Litigation privilege and family proceedings after SFO v ENRC

Litigation privilege explained

In Serious Fraud Office (SFO) v Eurasian Natural Resources Corp Ltd [2018] EWCA Civ 2006 (judgment, 5 September 2018) The Law Society intervened: it was thought the case would prove important as a review of legal advice privilege which might impact on solicitors. In the end little was said on LAP; but the role and extent of litigation privilege (LP), especially where a corporate body is involved, was extensively reviewed and explained (judgment was jointly by Sir Brian Leveson P, Sir Geoffrey Voss Chancellor of the High Court and McCombe LJ). So what does the judgment mean for a family lawyer?

To answer this question the background and facts of the case must be touched on; the meaning of legal professional privilege (LPP) explained; the meaning and extent of LP looked at, in the light of the judgment; and the contexts in which LP may impact on family proceedings considered.

Background

The case was an appeal from Andrews J (SFO v ENRC [2017] EWHC 1017 (QB), [2017] 1 WLR 4205). ENRC were anticipating some form of enforcement raid by SFO. They were considering self-reporting under SFO guidelines as a result of allegations of criminality on the part of certain African companies it was seeking to acquire. ENRC set up extensive enquiries as to the background, mostly involving members of their own staff by, amongst others, Dechert, a firm of solicitors.

SFO finally decided to ‘accept ENRC for criminal investigation’. ENRC asserted LPP in relation to documents which had arisen in their internal enquiry. SFO replied with an application, heard by Andrews J, for a declaration that ENRC must disclose three categories of document (at [46]: a fourth category – ‘Category 3’ – did not feature in the appeal):

  • The first category was notes taken by Dechert of the evidence given to them by individuals (including employees and former employees or officers of ENRC and of its subsidiary companies).
  • Next (‘Category 2’) was of the ‘books and records of Forensic Risk Alliance (FRA), a firm of forensic accountants and of reviews they carried out in London, Zurich, Kazakhstan and Africa.
  • Finally, ‘Category 4’ comprised 17 documents referred to in a letter dated 22 August 2014 sent to the SFO by a barrister’s chambers.

Andrews J held that none of these were privileged. The Court of Appeal held that all, save a couple of emails, were covered by LP.

Legal professional privilege and litigation privilege

So what is legal professional privilege? And what is the significance of litigation privilege, its sub-branch, especially in the light of SFO v ENRC? As explained by the Court of Appeal at ([63] and [64]) the meaning of LPP was summarised by Lord Carswell in Three Rivers District Council and ors v Governor and Company of the Bank of England (No 6) [2004] UKHL 48, [2004] 3 WLR 1274:

‘[105] … The cases establish[ed] that, so far from legal advice privilege being an outgrowth and extension of litigation privilege, legal professional privilege is a single integral privilege, whose sub-heads are legal advice privilege and litigation privilege, and that it is litigation privilege which is restricted to proceedings in a court of law in the manner which the authorities show…’

Further Lord Carswell explained LP as:

‘[102] … Communications between parties or their solicitors and third parties for the purpose of obtaining information or advice in connection with existing or contemplated litigation are privileged, but only when the following conditions are satisfied:

(a) litigation must be in progress or in contemplation;

(b) the communications must have been made for the sole or dominant purpose of conducting that litigation;

(c) the litigation must be adversarial, not investigative or inquisitorial.’

The case law background to this short explanation was set out in full in Bloomsbury Family Law Briefing (March 2018).

Litigation privilege in SFO v ENRC: ‘dominant purpose test’

The Court made their decision on LP alone, and needed not extensively to consider LAP. This centred on the view they took of the ‘dominant purpose test’ in Waugh v British Railways Board [1980] AC 521 (‘Waugh’). The Court confirmed application of this principle at paras [91], [101] and [113] and concluded that LP applied to the documents in categories 1, 2 and 4 (other than the two emails) as follows:

‘[119] … We have concluded that the judge ought to have concluded that the documents were brought into existence for the dominant purpose of resisting or avoiding contemplated criminal proceedings against ENRC or its subsidiaries or their employees.’

