In Loreley Financing (Jersey) No 30 Ltd v Credit Suisse Securities (Europe) Ltd  EWHC 1136 (Comm), the Defendants, four members of the Credit Suisse group (together "Credit Suisse"), challenged claims by the Claimant, Loreley, to litigation privilege. Knowles J determined the answer to the key, albeit often academic, question: "[i]s the identity of the persons who are authorised to give instructions to solicitors on behalf of a corporate client in ongoing litigation a matter which is covered by litigation privilege?"
Loreley's claim alleges fraudulent misrepresentation and unlawful means conspiracy in relation to its purchase of US$100m of notes from Credit Suisse as part of a collateralised debt obligation transaction.
Credit Suisse's defence alleges that Loreley's claims are time barred. It relies in this regard on, amongst other things, assertions that Loreley, an SPV with directors provided by a professional services company and no employees, knew, or could with reasonable diligence have known, of certain relevant facts at an early enough point to provide Credit Suisse with a complete defence to Loreley's claims. In particular, Credit Suisse argues that the knowledge of KfW, a German bank which is a creditor of Loreley with security over its assets, including the claim against Credit Suisse, may be capable of being attributed to Loreley.
In a Part 18 Request, Credit Suisse asked whether individuals at KfW were providing instructions to RPC (Loreley's solicitors) in relation to the litigation. Loreley refused to answer, claiming that this information was subject to litigation privilege.
Credit Suisse challenged that claim on the grounds that: (1) litigation privilege and legal advice privilege were mutually exclusive; and (2) while "there may be exceptional cases in which the identity of a client can properly be said to form an integral part of a confidential communication", this was not one.
Knowles J agreed with Loreley's proposition1 that both litigation privilege and legal advice privilege are, in principle, capable of applying to the same communication between lawyer and client, and determined that there were two requirements necessary for a successful claim to privilege in such circumstances: "[f]irst, whether the communication is privileged. Second, whether that privilege will be undermined by the disclosure of identity sought. This answer applies as much where the person communicating does so as a person authorised to give instructions to the lawyer on behalf of the lawyer's client as where that person has a different role."
Whilst he considered that it was, in principle, possible for litigation privilege to apply to the identity of the party giving instructions, Knowles J found that, on the facts, it did not apply; in some cases, "the question of who gives instructions to the lawyer would, it was suggested, trespass into an answer to the question of the content of those instructions" and so litigation privilege would be available for that reason, but that was not so here.
This case provides welcome clarification as to the possible co-existence of legal advice privilege and litigation privilege, although, as Knowles J acknowledged, often this point will be academic "because legal advice privilege will apply to legal advice so that it is not necessary to claim litigation privilege too".
For a discussion of the application of litigation privilege in the context of the instruction of an expert and the circumstances in which privilege will be waived over communications referred to in a witness statement, please see our recent article: No privilege for fishing expeditions: Kyla Shipping v Freight Trading Ltd.