Litigants should take particular care when drafting witness statements to avoid waiving privilege.
In Guest Supplies Intl Limited v South Place Hotel Limited, D&D London Limited[i], the UK High Court held that a reference in a witness statement to communications with a legal adviser regarding a key contractual document constituted waiver of legal professional privilege in any relevant communications with that legal adviser.
The decision shows that privilege can easily be inadvertently lost, and the care that parties and their legal advisers must take when relying in litigation on privileged communications.
The decision also reiterated the principle of fairness that underpins a voluntary waiver of privilege. Parties can, of course, choose whether and to what extent they refer to privileged communications to advance their case, but doing so may have unintended additional consequences, in particular waiver of privilege. Additionally, if a party voluntarily deploys a document or part of a set of documents, the court and the opposing party must not be presented with a partial picture of events, i.e., the disclosing party cannot “cherry pick” documents . Further, a waiver can extend further than intended, resulting in an obligation to search for and disclose all relevant documents as this case demonstrates.
The case concerned a claim for breach of an exclusivity agreement that Guest Supplies Intl Limited (GSIL), the claimant supplier, alleged was part of contractual arrangements agreed with South Place Hotel Limited and D&D London Limited (the Defendants) in 2016. In the Particulars of Claim, GSIL referred to a 2019 document recording the alleged exclusivity agreement entered into by the parties in 2016 (the 2019 Document). The Defendants disputed the exclusivity agreement’s existence and the authenticity of the 2019 Document. In response, the sole director of GSIL, Mr Aristodemou, filed a witness statement stating that the written contract created in 2016 had been lost, and the 2019 Document was a recreation (evidencing its existence), which he had sent to GSIL’s solicitors in 2019 to demonstrate how the final agreement “would have looked”.
The Application for Disclosure
The Defendants applied for specific disclosure of any communications between GSIL and its former solicitors that dealt with the creation, provenance and/or authenticity of the 2019 document and/or matters stated within Mr Aristodemou’s witness statement.
The Defendants accepted that the material they sought was subject to legal professional privilege. However, they contended that GSIL had waived privilege in respect of that material. In doing so, they relied upon two paragraphs of Mr Aristodemou’s witness statement that referred to how he had recreated the 2019 Document and sent it to GSIL’s solicitors. The Defendants contended that, as director of GSIL, Mr Aristodemou had waived privilege in any communications with the solicitors about the creation, provenance, and/or authenticity of the 2019 Document, notwithstanding the inclusion of the phrase “without waiving privilege” in both paragraphs of his witness statement.
Opposing the application, counsel for GSIL submitted that Mr Aristodemou’s witness statement did not have the effect of waiving privilege, arguing that there was no sufficient reference to any privileged document or communication in either paragraph, and, at best, there was a “passing narrative reference” to what Mr Aristodemou did not tell his former solicitors. GSIL (no doubt recognising the effect of Digicel (St Lucia) Lts v. Cable & Wireless Plc[ii]) also accepted that waiver must be determined objectively, and did not argue that the phrase “without waiving privilege” had any particular effect on the issue of waiver.
Waiver of Privilege
Murray J’s judgment found that Mr Aristodemou relied upon his communication with his former solicitors to assert that he never put forward the 2019 Document as being the contemporaneous document he said was created in 2016. The Defendants disputed the existence of such a document in 2016, and Murray J found that the issue went to “the heart of the case”, namely, whether an exclusivity agreement existed between the parties. As such, the court held that there was sufficient reference to privileged communications within the witness statement.
On the question of whether privilege had been waived, Murray J applied PCP Capital Partners LLP and another v Barclays Bank plc [iii]. In particular, he noted that case’s criticism of the “traditional distinction” between reliance on a document’s “effects” (which would not waive privilege) and a document’s “contents” (which would). Murray J also noted that this distinction “should not be applied mechanistically”. Instead, he followed the guidance in PCP Capital Partners that the court should consider “(i) whether any reliance is placed on the privileged material to which reference has been made; (ii) what the purpose of the reliance is; and (iii) the particular context of the case in question”. In applying this guidance, Murray J found that Mr Aristdemou was relying on his communications with his solicitors to prove the authenticity of the 2019 Document, and, and accordingly he (and therefore GSIL) had waived privilege: it was more than a mere “narrative reference”.
Turning then to the appropriate scope of the disclosure, Murray J held that in order to have a proper understanding of the communications between Mr Aristodemou and his former solicitors on which GSIL sought to rely, it was not appropriate to limit the scope of the waiver to Mr Aristodemou’s relevant communication(s) to them. If there was a reply from the former solicitors to Mr Aristodemou asking for clarification of the nature and origin of the 2019 Document, that too would be material, as would any further reply by Mr Aristodemou to such a request for clarification. It would be unfair for the Defendants not to have the full picture.
Murray J granted the order for specific disclosure.
Effect of the Decision
The High Court has recently taken an expansive approach to the waiver of privilege. A reference in a witness statement to legal advice, even in circumstances in which the content of that advice is not set out (as was the case in PCP Partners), or sending documents to one’s solicitors as was the case here, were sufficient to amount to a reference to privileged communications for the purpose of a waiver. As such, both lawyers and clients should be mindful of such references when drafting witness statements, and consider carefully what the effects will be.
[i]  EWHC 3307 (QB)
[ii]  EWHC 1437 (Ch)
[iii]  EWHC 1393 (Comm)