By Stuart Alford QC, Daniel Smith and Clare Nida
The English Court of Appeal provides further guidance, approving ENRC, on when litigation privilege will not apply to information gathering materials.
The English Court of Appeal (Criminal Division) has ruled that litigation privilege does not apply to a statement an employee makes to his employer’s solicitors as part of their investigation into a death in the workplace. The court’s ruling in R (for and on behalf of the Health and Safety Executive) v Paul Jukes [2018] EWCA Crim 176 is the third judgment on litigation privilege in just nine months.
Case background and previous decisions
The appellant, Paul Jukes, was the transport and operations manager at a waste and recycling company. In 2010, an employee was fatally injured on site. A few weeks later, Jukes made and signed a statement to his employer’s solicitors who were investigating the incident, in which he said he had responsibility for health and safety onsite.
When the Health and Safety Executive (HSE) and the police interviewed Jukes 16 months later, he denied responsibility for health and safety. At trial, the prosecution relied on Jukes’ earlier statement, and Jukes was convicted for failing to discharge the duty to take reasonable care of employees’ health and safety. The court sentenced Jukes to nine months’ imprisonment.
On appeal, the court considered the admissibility of Jukes’ statement, which Jukes asserted was protected by litigation privilege.
The Three Rivers test for litigation privilege requires that:
(i) Litigation must be in progress or in contemplation
(ii) The communications must have been made for the sole or dominant purpose of conducting that litigation
(iii) The litigation must be adversarial, not investigative or inquisitorial
In Director of the Serious Fraud Office v Eurasian Natural Resources Corporation Ltd [2017] EWHC 1017 (ENRC), Andrews J held that litigation privilege did not apply to documents prepared for the dominant purpose of (a) a criminal investigation (as opposed to a prosecution), or (b) avoiding a prosecution (as opposed to preparing a defence brief). Further details on the decision are available in this Latham.London blog post and this Latham Client Alert.
The more recent decision in Bilta (UK) Ltd v Royal Bank Of Scotland Plc & Anor [2017] EWHC 3535 (Ch), focused on whether the documents were created for the sole or dominant purpose of conducting that litigation, the claimant having accepted that the documents were created at a time when litigation was in contemplation, and that that litigation was adversarial. The judge held that the purpose of the creation of the document is a question of fact in each case, and that in that case the creation followed a “watershed moment” after which the company instructed litigation solicitors, and the documents were for the dominant purpose of conducting litigation. Further details are available in this Latham.London blog post and this Latham Client Alert.
Judgment
Lord Justice Flaux followed the approach in ENRC and found that litigation privilege did not apply to the statement Jukes made in the internal investigation. The following factors were relevant in Flaux LJ’s judgment:
- At the time of the statement, no one at the company knew what the investigation would unearth. Flaux LJ agreed with Andrews J’s analysis in ENRC: “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.”
- HSE did not interview Jukes for a further 16 months after his statement, and had not at this stage made a decision to prosecute. Furthermore, there was no evidence from Jukes or the company that either had enough knowledge to appreciate that it was realistic to expect the HSE to be satisfied that it had enough material to stand a good chance of securing convictions.
- Criminal proceedings have a higher threshold for the contemplation of proceedings than civil proceedings. Again, quoting Andrews, J: “A person may well have reasonable grounds to believe they are going to be subjected to a civil suit at the hands of a disgruntled neighbour, or a commercial competitor, even where there is no properly arguable cause of action, or where the evidence that would support the claim has not yet been gathered. Criminal proceedings, on the other hand, cannot be started unless and until the prosecutor is satisfied that there is a sufficient evidential basis for prosecution and the public interest test is also met.”
In light of R v. Jukes, companies must proceed with caution when investigating and taking statements in an internal investigation, as the court may not find that these statements attract litigation privilege. Latham & Watkins will continue to monitor and report on related legal developments.