Litigation privilege and the dominant purpose where a meeting was secretly recorded/use of a document inadvertently disclosed

http://www.bailii.org/ew/cases/EWHC/Ch/2015/3341.html

After litigation had commenced between the parties, the claimant's managing director arranged to meet two former employees of the defendant. The reason he gave for these meetings was said to be a "catch up" (the employees having worked with the managing director whilst employed by the defendant) and to discuss the possibility of working with the claimant in the future. However, the managing director surreptitiously (and unbeknownst to the former employees) made audio recordings of these meetings. The claimant subsequently claimed litigation privilege over the recordings. The issue discussed in this case was whether the recordings had been made "for the sole or dominant purpose of conducting the litigation".

Birss J held that a verbatim recording or transcript (as opposed to a private note) of a non-privileged conversation is not privileged even though it can be said that the reason the recording was made was for use in the litigation (and it makes no difference whether the conversation took place between the parties themselves or between one party and a potential witness or other third party). It was therefore necessary to determine whether the conversation itself had been covered by litigation privilege.

The judge noted that the dominant purpose here was not clear since the claimant held the meetings in order to gather evidence for the litigation, whereas the former employees attended for a catch up and possible future business. He held that the critical point was that the claimant had deceived the former employees, and induced them to speak freely by means of that deception. For that reason, this case differed from a solicitor arranging a meeting with a potential witness in order to take a proof of evidence (and the witness having a variety of reasons for agreeing to meet). Accordingly, the dominant purpose should be assessed from the point of view of the two former employees, and so litigation privilege did not apply.

Although not required to decide the point, the judge also noted that there is a debate amongst academics as to whether a conversation has to be confidential in order to attract privilege. He acknowledged that a solicitor taking a proof of evidence may share confidential information with a witness (who may then speak to the other side too) but that does not affect whether the proof itself is covered by litigation privilege.

The defendant had found out about the recordings because of an email which itself was privileged but which was inadvertently disclosed to the defendant's solicitors. CPR r31.20 provides that "where a party inadvertently allows a privileged document to be inspected, the party who has inspected the document may use it or its contents only with the permission of the court".

Here, it would have been obvious to any reasonable solicitor that the email was likely to be privileged because it was sent from the claimant to the claimant's solicitor. Despite that, the defendant's solicitors had made use of it by contacting the two former employees, without first seeking the permission of the court. The fact that the email indicated that there may have been serious non-disclosure by the claimant did not justify the conduct of the defendant's solicitor. Accordingly, the judge held that a costs sanction should be imposed.

COMMENT: Normally, the existence of the requisite dominant purpose will be assessed objectively. A further issue decided by the judge in this case was that that objective assessment ordinarily requires the court to decide the matter, taking into account all the evidence (including the parties' intentions), as opposed to seeking the viewpoint of a dispassionate observer who, for example, would have been unaware of the claimant's secret purpose. However, here, because of the deception, the fair approach was to instead look at the matter from the point of view of the two employees. This case is also a reminder that care should be taken if a document is inadvertently disclosed to you – any "use" of that document (or its contents) for the purpose of the litigation (even if only to carry out an investigation into the background circumstances), without the permission of the court, can result in a costs sanction against the party.