Berezovsky v Abramovich – principle of collateral waiver [2011] EWHC 1143 (Comm) www.bailii.org/ew/cases/EWHC/Comm/2011/1143.html

Where privileged material is deployed by a party for the purpose of an interim application in order to advance his case on the merits, it is not just to deny the other party the opportunity to refer to such material at trial. This principle applies to documents protected by legal professional privilege and to those protected by without prejudice privilege.

Boris Berezovsky fled Russia in 2000 and lives in exile in Britain. He claims that after leaving Russia, Roman Abramovich, the owner of Chelsea Football Club, intimidated him into handing over a stake in Sibneft, the Russian oil company, for substantially less than the shares were worth. Mr Abramovich sold Sibneft to Gazprom, the state-owned energy group, for US $13 billion in 2005. Mr Berezovsky also alleges that Mr Abramovich breached an agreement by selling shares in the aluminium group Rusal without telling him. Mr Abramovich denies that Mr Berezovsky ever had an interest in Sibneft or Rusal. His application for summary judgment last year failed and the Court of Appeal rejected his appeal in February 2011.

Arkady “Badri” Patarkatsishvili, a Georgian oligarch who died in 2008, was closely involved in Sibneft and other matters in dispute and was the only witness to certain key oral discussions between the parties of which no written record was made at the time. He was interviewed by Mr Berezovsky’s former solicitors and various transcripts, notes and draft witness statements resulting from these interviews are held by Mr Berezovsky. He relied on part of the records of the Patarkatsishvili interviews in defending the summary judgment application.

Mr Abramovich applied for specific disclosure of the Patarkatsishvili records on the ground that Mr Berezovsky had waived privilege over them by deploying some of them in defence of the summary judgment application. He contended that Mr Berezovsky was obliged to give disclosure of all documents relating to the same subject matter by application of the principle of collateral waiver.

The judge allowed the application. Mr Berezovsky had deliberately chosen to waive privilege over the records of the Patarkatsishvili interviews in order to support his case on the merits of his claim at the summary judgment application. To allow him to withhold disclosure would amount to cherry-picking of the worst kind, giving him the unjust advantage of deploying privileged and possibly selective materials for the purpose of surmounting the summary judgment hurdle but not requiring him to give full disclosure of the underlying materials for the purposes of the trial.  

Comment

The principle of collateral waiver will apply when the privileged evidence is addressed to the merits of the case, as was clearly the case here, but it may not arise where the deployment was solely for a limited issue arising only in the interim application and did not go to the merits of the claim as a whole.

For example, on occasion a party may refer in a witness statement to the effect of legal advice he has been given in connection with an interim application. Has he waived privilege over the advice, and possibly over other related advice? In Tate & Lyle v Government Trading Corp the Court of Appeal was clear that privilege in the advice in question will not have been waived as long as the advice is not quoted or summarised. Goff LJ said:

“Time and time again it must happen in interlocutory applications that it is necessary to refer to certain facts or certain advice, and it may be that it is necessary, at the same time, to refer to the origin of those facts or the origin of that advice. It does not follow that, simply because a person does so, he is waiving privilege in respect of the relevant conversation or documents from which the facts were derived”.

In Derby v Weldon (No 10) a distinction was drawn between, on the one hand, merely referring to the fact that the party has obtained legal advice and stating the effect of that advice and, on the other, disclosing the substance of the legal advice or the extent of the instructions given to the lawyer. Again, whether waiver has occurred will depend on whether the advice is held to have been deployed in evidence.

Returning to the present case, the 12 week trial is due to begin in October 2011. It has been the subject of recent media comment, not because of the special security measures that will be required (no doubt a topic for future media attention), but because the newly-appointed Justice of the Supreme Court, Jonathan Sumption QC, will be appearing for Mr Abramovich (he has not appeared in the various interim hearings to date). The appointment had already provoked adverse reaction because Mr Sumption has not worked his way up the judicial hierarchy but is being leapfrogged in at the highest level straight from the Bar. The news that he will not take his place in the Supreme Court until after the trial has not been well–received. As the legal commentator Joshua Rozenberg put it in the Law Society Gazette, “what would we think of the Russians if their system allowed a litigant to hire a judge?”