The Director of the Serious Fraud Office v. Eurasian Natural Resources Corporation Ltd [2017] EWHC 1017

The High Court has given a strict interpretation on the issue of litigation privilege. The SFO started proceedings against Eurasian Natural Resources Corporation (ENRC) under Part 8 of the CPR, challenging ENRC’s claim to privilege in respect of various documents. The documents were created in the context of an anticipated criminal investigation, and during the course of ENRC’s engagement with the SFO in a self-reporting process in relation to allegations of fraud, bribery and corruption in Kazakhstan and Africa (which ENRC has denied).

Litigation privilege

In order for a document to attract litigation privilege, litigation must be in reasonable contemplation. The court ruled that a reasonable anticipation of a criminal investigation did not amount to reasonable anticipation of litigation. The policy that justifies litigation privilege did not extend to enabling a party to protect itself from having to disclose documents to an investigator. Documents that are generated at a time when there is no more than a general apprehension of future litigation cannot be protected by litigation privilege just because an investigation is, or is believed to be, imminent. Prosecution only becomes a real prospect once it is discovered that there is some truth in the accusations or, at the very least, that there is some material to support the allegations of corrupt practices.

The court found that one critical difference between civil proceedings and a criminal prosecution is that there is no inhibition on the commencement of civil proceedings where there is no foundation for them, other than the prospect of sanctions being imposed after the event. Criminal proceedings could only reasonably be in contemplation where the prospective defendant knew enough to appreciate that a prosecutor would realistically be satisfied following investigation that there was sufficient evidence for there to be a good chance of securing conviction. There was no evidence that the company was ever aware that it had any such problem, or of anything more tangible than a fear of criminal prosecution.

The court also considered whether the documents had come into existence for the sole or dominant purpose of conducting litigation. The court found that the dominant purpose of obtaining evidence from employees and ex-employees had not been to use the information for the purposes of constructing a defence, and the solicitors’ role had not extended to giving advice in relation to the conduct of future criminal litigation.

Advice given in connection with the conduct of actual or contemplated litigation may include advice relating to settlement of that litigation once it is in train, and litigation tactics may include bringing them to an end by agreement. However, the judge rejected the notion that, by parity of reasoning, litigation privilege extends to documents created for the purpose of obtaining advice about how to avoid contemplated litigation.

Legal advice privilege

As regards the claim to legal advice privilege over interview notes, the court rejected this claim, on the basis that the individuals with whom solicitors communicated were not authorised by ENRC to obtain legal advice on its behalf, and were therefore not the client for these purposes. The court also rejected ENRC’s case that the interview notes comprised lawyers’ working papers.

This is another example of the court taking a restrictive interpretation of the rules of privilege. The approach taken with respect to criminal investigations when asserting litigation privilege is especially strict. Further, the rationale of the judge’s decision in relation to documents prepared for the purposes of avoiding litigation is arguably difficult to follow, and may be difficult to apply in the future. It is understood that ENRC is appealing this decision.