A recent Court of Appeal finding in the UK has provided both Corporate Counsel and external lawyers some additional confidence in seeking to rely on legal professional privilege over documentation created during the course of an investigation either in advance of a civil suit or criminal prosecution – removing any distinction which may have artificially existed to date.
The Appeal related to some startling findings of Mrs Justice Andrews in the decision of Director of the Serious Fraud Office -v- Eurasian Natural Resources Corporation last year which effectively meant that any documentation created during the course of an internal investigation on foot of a whistle blower’s allegation of corruption/fraud (to include all working papers/memorandum of attendances on witnesses/notes made by lawyers both in-house and external) would not enjoy litigation privilege as they had not been created in contemplation of adversarial proceedings.
The Court of Appeal last week overturned this decision and found that all bar two documents could benefit from litigation privilege. In coming to that conclusion it held that “… in the public interest that companies should be prepared to investigate allegations from whistle blowers or investigative journalists, prior to going to a prosecutor such as the SFO, without losing the benefit of legal professional privilege for the work product and consequences of their investigation”. A key aspect of the Court of Appeal overturning the decision of Mrs Justice Andrews was the existence of contemporaneous memos and notes which, in their view, overcame the first hurdle in respect of litigation privilege, namely, the Appellant was aware of circumstances which rendered litigation between itself and the SFO a “real likelihood rather than a mere possibility” (adopting the test in Philip Morris HC ). This highlights the need to ensure that documentation is properly labelled and treated in a manner that will assist in an argument to maintain the lawyer/client privilege.
In relation to legal advice privilege, the Court of Appeal avoided having to determine same by dealing with the majority of the documentation the subject matter of the appeal under the heading of litigation privilege. The Court of Appeal further indicated that it felt bound to follow the earlier decision of Three Rivers¹ which applied a very narrow interpretation of the term ‘client’ in an ‘in-house’ situation. It found that the submissions made by the Appellant (ENRC) and those made by the Law Society of England & Wales were persuasive albeit they ultimately indicated that this would be more appropriately dealt with by the Supreme Court.
The SFO are considering appealing further to the Supreme Court and if they do, this may well give the Supreme Court an opportunity to review the very narrow interpretation of the term ‘client’ for Corporate Counsel.