By Stuart Alford QC, Daniel Smith and James Fagan

 Privilege is a fundamental human right guaranteed by the common law, and a principle which is central to the administration of justice. Once a document is subject to privilege, the privilege is absolute: it cannot be overridden by some countervailing rule of public policy”.

These dicta from Andrews J in her decision in Director of the Serious Fraud Office v Eurasian Natural Resources Corporation Ltd [2017] EWHC 1017 are reassuring, but her ruling on the scope of privilege may prove somewhat less so to corporates.

The decision concerned a claim by the Director of the UK Serious Fraud Office (SFO) for a declaration that certain documents generated between 2011 and 2013 during investigations undertaken by solicitors and forensic accountants into the activities of the defendant, Eurasian Natural Resources Corporation Ltd (ENRC) and its subsidiaries were not, as ENRC maintained, subject to legal professional privilege, either legal advice privilege or litigation privilege. The decision is the first to consider the position of legal advice privilege in the context of internal investigation and an SFO investigation.

Key points

The SFO’s claim succeeded and the decision – alongside the RBS Rights Issue Litigation – is essential reading for any corporate wanting to ensure its documents are protected from disclosure in English proceedings. Although subject to appeal, the case established the following (based on the facts of the case):

  1. Documents prepared for the purpose of a criminal investigation (as opposed to a prosecution) did not attract litigation privilege
  2. Documents prepared for the dominant purpose of avoiding a prosecution (as opposed to preparing a defence brief) did not attract litigation privilege
  3. The records of a fact-finding or evidence gathering process did not attract legal advice privilege, even if produced by a lawyer, and even if not verbatim records
  4. A lawyer’s notes and other working papers did not attract legal advice privilege, unless they betray the tenor of legal advice

All these propositions highlight the need to take great care in conducting investigations if there is any prospect of English proceedings, either civil or criminal, and for corporates to take advice on how best to structure and carry out investigations into potential wrongdoing.


The disputed documents fell into four categories:

  1. Notes taken by ENRC’s then legal advisers of the evidence given to them by individuals when asked about the events being investigated.
  2. Materials generated by forensic accountants as part of “books and records” reviews they carried out with a focus on identifying controls and systems weaknesses and potential improvements.
  3. Documents indicating or containing the factual evidence presented by ENRC’s then legal advisors to ENRC’s corporate governance committee and/or its board.
  4. Several documents referred to in a letter to the SFO by ENRC’s replacement legal advisers.

The Court ruled that litigation privilege did not apply to any category and legal advice privilege only attached to the Category 3 documents. Andrews J considered each category of privilege in turn.

Litigation privilege

Andrews J held that one of the conditions for litigation privilege is that the litigation in question must be “adversarial, not investigative or inquisitorial”. Andrews J noted that the purpose of litigation privilege is to enable someone to prepare for the conduct of reasonably anticipated litigation. The party claiming litigation privilege must show that the circumstances rendered litigation a “real likelihood rather than a mere possibility”. This is an objective test, albeit the Court must consider the actual state of mind of the party claiming litigation privilege.

Investigations distinct from prosecutions

ENRC argued that a criminal investigation by the SFO should be treated as adversarial litigation. Andrews J disagreed. An SFO investigation is a preliminary step distinct from and prior to any decision to prosecute. The reasonable contemplation of a criminal investigation does not necessarily equate to the reasonable contemplation of a prosecution, and each case would turn on its facts.

Andrews J noted criminal proceedings were different to civil proceedings, where the latter might be commenced (and therefore reasonably in contemplation) even without a proper foundation. Accordingly, criminal proceedings “cannot be reasonably contemplated unless the prospective defendant knows enough about what the investigation is likely to unearth or has unearthed to appreciate that it is realistic to expect a prosecutor to be satisfied that it has enough material to stand a good chance of securing a conviction”.  On the facts,  Andrews J did not accept that anyone regarded a prosecution of ENRC as anything more than a possibility, or even that ENRC believed that evidence implicating it in wrongdoing was likely to emerge from an investigation.

Dominant purpose of preventing prosecution

In any case, Andrews J held that none of the disputed documents was created for the dominant purpose of deployment in, or obtaining legal advice relating to the conduct of, criminal proceedings. Taking legal advice in relation to the conduct of future contemplated criminal litigation (e.g. preparing a defence brief) was not even a subsidiary purpose of the creation of those documents, let alone the dominant purpose.

Andrews J rejected ENRC’s submission that litigation privilege extends to third party documents created in order to obtain legal advice as to how best to avoid contemplated litigation. The judge held that it was one thing to equip oneself with evidence to enable you to conduct your defence (e.g. considering evidence and tactics) free from the risk that your opponent will discover how you are preparing yourself; it is something entirely different to equip yourself with evidence that you hope may enable you (or your legal advisers) to persuade your opponent not to commence proceedings against you in the first place.

Legal Advice Privilege

Andrews J reaffirmed the long-standing proposition that legal advice privilege attaches to all communications passing between the client and its lawyers, acting in their professional capacity, in connection with the provision of legal advice, without the need for litigation to be contemplated.

However, Andrews J held that case law did not support the contention that where the lawyer is carrying out or directing a fact-finding or evidence gathering exercise where litigation is not in contemplation, the fruits of their labours should be privileged from disclosure, independent of any communication, simply because the purpose of the exercise is to enable advice to be given. Documents that would not be privileged if not made by a lawyer do not acquire privilege simply because a lawyer has created it. To attract privilege, such documents must betray the trend of legal advice given on the client’s behalf.

Andrews J rejected ENRC’s submissions that if a solicitor is retained by a company to carry out investigations in order to provide the company with legal advice, and that requires her to speak to persons other than the directly instructing body within the company, the substance of her communications with those persons is governed by legal advice privilege. Andrews J, following RBS Rights Issue Litigation and Three Rivers, held that whilst an employee may be authorised to hand over the information, he does not thereby become part of the confidential lawyer/client relationship; his act in handing it over cannot be treated as a communication by the company with its lawyers for the purposes of seeking receiving the legal advice. Where the party asserting privilege is a corporate entity, legal advice privilege attaches only to communications between the lawyer and those individuals who are authorised to obtain legal advice on that entity’s behalf.

Andrews J accepted that in the context of a company the person giving the instructions to counsel (e.g. in house counsel) may not necessarily be the same as the person receiving the advice (e.g. a board member).  However, Andrews J did not accept that any of the persons interviewed were authorised to seek or receive legal advice on behalf of ENRC.

As a sub-category of legal advice privilege, Andrews J also considered privilege attaching to a lawyer’s working papers. In accordance with the general position, these papers will only be privileged if they would betray the tenor of the legal advice given. Thus, a client cannot obtain the protection of legal advice privilege over interview notes that would not be privileged if she interviewed the witness herself, simply because her lawyer conducted the interview. On the facts of the case, the Category 3 documents, slides prepared by ENRC’s external lawyers for the specific purpose of giving legal advice to the ENRC board, were privileged, even if they referred to factual information.