The Court of Appeal has confirmed that, where one client to a joint retainer had assigned to a third party its claims against the jointly retained solicitors, the assignee (and its solicitors) were entitled to access the joint retainer file in order to pursue those claims, regardless of the other joint privilege holder’s objections. It did not matter that, on the unusual facts of this case, that meant disclosure to the solicitors who were on the other side of long-running litigation: Travelers Insurance Company Ltd v Armstrong [2021] EWCA Civ 978.

The decision is of interest as a rare example of the Court of Appeal considering questions of joint privilege, which arises where two parties jointly retain the same solicitor. The decision helpfully summarises the relevant principles, including that neither party can assert privilege as against the other in respect of documents created pursuant to the joint retainer, but either can assert privilege as against any third party. The privilege can only be waived jointly and not unilaterally.

The decision also helpfully clarifies the effect of assignment on the right to assert privilege where there is a joint retainer. It confirms that, where one party has assigned its claims relating to the joint retainer, the successor in title stands in the shoes of the original party and has the same rights as the original party. In particular, the other joint privilege holder cannot prevent disclosure to the assignee. The existence of a potential conflict of interest in this case due to the identity of the assignee, and their role in the underlying dispute, did not affect this principle – though suitable safeguards to protect confidentiality would have to be put in place.

Background

The present dispute arose in the aftermath of the PIP breast implant group litigation against Transform Medical Group (CS) Ltd (“Transform”), in which Hugh James LLP (“Hugh James”) had acted as lead solicitors for the claimants under conditional fee agreements. Travelers Insurance Company Ltd (“Travelers”) had provided product liability insurance to Transform which covered some, but not all, of those claims.

Transform and Travelers had jointly engaged Berrymans Lace Mawer LLP (“BLM”) to act on their behalf in relation to the insured claims. BLM was also retained by Transform alone in relation to the uninsured claims and by Travelers alone in relation to additional matters.

The insured claims were settled and Transform entered into administration. The uninsured claimants obtained summary judgments against Transform, and sought third party costs orders against Travelers (which were ultimately refused following an appeal to the Supreme Court: Travelers Insurance Company Ltd v XYZ [2019] UKSC 48, considered here).

The Administrators assigned to Hugh James Involegal LLP (“HJI”) (a legal practice wholly owned by the equity partners of Hugh James), in return for a share of recoveries, any claims Transform had against BLM (and counsel instructed by BLM) in relation to their conduct of the PIP Litigation. Under the assignment, the Administrators agreed to provide HJI “with reasonable access to all documentation which is in the Administrators’ possession and control relating to Transform’s defence in the [PIP] Litigation, to include any privileged documentation”. HJI instructed Hugh James to act for it in relation to the assigned claims.

In consequence of that assignment, the administrators sought disclosure of the joint retainer files to HJI, and their solicitors, Hugh James. Travelers objected. The question was determined as a preliminary issue. The deputy judge found against Travelers and ordered disclosure. Travelers appealed.

Decision

The Court of Appeal dismissed the appeal. Coulson LJ gave the lead judgment, with which Asplin and King LJJ agreed. He summarised the principles from the relevant authorities as follows:

  • In respect of privileged documents, a successor in title stands in the shoes of his or her predecessor. Thus, if the predecessor in title is entitled to the disclosure of privileged documents, so too is the successor in title.
  • The right of a successor in title to disclosure of such documents, and to assert privilege in such documents as against third parties, is not a matter of the terms of a particular assignment or deed. It is a right that passes as a matter of law.
  • The scope of the rights of a successor in title will always depend on precisely what it is that has been passed on or assigned to him. Thus if a solicitor was jointly retained to deal with an IP claim and a fatal accidents claim, and the successor in title is an assignee of claims consequential upon the IP claim only, the successor in title is not entitled to see the privileged documents relating to the fatal accidents claim.
  • Legal professional privilege is a fundamental right. In a case of joint privilege, it is therefore a fundamental right of each party who has jointly retained the solicitors in question. There is no authority to suggest that one party’s right to claim joint privilege might override the rights of the other party who jointly retained the solicitors.
  • Whilst neither party can claim privilege as against the other in respect of any documents created pursuant to the joint retainer, as against any third party (other than a successor in title, who stands in the shoes of the original party), both parties can maintain a claim for privilege in respect of any such documents.
  • As the privilege is joint it can only be waived jointly and not unilaterally.

Applying those principles to the present case, Coulson LJ said he was in no doubt that HJI were entitled to disclosure of the joint retainer files as a matter of principle. They were Transform’s successors in title in respect of the claims against BLM and counsel arising out of the PIP group litigation, so were entitled in law to the same rights as Transform in connection with those claims. Transform had an unequivocal right to see the documents covered by joint privilege since they were one of the joint clients. HJI, as their successors in title, had precisely the same right.

Coulson LJ rejected as untenable the suggestion that HJI were, in reality, third parties and not successors in title. There was no basis on which to conclude that, although they are successors in title, HJI should be treated as third parties for the purposes of joint privilege.

He also rejected the suggestion that, because legal professional privilege was a fundamental right, Travelers’ assertion of their right to privilege in the joint retainer file could in some way override HJI’s right, as successors in title, to disclosure. Each party to a joint retainer is entitled to claim privilege as against the world, but neither is entitled to claim privilege as against the other. One party’s right to joint privilege did not trump the other’s right to disclosure of the documents.

The judge was therefore correct to conclude that, as a matter of principle, HJI were entitled to disclosure of the joint retainer file.

It made no difference that, as a result of the assignment, HJI (and therefore their solicitors, Hugh James), who were on the other side of long-running litigation, would see the privileged documents. No question of conflict of interest could prevent the disclosure to HJI. There would need to be strict confidentiality safeguards, but the judge dealt with those and they were not the subject of the appeal. As Coulson LJ put it, merely because a principle of law gives rise to practical or logistical difficulties which need to be catered for is not a reason for ignoring or disapplying that principle altogether.

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