In Pickett v Balkind,(1) the Technology and Construction Court (TCC) held that a letter, inadvertently disclosed in an application bundle, which revealed a potentially serious breach of court guidance, was not privileged. The Court refused to grant the disclosing party an injunction restraining its use in the proceedings.
The underlying dispute concerned residential property damage caused by tree root subsidence. The parties' experts were in the process of preparing a joint statement when the claimant applied for an adjournment on the grounds that its expert would not be available for the proposed trial dates as he would be recovering from surgery. An unredacted letter from the expert explaining the situation was exhibited to the claimant's solicitor's witness statement.
Privileged material
The letter contained discussion between the expert and the claimant's solicitors about the content of the joint statement, indicating that the claimant's counsel had provided input. The defendant's solicitors complained that the intervention of counsel was a breach of court guidance that legal advisors must not be involved in the negotiation or drafting of joint statements.(2)
The claimant asserted privilege over this material, claiming it had been disclosed by obvious mistake, and refiled its adjournment application with no reference to the letter. After the defendant indicated his intention to rely on the letter at the upcoming pre-trial review, the claimant sought an injunction restraining its use because it was disclosed by obvious mistake. The defendant's responsive witness statement stated that the letter had clearly been disclosed deliberately, as it was explicitly referred to in the witness statement evidence, and therefore privilege had been waived. In dealing with the following issues, the case did not expressly consider Practice Direction 51U and instead proceeded under part 31 of the Civil Procedure Rules (CPR).
Court's equitable jurisdiction to correct inadvertent disclosure of privileged documents
The Court referred to several authorities, mainly to Al Fayed v Commissioner of the Police of the Metropolis(3) to explain its equitable jurisdiction to restrain use of privileged documents in the case of an obvious mistake. A solicitor owes no duty of care to a disclosing party and is generally entitled to assume that any privilege, which might attach to the document, has been waived. However, the Court has an equitable jurisdiction to prevent the use of documents mistakenly made available for inspection in certain circumstances, including granting an injunction to restrain use of documents which have been disclosed by obvious mistake. A mistake is "obvious" if:
- the receiving solicitor appreciates there has been a mistake before making use of the document; or
- it would be obvious to a reasonable solicitor in that position that a mistake has been made; and
- there are no other circumstances which would make it unjust or inequitable to grant an injunction.(4)
Disclosure of letter was not "obvious mistake" and could not be corrected
The Court believed that the disclosure of the letter was a genuine mistake by the claimant's solicitor but, because the letter was explicitly referred to in the claimant's solicitor's witness statement, the defendant's solicitor reasonably thought that the disclosure was deliberate and had therefore raised concerns about the potential breaches of court guidance revealed in the letter. The claimant's solicitor's conduct in disclosing the letter was such that a reasonable solicitor would not have realised that there had been a mistake.
Iniquity made injunction (and potentially privilege) impossible
Even if there had been a case for an injunction, the Court considered it would be inequitable to grant an injunction over material that revealed a serious breach of court guidance. The Court must ensure there can be "no confidence in iniquity". The Court was concerned that the defendant's solicitors' concern regarding the breach should be addressed; to leave it unanswered would promote a sense of injustice. The fact that the letter revealed iniquity may also have meant that privilege could not attach to the letter at all as privilege does not apply to communications made in furtherance of crime, fraud or other equivalent conduct (the iniquity exception).
In any event, the Court held that privilege had been waived over the letter. The Court explained that only information that is confidential as against an opponent can be privileged. Therefore, when the claimant disclosed the letter to the defendant, it lost its quality of confidentiality and therefore could no longer be considered privileged. The Court also held that waiver could not be limited to the section of the letter dealing with the expert's unavailability, disagreeing with the reasoning of Vinelott J in Derby v Weldon.(5) The fact that the letter was only relevant to the merits of the adjournment application rather than the merits of the whole case did not matter; the Court held that privilege had been waived over the whole letter because the whole letter had been deployed.
Permission granted for defendant to deploy letter and cross-examine expert
The Court then considered the defendant's cross-application for:
- permission to deploy the letter at trial, which was granted for the reasons above;
- production of written instructions, comments, or "aide memoire" provided to the claimant's expert under CPR 35.10(4) on the basis that there were reasonable grounds to consider that the statement of instructions to the expert were inaccurate or incomplete; and
- permission to cross-examine all the claimant's experts at trial.
The Court was not satisfied that all communications between experts and those instructing them were part of their instructions under CPR 35.10, particularly as the rule is more concerned with the factual basis for the expert's instruction rather than their independence.
Instead of granting the defendant's application under CPR 35.10, the court permitted the defendant to cross-examine the expert on the comments and aide memoire on the basis that it was relevant to the issue of the expert's independence. The court held that the aide memoire was not privileged because it had been referred to in the letter over which privilege had been waived.
Where privileged material is accidentally disclosed but the receiving party genuinely thinks the disclosure was deliberate, it will be an uphill battle to successfully claim privilege over the material and obtain an injunction restraining its use under the principles in Al Fayed. The principles in Al Fayed do not automatically apply if a privileged document is disclosed by mistake; the wording of the principles clearly indicates that it is the state of mind of the recipient that matters.
In any event, the fact that the disclosing party had not followed the relevant court guide was fatal to its request for an injunction and affected the court's consideration of whether the material was privileged at the outset. Parties must be careful to preserve the independence of their experts by keeping them at arm's length. Practically, this certainly means being careful in communications, especially when reviewing draft reports.
For further information on this topic please contact Chris Ross or Rebecca Baker at RPC by telephone (+44 20 3060 6000) or email ([email protected] or [email protected]). The RPC website can be accessed at www.rpc.co.uk.
Endnotes
(2) TCC Guide, paragraph 13.6.3.
(4) Al Fayed v Commissioner of the Police of the Metropolis [2002] EWCA Civ 780, [16].