Commercial litigation podcast series – Episode 19: General update

25 May, 2023

In this 19th episode of our series of commercial litigation update podcasts, we look at developments in a range of areas, including environmental litigation, privilege, class actions, claims against cryptocurrency exchanges, and force majeure.

This episode is hosted by Maura McIntosh, a professional support consultant in our litigation team, who is joined by Julian Copeman, a partner, and Gary Horlock, a senior associate.

Our podcast is available on iTunes, Spotify and SoundCloud and can be accessed on all devices. A new episode is released every couple of months. You can subscribe and be notified of all future episodes.

Below you can find links to our blog posts on the developments and cases covered in this podcast.

Maura McIntosh
Maura McIntosh
Professional support consultant
+44 20 7466 2608
Julian Copeman
Julian Copeman
Partner
+44 20 7466 2168
Gary Horlock
Gary Horlock
Senior associate
+44 20 7466 2917

Litigation privilege not restricted to parties to litigation, and other helpful points regarding privilege

18 April, 2023

The High Court has clarified a number of points relating to legal professional privilege in a recent decision in which it dismissed a claimant’s challenges to a defendant law firm’s assertion of privilege over various categories of documents: Al Sadeq v Dechert LLP [2023] EWHC 795 (KB).

The key points arising from the decision are:

  • Litigation privilege can, in some circumstances, be asserted by non-parties to litigation, such as a victim of an alleged crime. The question is whether the non-party has a sufficient interest in the anticipated litigation such that it seeks legal advice and, in that connection, communicates with third parties to obtain information to enable its lawyers to advise.
  • Legal advice privilege is likely to apply where lawyers are engaged to conduct an investigation, unless there is clear evidence that the engagement does not encompass the provision of legal advice and assistance related to the investigatory work.
  • Part of a document can be redacted and withheld on grounds of privilege without needing to establish that it is severable from the unredacted parts.
  • The test for the application of the iniquity exception to privilege is whether a document was created in furtherance of a fraud or other iniquity. It is not sufficient that the document was generated by or reports on the iniquitous conduct.

Continue reading →

High Court decision shows need for clear evidence if trying to prevent use of privileged material disclosed in error

16 January, 2023

In a recent decision, the High Court has refused an injunction to prevent the claimants’ use of privileged material which the defendants claimed to have disclosed in error: Flowcrete UK Ltd v Vebro Polymers UK Ltd [2023] EWHC 22 (Comm).

While the court can intervene to prevent use of privileged documents where they have been provided to the opponent in error in the course of a disclosure exercise, it will not generally do so unless disclosure was procured by fraud or was an obvious mistake. The present decision highlights that the burden is on the disclosing party to establish both that the documents were provided by mistake and that the mistake was obvious, and the court may take a strict approach in deciding whether that burden has been met.

The decision also acts as a reminder that, even where an obvious mistake has been made, the court may refuse injunctive relief where the documents disclose wrongdoing or inappropriate conduct (as the court did in Pickett v Balkind [2022] EWHC 2226 (TCC), considered here). The threshold appears to be lower than for a finding that the material was not privileged in the first place under the “iniquity principle” (ie that there is no privilege for communications made in furtherance of a crime, fraud or equivalent conduct). In the present case, had the court considered an injunction otherwise justified, it would have refused relief in respect of one category of documents which he said raised questions as to whether a witness statement of one of the defendants contained his own independent evidence.

Finally, the decision is of interest in confirming that litigation privilege is not restricted to communications between a party or its lawyers and third parties – a point that is sometimes questioned. While the point was conceded, it is clear that the court agreed with the concession. Continue reading →

Commercial litigation podcast series – Episode 16: General update

1 December, 2022

In this 16th episode of our series of commercial litigation update podcasts, we look at a couple of recent decisions relating to privilege, two interesting Court of Appeal decisions on good faith and force majeure respectively, and finally we discuss the recent Supreme Court decision in the BTI v Sequana case, which clarifies when directors owe obligations to consider the interests of creditors.

This episode is hosted by Anna Pertoldi, a partner in our litigation team, who is joined by Maura McIntosh, a professional support consultant, and Richard Mendoza, a senior associate.

Our podcast is available on iTunes, Spotify and SoundCloud and can be accessed on all devices. A new episode is released every couple of months. You can subscribe and be notified of all future episodes.

Below you can find links to our blog posts on the developments and cases covered in this podcast.

