In July 2018 the Court of Appeal will hear the appeal in SFO v ENRC, a case with major implications for privilege.

In brief

  • Court of Appeal to hear key privilege case arising from SFO investigation.
  • The court may consider the definition of the “client” in the context of companies, as well as when litigation privilege is available in criminal proceedings.
  • The hearing is listed for 03 July 2018.

One case that will be watched with interest by practitioners and clients alike in 2018 is the appeal of the decision of Mrs Justice Andrews in Director of the SFO v Eurasian Natural Resources Corporation Limited, which has been the subject of considerable debate throughout 2017 as a result of its impact on claims to both legal advice and litigation privilege.

Narrow approach to privilege

The high profile judgment endorses the narrow approach to claims to legal advice privilege adopted by the Court of Appeal in Three Rivers District Council v The Governor and Company of the Bank of England (No 5) (and, later, the RBS Rights Issue Litigation case) and also rejects claims to litigation privilege made over a number of documents created by lawyers and forensic accountants in the context of a criminal investigation, at a stage when criminal proceedings (ie charges) had not yet been brought. For a more detailed analysis of the first instance judgment, see our article.

These rulings have created a number of issues in the context of internal investigations, and in particular limit significantly the scope for claims to privilege over records of fact-finding interviews conducted in circumstances where a criminal prosecution or civil claim is not yet ongoing or in reasonable contemplation. For further discussion on key considerations when conducting internal investigation interviews, see our podcast.

The fact that, following this decision, the UK is now further out of step with the approach to privilege in many other jurisdictions also creates particular challenges in the context of cross border litigation and investigations. For further information on those challenges and practical steps which may be taken to address them, see our article.

Law Society intervention

Permission to appeal Mrs Justice Andrews’ judgment was granted on 02 October 2017 and the hearing is listed to be heard over three days, starting on 03 July 2018. The case has attracted significant interest from the Law Society of England and Wales, who confirmed on 10 November 2017 that it will seek to intervene in the appeal. In a statement announcing the move, the Law Society described the ruling as having “profound implications for when and how companies and their employees are protected by privilege” and, if upheld, the potential for the “perverse effect” of discouraging firms from self-reporting suspected criminal wrongdoing.

Key issues the Court of Appeal may be asked to consider include:

(a) the point at which adversarial proceedings, particularly in a criminal context, can be said to be reasonably in prospect in the context of litigation privilege

(b) the definition of the "client" for the purposes of claims to legal advice privilege, and the continued application of the narrow approach introduced by the Court of Appeal in Three Rivers District Council v The Governor and Company of the Bank of England (No 5), and

(c) the circumstances in which legal advice privilege claims may be made over lawyers’ "working papers".

We will monitor these developments closely, and publish further updates as the appeal proceeds.

Crime, fraud & investigations: What to look out for in 2018