The English High Court has recently handed down two judgments in
relation to privilege and disclosure of documents.
The first case of R (on the application of Ford) v Financial
Services Authority involved a claim for joint interest
privilege and the second, Stiedl v Enyo Law LLP and
others, related to the ability of solicitors to continue
acting in proceedings where they had undertaken a preliminary
review of documents which included privileged documents.
Joint interest privilege
Facts
In R (on the application of Ford) v Financial Services
Authority the Claimant claimed joint interest privilege over
eight emails which were referred to in the FSA's Supplementary
Investigation Report. The Report led to warning notices being
issued to the Claimant (and other individuals, who were also
Interested Parties in this case).
The Claimant and the Interested Parties were executives of Keydata
Investment Services Limited ("Keydata"), which was under
investigation by the FSA. Keydata later went into
administration. As the FSA's investigation progressed
they requested the administrators of Keydata to provide certain
documents, which included documents that were protected by legal
advice privilege. The administrators waived the privilege and
provided the documents. The disclosed documents included
eight emails from Keydata's lawyers over which the Claimant was
claiming joint interest privilege.
The Claimant asserted that Keydata's lawyers were also advising
him and the Interested Parties in their personal capacity and not
simply as directors and officers of Keydata. Although the
lawyers' retainer letter only identified Keydata as the client,
the Claimant asserted that the lawyers were acting for him and the
Interested Parties as well and, it was explicitly contemplated by
them and the lawyers that in time they would become vulnerable to
investigation by the FSA.
Test
The Judge held that in order for joint interest privilege to arise where there is no joint retainer a claimant would need to establish:
- that he communicated with the lawyer for the purpose of seeking advice in an individual capacity;
- that he made clear to the lawyer that he was seeking legal advice in an individual capacity, rather than only as a representative of a corporate body;
- that those with whom the joint privilege was claimed knew or ought to have appreciated the legal position;
- that the lawyer knew or ought to have appreciated that he was communicating with the individual in that individual capacity; and
- that the communication with the lawyer was confidential.
On the facts the Judge was satisfied that the Claimant was
entitled to joint interest privilege.
No privilege for materials from
accountants
Six of the eight emails included material received from
accountants which the lawyers had simply forwarded. Following
the recent Court of Appeal decision in R (on the application of
Prudential plc and another) v Special Commissioner of Income Tax
and others, it was held that privilege did not attach to
material from the accountants simply because it was attached to
emails from the lawyers.
To access the Law Now on the Court of Appeal judgment, please
click
here.
Preliminary review of privileged documents by
solicitors
In Stiedl v Enyo Law LLP and others the Claimant, Bjorn
Steidl, sought an injunction restraining two firms of solicitors
from acting for a group of claimants in other proceedings on the
basis that the solicitors had knowledge of Mr Steidl's
privileged documents.
As part of disclosure given in other proceedings, certain documents
that were privileged to Mr Steidl had come into the solicitors'
possession. The solicitors had undertaken a preliminary
review of the disclosed documents which involved only a superficial
consideration of the face of a document in order to assess whether
it bore any relevance to the issues in the other proceedings.
The preliminary review did not involve a substantive review of the
privileged documents. In addition it was undertaken by
a team of junior lawyers and paralegals most of whom were no longer
part of the team employed by the solicitors working on the other
proceedings.
The Judge dismissed Mr Steidl's application given the nature of
the review undertaken and based on evidence given by those involved
in the process. The Judge was satisfied that there was no
real risk that the privileged information would be recallable
having regard to the lapse of time, the progress of the other
proceedings and the technical nature of the issues involved in the
other proceedings.
Comment
The above two cases provide useful guidance on the law of
privilege and the practical issues that arise whilst dealing with
privileged material.
Identifying the client has always been an important issue for the
purposes of preserving legal advice privilege and it is crucial
that this is done at the outset in order to avoid any ambiguity at
a later stage, which can have undesired consequences.
Finally, in circumstances where a party becomes privy to
confidential and/or privileged information it should take steps
immediately to ring fence the material and avoid any further review
of it until it is established whether the material ought to have
been properly disclosed in any case. This is particularly
important in cases where large volumes of documents are provided in
bulk, where inadvertent disclosure is more probable. Acting
otherwise may prejudice the party's ability to continue acting
in the matter, which can have tactical and cost disadvantages.
Case references
R (on the application of Ford) v Financial Services
Authority [2011] EWHC 2583 (Admin). Please click here for a full copy of the judgment.
Stiedl v Enyo Law LLP and others [2011] EWHC 2649
(Comm). Please click here for a full copy of the judgment.
This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq
Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.
The original publication date for this article was 04/11/2011.