Anna Pertoldi
Anna Pertoldi
Partner
+44 20 7466 2399
Maura McIntosh
Maura McIntosh
Professional support consultant
+44 20 7466 2608
Richard Mendoza
Richard Mendoza
Senior associate
+44 20 7466 2024

Court of Appeal confirms identity of those instructing lawyers not generally protected by litigation privilege

18 November, 2022

The Court of Appeal has held that the identity of those instructing lawyers on behalf of a corporate client are not generally protected by litigation privilege: Loreley Financing (Jersey) No 30 Ltd v Credit Suisse Securities (Europe) [2022] EWCA Civ 1484. In doing so it largely agreed with the reasoning of the High Court, as summarised in our blog post on that decision.

The court rejected the notion that litigation privilege protects all information falling within a “zone of privacy” around a party’s preparation for litigation. Instead, it emphasised that privilege attaches to communications (including secondary evidence of those communications) rather than information or facts divorced from them. Accordingly, there is no general principle that the identity of those giving instructions to a lawyer for the purposes of litigation will be protected.

The court recognised an exception, where the disclosure of the relevant individual’s identity would inhibit candid discussion with the lawyer and therefore affect the client’s ability to prepare its case – eg because it might tend to reveal something about the content of the communication with the lawyer or the litigation strategy being discussed. But that would have to be explained as the basis for the claim to privilege. Continue reading →

High Court refuses injunction to prevent use of privileged material disclosed in error, where it revealed potential serious breach of court guidance

5 September, 2022

The High Court has refused to grant an injunction to prevent a party using privileged material in a letter exhibited to an opponent’s witness statement filed in support of an interim application, where the material had been included in error but the error was not obvious to the recipient: Pickett v Balkind [2022] EWHC 2226 (TCC).

The decision illustrates that, even if an injunction would otherwise be warranted where there was no obvious mistake, the court may refuse to grant an injunction where the privileged material reveals some sort of wrong on the part of the disclosing party – here a potential serious breach of court guidance relating to the preparation of experts’ joint statements. That appears to be the case whether or not there is sufficiently serious misconduct to mean that the material was not privileged in the first place under the “iniquity principle” (ie that privilege does not apply to protect communications made in furtherance of a crime, fraud or equivalent conduct). It is perhaps not surprising, given that an injunction is a discretionary remedy and may be refused where the claimant does not approach the court with “clean hands”.

The case is also a reminder that legal advisors must be careful not to interfere in the preparation of experts’ joint statements. The lawyers’ role is limited to identifying issues which the statement should address; they should  not invite the experts to consider amendments to the draft statement save in exceptional circumstances, where there are serious concerns that its terms may be unclear or misleading – in which case those concerns should be raised with all experts involved in the joint statement.

Finally, on a separate point, the decision suggests that where a party serves expert evidence which refers to and relies on privileged material, that will act as an immediate waiver of privilege even though the expert has not yet been called to give oral evidence.

Continue reading →

High Court finds identity of those giving instructions to lawyers not protected by litigation privilege

21 June, 2022

In a recent decision, the High Court has held that a claimant could not claim litigation privilege in respect of the identities of the individuals giving instructions to its lawyers on its behalf in relation to the litigation: Loreley Financing (Jersey) No 30 Ltd v Credit Suisse Securities (Europe) Ltd [2022] EWHC 1136 (Comm).

The court found that whether the identity of a person communicating with a lawyer is privileged depends on whether: (i) the communication itself is privileged; and (ii) that privilege will be undermined by the disclosure of the person’s identity. That will depend on the facts of each case. In the present case the court found there was no evidence to show that the privilege would be undermined, and therefore the identity information was not protected by privilege.

The decision is of interest as a reminder that (as found in previous cases) the identity or contact details of the individuals instructing a lawyer may be privileged in some circumstances, but it suggests that those circumstances are likely to be rare. The court rejected a broader proposition that, in the context of litigation privilege, the identity of those providing instructions is protected simply because it falls within a “zone of privacy” around the preparation of a party’s case.

It is also of some (though perhaps largely academic) interest in finding that lawyer/client communications relating to litigation can be covered by litigation privilege, even if they are also covered by legal advice privilege. This point has been the subject of some debate – though, at least arguably, the orthodox position is that the two sub-heads of privilege do overlap in this way. Continue reading →

High Court finds no litigation privilege where expert instructed to try to find backing for potential counterclaim

2 March, 2022

The High Court has rejected a claimant’s claim to litigation privilege over preliminary investigations conducted by a third party expert on the basis that litigation in respect of the matter being investigated was not in reasonable prospect at the relevant time: Kyla Shipping Co Ltd v Freight Trading Ltd [2022] EWHC 376 (Comm). The decision is particularly noteworthy as the deputy judge, Charles Hollander QC, is the author of one of the leading textbooks on privilege, Documentary Evidence (14th ed, Sweet & Maxwell).