Litigation privilege and children proceedings

As noted in the BFLB article (March 2018), the House of Lords have said that LP does not apply in Children Act 1989 Part 4 proceedings (ie ‘public law’ children cases) where expert evidence has been obtained with permission of the court. It was said that such proceedings were not ‘adversarial’ (not an obvious conclusion for today’s care proceedings). In Re L (Police Investigation: Privilege) [1997] AC 16, [1996] 2 FCR 145, [1996] 1 FLR 731 Lord Jauncey said:

‘Thus the court is seeking to reach a decision which will be in the best interests of someone who is not a direct party and is granted investigative powers to achieve that end. In these circumstances I consider that care proceedings under Part IV of [Children Act 1989] are so far removed from normal actions that litigation privilege has no place in relation to reports obtained by a party thereto which could not have been prepared without the leave of the court to disclose documents already filed or to examine the child (emphasis added).’

By ‘Part IV’ he was speaking of care or ‘public law’ proceedings. As Privilege (2013, 3rd Ed) by Colin Passmore stresses (at [3-235]), this quote applies only to care proceedings, not to proceedings under Children Act 1989 generally; though it is said to have been extended by obiter comments in the Court of Appeal in Vernon v Bosley (No 2) [1999] QB 18, [1998] 1 FLR 304, CA. That comment was not part of the ratio of the decision in Vernon. On LP Hershman and McFarlane on Children Law and Practice (Bloomsbury Professional, loose-leaf) at [3041] say:

‘Litigation privilege is an essential component of the adversarial procedure adopted in ordinary civil litigation. It prevents one party being compelled to disclose expert evidence and similar material which has been prepared for use in pending or anticipated litigation. Litigation privilege does not apply to proceedings under CA 1989 as it is excluded by necessary implication from the terms and overall purpose of the 1989 Act.’

So far as they assert that LP does not apply to proceedings under CA 1989 I wonder if they are right? And what of the rights of a child (whom Lord Jauncey excluded from his review) in such proceedings (see eg and United Nations Convention on the Rights of the Child 1989, Art 24)? When are proceedings ‘adversarial’ and when ‘inquisitorial’ (so LP may not apply)? These are subjects for another day….

Litigation privilege and family proceedings

The rationale for LPP is that it is essential to the administration of justice and to securing a fair trial. It enables the client to ‘make a clean breast’ of the client’s legal affairs without fear that what is said will be passed on to others (Anderson v Bank of British Columbia (1876) 2 ChD 644 at 649 per Sir George Jessel MR). It is compatible with European Convention 1950, Art 6(1) (right to a fair trial). It gives the client an absolute right to refuse to produce to the court material which would otherwise be relevant to one or more issues before the court (R v Derby Magistrates’ Court exp B [1995] UKHL 18, [1996] 1 AC 487, [1996] 1 FLR 513).

By 1980 it was beyond question that this right to consult a lawyer, in cases of anticipated litigation, extended to the lawyer interviewing witnesses and obtaining expert evidence. In other words, that a lawyer could turn over any stone without fear that the lawyer might have to tell everyone in the case what was under the stone. Re L says, in effect, that CA1989, Part 4 proceedings are not litigation. Given the issues involved – the possible loss of a child and their later adoption (in appropriate cases) – it is difficult to see what was more pregnant with serious litigation; but thus far in relation to Part 4 proceedings only the House of Lords has opined.

If a local authority accumulates evidence in a case, once it is clear that care proceedings might result, material arising from enquiries by their lawyers would be covered by LP (circumstances almost precisely analogous to ENRC in the case). If the lawyers acquire the material when the dominant purpose is possible care proceedings, the local authority is not obliged to produce it.

David Burrows is leading a series of five afternoon seminars this Autumn, including those on Evidence and family proceedings and Disclosure: privilege and confidentiality. For more information, click here.

Written by Ellie MacKenzie

Subscribe to the Bloomsbury Professional Law Newsletter

Law Online

Bloomsburyprofessionallaw Online research for solicitors and barristers practising in English law Free Trial

Need Help?

Bloomsburyprofessionallaw If you need any help with finding publications or just ask a question. Talk to an Advisor: 01444 416119
customerservices@bloomsburyprofessional.com
or send us a message