Two reports are prepared in the aftermath of a fire: one is privileged and does not have to be disclosed to the other side in the ensuing litigation, the other is not. Why?
Scenarios like this often arise, and the usual reason why one report might not be privileged is that it was not prepared for the dominant purpose of apprehended litigation. The recent decision of the High Court in Artisan Glass Studio Ltd v The Liffey Trust Ltd shows how this can happen.
WHAT IS LITIGATION PRIVILEGE?
If a document is protected by litigation privilege, it does not have to be disclosed to the other side in legal proceedings or to the court.
Litigation privilege applies to:
» confidential communications between a lawyer and a client, or between either of them and a third party;
» where the communication was for the dominant purpose of litigation; and
» at the time the communication was made, the litigation was in being or was reasonably apprehended.
ARTISAN GLASS STUDIOS: WHAT HAPPENED?
» 2 November 2002 – fire at bakery in warehouse building.
» 4 November 2002 – insurer appoints loss adjusters to investigate the loss and also appoints engineers to conduct forensic enquiries.
» 15 November 2002 – engineers produce Report 1.
» 24 February 2003 – solicitors for the occupier of an adjoining premises write to insured indicating an intention to sue.
» 20 March 2003 – engineers produce Report 2.
» 29 July 2008 – High Court proceedings issue.
WAS REPORT 1 PRIVILEGED?
Report 1 was a 2-page record of a meeting between the engineers and the landlord of the building. It set out information gleaned from the landlord about the reliability and character of the insured.
It appeared to the Court that the engineers were retained for two purposes: (i) to assist with the defence of potential third party claims; and (ii) to consider the insurer’s exposure and liability to its own insured.
As there was nothing in Report 1 to show the Court that the dominant purpose of its creation was apprehended litigation by occupiers of other units, the insurer could not claim privilege over the document and it had to be disclosed.
WAS REPORT 2 PRIVILEGED?
Report 2 contained a forensic examination of the available evidence in order to determine the cause of the fire and the place where the fire originated.
The Court was satisfied that at the time Report 2 was created, the insurer’s concern was to establish the cause of the fire so that it would be in a position to meet any claims that might be brought against it. It therefore found that the dominant purpose of Report 2 was apprehended litigation as between the different occupiers of units in the building and it was therefore protected by litigation privilege.
HOW DO YOU PROVE DOMINANT PURPOSE?
The party claiming that a document is protected by litigation privilege must prove that the dominant purpose of its creation was litigation or apprehended litigation.
If a party states that a document was created for the dominant purpose of litigation, this necessarily implies that it was created for other purposes also. The Court will want detail as to what these other purposes were in order to make its own determination as to the dominant purpose. If this information is not put before the Court, the Court will make its determination based on the chronology of events and the contents of the document in question.
» Don’t assume all reports you prepare or commission in the aftermath of a fire, accident or other event will be privileged. » The ‘dominant purpose’ test is interpreted strictly by the Irish courts. For litigation privilege to apply,the dominant purpose of the creation of the document must have been apprehended litigation. It is not enough that one of the purposes was apprehended litigation.
» The party claiming that a document is protected by litigation privilege must prove this.
» If a party asserts that the dominant purpose of the document was apprehended litigation, the Court will need information as to the other purposes to enable it to determine if privilege is being properly claimed.
» Take care when creating dual purpose reports, particularly in the aftermath of a fire, accident or other event. Seek legal advice as to how to minimise the risk that the report may have to be disclosed in legal proceedings.