As is well-established, litigation privilege applies only to documents prepared for the dominant purpose of litigation that is reasonably in prospect. The present decision shows that where a party anticipates a claim in relation to one matter, it should not assume that litigation privilege will necessarily be available for an exercise to investigate other potential claims or counterclaims. This case suggests that the court will look carefully at whether litigation was in reasonable prospect in respect of those matters at the relevant time: if it finds that the party had mere suspicions, a claim for litigation privilege is unlikely to succeed.

The decision is also of interest for the court’s consideration of whether privilege in later expert investigations (which were accepted as privileged) had been waived by the party’s solicitor referring to them in a witness statement made in support of an application for service out of the jurisdiction. The deputy judge held that there was no waiver, as the circumstances surrounding the investigations had been described only in general terms and there was no reliance on any particular document. However, the decision emphasises the fact-specific nature of the court’s assessment, which underlines that a decision to refer to privileged material in documents such as a witness statement or statement of case should never be taken lightly.

It is also worth noting the deputy judge’s comments on dominant purpose, although he didn’t need to reach a decision on that aspect. The deputy judge referred to Sothebys v Mark Weiss [2018] EWHC 3179 (Comm) (considered here), in which the court found that correspondence with an art expert was not subject to litigation privilege as it was prepared for two purposes: to determine whether a painting was a fake and decide whether to rescind its sale; and for potential litigation if the sale was rescinded. Drawing a parallel with the Court of Appeal’s decision in Highgrade Traders [1984] BCLC 151, which the court in Sothebys had declined to do, the deputy judge in the present case said it was “not obvious” that these were other than two aspects of the same purpose – which would mean litigation privilege would be available. Continue reading →

High Court finds accountants’ investigation report not protected by litigation privilege and considers requirements for obtaining disclosure under the Disclosure Pilot

16 August, 2021

The High Court has granted an application by a claimant state for orders that the defendant bank disclose an accounting firm’s investigation report (and associated documents) originally withheld from disclosure on the grounds of litigation privilege, as well as to disclose certain categories of documents on a Model E or “train of enquiry” basis and make further enquiries for “known adverse documents”: State of Qatar v Banque Havilland SA and others [2021] EWHC 2172 (Comm).

The decision does not establish new principles relating to litigation privilege, but is noteworthy as it underlines the difficulties caused by the dominant purpose test in establishing a claim for litigation privilege where documents were arguably produced for a number of purposes, including to deal with enquiries from regulators, rather than solely for the purpose of anticipated litigation.

For more information see this post on our Banking Litigation Notes blog.

High Court finds litigation privilege applies despite third party being deceived as to purpose of information request

15 June, 2021

In a recent decision, the High Court has found that a pre-action letter sent by the claimant to a third party, and the third party’s response, were subject to litigation privilege, overturning the decision of the Master who had found that privilege did not apply. The court was satisfied that the true purpose of the correspondence was to obtain information for the present proceedings, and therefore the dominant purpose test was met: Ahuja Investments Ltd v Victorygame Ltd [2021] EWHC 1543 (Ch).

The court found that, in considering the dominant purpose test for litigation privilege, the authorities establish that it is the person who instigated the communication or document whose purpose is relevant, whether that is the author or some other person. While the purpose must be determined objectively, that simply means that the decision is one for the court rather than the parties, and in fact the court will take into account the subjective intentions of the instigator. Accordingly, it was the claimant’s purpose in sending the (purported) pre-action letter that mattered, not the third party’s purpose in providing its response.

The decision contrasts with Property Alliance Group v The Royal Bank of Scotland Plc (No. 3) [2015] EWHC 3341 (Ch) (“PAG“) (considered here), in which Birss J held that, in circumstances where witnesses had been deceived as to the purpose of a meeting, it was only fair to assess the dominant purpose from the witnesses’ perspective. In the present case, the deputy judge suggested that PAG should be confined to its unusual facts, where a witness was led to believe that the purpose of a meeting was other than to collect information. Here the deception related to the purpose of documents rather than a meeting, and the third party was aware that information was being sought, though not its true purpose.

While this decision suggests that a party may be able to claim litigation privilege despite having deceived a third party as to the purpose for which information is sought, there are some fine distinctions between this decision and the decision in PAG, and it is not clear how the court is likely to approach such questions in any given situation in the future. It is also worth noting that the court made clear that it did not condone the claimant’s conduct in misleading the third party as to the purpose of the correspondence. Continue reading →