Case Alert - [2017] EWHC 3700 (Comm)

Court decides there has been a waiver of privilege and discusses relevancy of documents

When the claimant received a letter of complaint from a fund about the assets which it has managed for the fund, it conducted an investigation, and then suspended its CEO. The claimant brought proceedings against the CEO and 3 other people. One of those co-defendants sought specific disclosure of a report created in the course of the internal investigation. Leggatt J rejected an argument that litigation privilege could not be claimed: litigation had been in serious contemplation and had been the dominant purpose of the investigation: "For what it is worth, I would have thought it inherently less likely that a company faced with serious allegations and a serious potential claim against it from one of its clients would be predominantly or even equally concerned with disciplining its own employee as opposed to preparing to defend litigation being threatened against it and to pursue a claim potentially against its employee".

The report had been provided to the CEO and a dispute arose as to whether there had therefore been a waiver of privilege. The judge noted that prior caselaw had found that the mere provision of a privileged document to someone does not necessarily amount to a waiver and it is a question of fact as to whether confidentiality has been lost. It was held that there had been no express or implied restriction on the use of the report and so the CEO had been entitled to deploy the report in these proceedings (and he had done that). As a result, "privilege has been lost as against the other parties to these proceedings for the purposes of these proceedings".

A further issue was whether the co-defendant was entitled to see documents recording a settlement between the claimant and another co-defendant. The judge held that the claimant ought to disclose whether any person was to be paid for giving evidence (other than reimbursement of actual expenses). However, the terms of the payment obligations under the settlement agreement were not relevant because: "an agreement to pay a sum of money actually or contingently, if there is one, does not as a matter of law affect the liability of another defendant".