Victorygame v Ahuja [2021] EWHC 1543 (CH)

State of Qatar v Banque Havilland SA and others [2021] EWHC 2172 (Comm)

HEADLINE SUMMARY

A document will attract legal professional privilege if it has been produced for the dominant purpose of proceedings that are reasonably contemplated at the time the document is created.  This type of legal professional privilege, known as litigation privilege, can protect documents even if they are not produced by lawyers or do not contain legal advice. 

In some situations, assessing the purpose of a document will be relatively straightforward, but in others the status of the document is not clear.  Litigation privilege is fact specific and will often be determined by the views of individuals involved in the dispute at the relevant time.  

COMMENTARY

Whether a communication attracts privilege is always an assessment of the substance of communications and the situation at the time.  

While not a cure all, the best approach to litigation privilege will often be to carefully consider the likely status of documents created by third parties in advance of their creation – although that will not always be possible when dealing with an urgent investigation.

In a fast moving situation, it may be necessary to update instructions or their scope and/or consider whether certain aspects of a project should be dealt with separately from others, to avoid creating documents prepared for a dual purpose.

Often when investigators are engaged at the outset of a matter, it is not clear what the end result of their work will be.  But that said, as with all types of privilege, simply placing a label on something or including drafting by rote saying that there is a likelihood that proceedings will follow, is unlikely to be enough.  Similarly, a statement in an engagement letter that litigation is in contemplation and/or instructing third parties through lawyers, rather than instructing them directly, although they may be helpful, are no guarantees of litigation privilege.  

Two recent cases have looked at litigation privilege in respect of communications to and from third parties.

In Victorygame v Ahuja [2021] EWHC 1543 (Ch) Ahuja claimed privilege over a letter of claim sent by their current solicitors to a third party, their former solicitors, and the letter in response.  Victorygame challenged the claim to privilege and applied to the court to inspect both documents.

FACTUAL BACKGROUND

The evidence was that Ahuja's purpose in sending the letter of claim to the former solicitors had been to obtain further relevant information relating to the conduct of the claim against Victorygame.  While proceedings had been threatened against the former solicitors that was not the dominant purpose of sending the letter.  Proceedings were being threatened to extract the desired information.

If it was found that the letters were privileged, there was then an issue as to whether the concealing or suppressing of the true purpose of the letters meant that privilege was lost.

Deception may influence a court's decision as to whether documents properly attract privilege.  In one reported case the underlying meeting which resulted in the document in issue was not privileged (so the issue was whether privilege would protect the resulting document where there was deception as to the purpose of the underlying meeting).  In another case the court suggested that a party subsequently claiming privilege might lose that right if it falsely represented that the purpose of its investigation was one for which privilege could not be claimed. 

KEY LEGAL POINTS

The decisions on deception were distinguished in Victorygame.  The court concluded that the letters were privileged.  It could see no good reason to find that privilege had been lost where in order to obtain the information the party claiming privilege had been forced by the third party's conduct to use the threat of litigation as a lever to extract information.  This was particularly so as Ahuja was most likely entitled to the information held by the former solicitors.

But, in another case, if indications have been given to a third party that any information obtained from them will not be used in proceedings and/or deception is used to obtain information from a third party that there is no clear right to, the outcome might be different.

Litigation privilege is fact sensitive.  So its potential loss is also not subject to blanket rules.  Parties should take care especially if they are suggesting, when engaging with third parties, that documents received from them will not be used in litigation. 

Litigation privilege was again centre stage in State of Qatar v Banque Havilland SA and others [2021] EWHC 2172 (Comm)

FACTUAL BACKGROUND

One of the issues in the proceedings was a presentation concerning the State of Qatar alleged to have been prepared by an employee of the bank defendant.  The presentation had been leaked to the media and upon being informed the bank had engaged PWC to forensically investigate the background of the document.  

Fast forwarding to disclosure in the proceedings ultimately brought by the State of Qatar against the bank, the bank withheld PWC's report and redacted references to its contents on the basis of litigation privilege.  Qatar asserted that the bank was not entitled to do so on the basis that litigation had not been reasonably in contemplation at the time the report was commissioned and/or the report was not for the sole or dominant purpose of the proceedings.

KEY LEGAL POINTS

The court agreed with Qatar.  The assessment of whether litigation is reasonably in contemplation is not whether it’s a mere possibility, but whether there is a real likelihood of proceedings.  Also, that view is not taken through the lens of hindsight.  The answer depends on what the people commissioning a report thought at the time.  A general view that matters could have significant legal and regulatory consequences was not enough.   

In the court's view, the PWC report was obtained for a number of purposes, with little or no evidence that the bank's thinking about its dominant purpose ever changed; the bank's general view, that matters could have significant legal and regulatory consequences, was not enough to attract litigation privilege.