The claimants sued the defendant bank for losses resulting from the transfer of the claimants’ benefits schemes to an offshore scheme. In its defence, the bank argued that there had been no reliance because the claimants had relied on their own IFAs. The bank also brought Part 20 claims against many of the claimants’ IFAs.

In the course of the litigation, a meeting took place between the lawyers representing the claimants and the IFAs. The bank subsequently sought disclosure of the parties’ communications relating to that meeting. The claimants conceded that the meeting had not been an attempt at settlement, but asserted that the documents were none the less subject to "without prejudice" privilege or litigation privilege and therefore not discloseable.

The court rejected the claimants’ argument that without prejudice privilege applied, confirming that only communications made for the purposes of a genuine attempt to settle a dispute fall into that category of privilege.

The claimants’ communications with the IFAs would therefore only be protected if they satisfied the criteria for litigation privilege. The court felt unable come to a conclusion on this issue without having seen the documents, but it gave some useful guidance on the approach the court will take as regards litigation privilege:

  • Insofar as the documents concerned the formulation of a "battle plan", the expression of views on the strengths and weaknesses of the claim and the bank's defences, and the discussion of tactics, the court considered it highly likely that they were privileged.
  • Documents regarding discussions for the purpose of better advising the claimants about how to proceed with their disclosure applications would also attract litigation privilege.
  • Documents concerning the discussion of case management issues were very unlikely to have any probative value and would therefore fall outside the standard disclosure requirements in any event.

It can often prove useful for codefendants to share information and discuss strategy to facilitate the resolution of a claim. The court’s commentary in this case indicates that the court will be supportive of this process and that, for the most part, privilege will apply to documents generated as a result of such communications. As accountants often find themselves as codefendants to a claim, normally with other professional advisers, this should be welcome news.