information was sought”.

Andrews LJ agreed with the deputy judge that the PAG case did not assist the defendant, including because it related to the different situation where the court was concerned with the purpose of a meeting. In that specific context, Birss J had held that the intention of the party who arranged the meeting should not be determinative (as it would have been where the subject of the claim for privilege was correspondence) but rather was only one aspect of the overall picture. Birss J had treated the active deception of the bank’s ex-employees, who had no idea that the meeting was an information-gathering exercise, as the critical factor in distinguishing the situation from the normal one where a solicitor was interviewing potential third party witnesses. Whether or not PAG was rightly decided, the deputy judge was right to find that it was distinguishable in the present case.

Andrews LJ said the question in the present case was whether the claimant had lost the right to maintain litigation privilege because of some competing public interest that outweighed it. This, she said, was directly contradicted by what Lord Scott of Foscote said in Three Rivers District Council v Bank of England No 6) [2005] 1 AC 610: “…if a communication or document qualifies for legal professional privilege, the privilege is absolute. It cannot be overridden by some supposedly greater public interest.”

In the light of the principle that legal professional privilege, once acquired, is absolute, subject to waiver or estoppel (which were not argued in this case), Andrews LJ was not prepared to accept that there was a principle of the sort referred to at (1) above.

Even if such a principle did exist, Andrews LJ did not accept that this case involved a third party being deliberately deceived into providing information to which the requesting party was not entitled. What the deputy judge had described as “an element of deception” was very limited, and Andrews LJ said that she would not have characterised it as deception. It was also irrelevant, in that there was a strong basis for inferring that Stradbrooks would have realised that the information sought was to be used for the purpose of the current litigation – or at least there was no evidence that Stradbrooks were misled into believing it was not going to be used for that purpose, or that this would have made a difference to the decision to provide an answer. In any event, it was highly likely that it was information to which the claimant was entitled, regardless of why it was sought, given that Stradbrooks had acted for the claimant in the underlying transaction to which the information related.

As Andrews LJ put it:

“I can see no good reason why there should be a principle that a party that is otherwise entitled to claim litigation privilege over correspondence with a third party should lose it simply because in order to obtain the information it needed, it was forced by the third party’s behaviour to bring pressure on them by threatening litigation against them (even if it did not then intend to carry out the threat) – especially when it was probably entitled to that information in the first place.”

Anna Pertoldi
Anna Pertoldi
Partner
+44 20 7466 2399
Maura McIntosh
Maura McIntosh
Professional support consultant
+44 20 7466 2608