Legal Privilege

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A recent decision reminds litigants about the dangers of referring to legal advice in witness statements.

By Oliver E. Browne and Alex Cox

The English courts have recently taken an expansive approach in finding waivers of privilege when legal advice is referred to in witness statements, pleadings, and submissions.[i]

The High Court’s recent decision in Paul Clements v. Adam Frisby[ii] further reminds litigants about the dangers of referring to legal advice when advancing their case. However, it also demonstrates the nuanced and fact-specific approach the court will take in determining whether there has been a waiver and, if so, how widely that waiver extends.

Litigants should take particular care when drafting witness statements to avoid waiving privilege.

By Dan Smith and Aisling Billington

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.

Two cases illustrate the narrow scope of application for exceptions to the without prejudice rule of legal privilege.

By Stuart Alford and Clare Nida

Background

In two recent judgments, the High Court found exception to the ‘without prejudice’ rule of legal privilege. The rule protects statements made by parties to a dispute (whether written or oral statements) in a genuine attempt to settle the dispute. There are certain situations in which this public policy justification will be outweighed by other factors if the fairness of judicial proceedings is at risk. Motorola Solutions, Inc. v Hytera Communications Corporation Ltd[1] and Berkeley Square Holdings v Lancer Property Asset Management Limited[2] clarify the scope of certain aspects of these exceptions, namely the “unambiguous impropriety”, misrepresentation/fraud, and the “Muller” exceptions.

The Court examined “without prejudice” privilege and litigation privilege as they apply to settlement agreements and their inspection by co-defendants.

By Oliver E. Browne

In BGC Brokers LP & Ors v. Tradition UK & Ors,[i] the English Court of Appeal unanimously dismissed an appeal against an order for a settlement agreement to be disclosed in unredacted form. The Court found that neither “without prejudice” privilege nor litigation privilege applied to the settlement agreement, even though it reproduced confidential communications that would themselves fall squarely under one or both heads of privilege. The Court held that the reproduction and incorporation of confidential communications within the settlement agreement formed part of a new and distinct communication, the purpose of which was neither to negotiate a settlement agreement nor to gather evidence for the purposes of the litigation.

“Without prejudice” privilege applies to written or oral communications that are made for the purpose of a genuine attempt to settle a dispute between the parties.[ii]

Litigation privilege applies to confidential communications between a client and its solicitor, or either of them and a third party, for the dominant purpose of obtaining information or advice in connection with existing or reasonably contemplated litigation.[iii]

Companies must mitigate risks to antitrust privilege posed by cross-border megadeals and increased regulatory demand for documentation.

Richard Butterwick, John Colahan, Martin Davies, Jonathan Parker, Oliver Middleton, Gregory Bonné, and Catherine Campbell

A strong M&A market has driven a high volume of megadeals across the globe in recent years, with acquirers turning to ambitious transactions. Antitrust issues frequently arise on such complex deals, and in an evolving antitrust environment, taking a planned and strategic approach to privilege during the deal process is crucial. Balancing the need to run a thorough due diligence exercise and transparent deal process with the need to maintain confidentiality and privilege can be challenging. In our view, practical planning for privilege issues forms a key part of successfully navigating international M&A deals.

The decision clarifies how lawyer-client privilege applies in the context of transactions.

By Daniel Smith and James Fagan

The recent English High Court decision Raiffeisen Bank International AG v Asia Coal Energy Ventures Limited and Ashurst provides guidance on the application of legal advice privilege in a transaction context, confirming that confidential client instructions can be privileged even if the legal adviser has been instructed to provide a third party with confirmations based on those instructions.

This case offers a useful overview of the application of privilege to communications between lawyers and clients during transactions. The decision sets out a number of useful principles regarding privilege and client instructions:

  • For lawyer-client communications to benefit from privilege they must take place in a legal context.
  • Confidentiality is necessary for privilege to apply to communications, but it is not determinative.
  • Communications that do not contain legal advice can still be covered by legal advice privilege provided they form part of a continuum of communications between lawyer and client.
  • When instructing a legal adviser to disclose confidential information to third parties, clients must take care to ensure that underlying communications remain privileged.

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.