Litigation privilege and family proceedings after SFO v ENRC

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Litigation privilege explained: its relevance in family litigation

 

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. The Law Society’s Gazette wrote that the Society had described the decision as being ‘a boost for the principle of lawyer-client confidentiality’. It was not that. Litigation privilege was explained and affirmed; and little more.

 

Little was said on the main aspect of legal professional privilege (namely legal advice privilege (LAP)); and what was said was obiter. The case was decided on the extent to which the more modest litigation privilege (LP) applies, especially where a corporate body is involved. LP was extensively reviewed (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 generally and 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 impacts on family proceedings looked at.

 

Background

 

The case was an appeal from Andrews J (Director of Serious Fraud Office v Eurasian Natural Resources Corporation Ltd (ENRC) [2017] EWHC 1017 (QB), [2017] 1 WLR 4205). ENRC were anticipating some form of enforcement raid by SFO. They were carefully 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 in motion extensive enquiries as to the background and mostly involving members of their own staff by, amongst others, Dechert, a firm of solicitors.

 

SFO finally decided to ‘accept ENRC for criminal investigation’: that is to pursue their enquiries further. ENRC asserted LPP (ie advice privilege and LP) in relation to documents which had arisen in their internal enquiry. SFO replied with an application, heard ultimately by Andrews J, that there be 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) when asked about the events being investigated.
  • 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.
  • 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 covered by privilege. 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 noted 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…’

 

Although the Court of Appeal heard submissions on the subjects of both LAP and LP, they made their decision on LP alone (at 122]). Their comments on LAP ([124]-[143]) are not necessary to the decision. This centred on the view they took of the ‘dominant purpose test’ for LP in Waugh v British Railways Board [1980] AC 521 (‘Waugh’); a test which still stands. It was cited by the Court of Appeal as follows:

 

‘[103] It was common ground that the test to be adopted in relation to documents prepared for reasons which only included (but were not limited to) the conduct of litigation is that identified by the House of Lords in [Waugh].  The document over which privilege was asserted was a report prepared by officers of the [Board] into a fatal railway accident, it being clear, on the facts, that the report had been prepared for two purposes of equal importance (namely railway safety and litigation), and also that such reports were required to be prepared after all accidents, regardless of whether litigation was contemplated (see the judgment of Lord Wilberforce at pages 530B-531A).  In a judgment with which the other members of the House agreed in terms or in substance, he identified the test to be adopted (at page 533) in these terms:

“It appears to me that unless the purpose of submission to the legal adviser in view of litigation is at least the dominant purpose for which the relevant document was prepared, the reasons which require privilege to be extended to it cannot apply.”’

 

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

 

In Re L (Police Investigation: Privilege) [1997] AC 16, [1996] 1 FLR 731 the House of Lords said LP did not apply to certain expert’s report in care proceedings. Lord Jauncey (giving the only reasoned speech on behalf of the majority in the House) said this was the case, because – he thought – care proceedings were not ‘adversarial’ (not perhaps an obvious conclusion in relation to today’s care proceedings). He 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; though that comment was not part of the ratio of the decision in Vernon.

 

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

 

Re L (Police Investigation) is not directly considered in SFO v ENRC. Since Re L holds that care proceedings (Children Act 1989 Part 4) are not adversarial, and SFO v ENRC concerned proceedings which were adversarial (and therefore that LP applied), the Re L decision is unnecessary to apply here.

 

To bring the discussion of LP full circle, it is important to go back to the rationale for LPP: that the privilege 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 considered essential to a system of justice (Greenough v Gaskell (1833)1 M & K 98 Lord Brougham LC) and 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 freely extended, in cases of anticipated litigation (eg 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 Children Act 1989 Part 4 proceedings are not litigation. One wonders if children and their parents involved in such proceedings would agree? Given the issues involved – the possible loss of a child and their later adoption (in appropriate cases) – it is difficult to see what proceedings are less pregnant with serious litigation probabilities; but thus far in relation to Part 4 proceedings only the House of Lords has opined.

 

In relation to expert evidence obtained in preparation of other family proceedings (family money or private children proceedings) the position on LP remains as explained in SFO v ENRC. A lawyer is entitled to interview witnesses or obtain opinion evidence (subject only to obiter comments of the Court of Appeal in Vernon v Bosley (No 2) [1999] QB 18, [1998] 1 FLR 304, CA), and not to disclose them unless the client agrees.

 

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 Part 4 proceedings, the local authority is not obliged to produce it (though its existence should be disclosed in accordance with basic disclosure principles: FPR 2010 r 21.1(1)).

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