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Legal Advice Privilege - Lessons that can be learned from two recent decisions on waiver of privilege

  • United Kingdom
  • Financial services disputes and investigations
  • Litigation and dispute management

20-09-2021

The concept of legal professional privilege is fundamental to litigation and the Court is regularly asked to consider requests to disclose privileged information. The Court’s approach to privilege in different situations can have important implications in a case. The recent decisions in ConocoPhillips Co v Chrysaor E&P Ltd [2021] 3 WLUK 524 and Scipharm Sarl v Moorfields Eye Hospital NHS Foundation Trust [2021] EWHC 2079 (Comm) helps illustrate how privilege may be lost or waived.

ConocoPhillips Co (“ConocoPhillips”) v Chrysaor E&P Ltd (“Chrysaor”)

This decision relates to the rectification of a contract for sale of companies engaged in the North Sea oil industry. Chrysaor purchased subsidiary companies of ConocoPhillips. As part of the sale, the email accounts and documents of the subsidiaries (including communications that were subject to legal privilege) were migrated to Chrysaor’s systems.

ConocoPhillips asserted that these communications were privileged, so despite being in Chrysaor’s possession, they were not reviewed by them. Chrysaor however, applied to the Court shortly before trial, for disclosure of the communications, arguing that privilege could no longer be asserted because confidentiality had been lost.

In his Judgment, Knowles J held that ConocoPhillips’ privilege had not been lost. The Judge found that whilst the broad method of copying over the documents to Chrysaor’s systems held ‘a high risk that confidentiality could be lost’, he had to consider the particular context of this case. The Judge held that access to the communications was by virtue of provisions of the contract between the parties and while these arrangements were broad, they were not so broad as to allow access for any purpose or for the purpose of use in this type of litigation between a buyer and a seller. He therefore held that privilege was maintained.

Notably, the Judge also held that the timing of the application was so late in the proceedings (trial was only 2 months away) that it would not be reasonable or proportionate to order disclosure of the privileged communications.

Scipharm Sarl (“Scipharm”) v Moorfields Eye Hospital NHS Foundation Trust (“Moorfields”)

This decision concerns a breach of contract dispute in relation to a pharmaceutical development agreement. The Defendant (Moorfields) applied for disclosure of documents which they argued were ‘referred to’ in a witness statement of a Mr Beckers, lodged on behalf of the Claimant, Scipharm. They sought disclosure of: (i) a “work-sharing arrangement” expressly referred to in Mr Beckers’ witness statement; and (ii) attendance notes of negotiations between a Ms Beveridge (an employee of the Defendant) and the Claimant’s Solicitors that was accepted by all parties to be subject to litigation privilege. These attendance notes were not expressly referred to in Mr Beckers’ witness statement but were alleged to have been alluded to or referred to by implication.

Under CPR 31.14 a party is entitled to inspect a document that meets the threshold of being ‘mentioned in’ a witness statement as long as there is “sufficient mention” of the document. HHJ Pelling QC found that the reference to a “work-sharing arrangement” sufficiently engaged CPR 31.14 to entitle delivery up of any written documents constituting the work-sharing arrangement (subject to further evidence as to whether the arrangement was, in fact, contained in a document).

In respect of the privileged attendance notes (which were alleged to be alluded to or inferred to exist), despite not being expressly or directly referred to in Mr Beckers’ statement, the Court found that they had been ‘sufficiently mentioned’ in the witness statement to satisfy CPR 31.14. The Court felt it was unreal to suppose, given the passage of time in relation to the events referred to and absent any express explanation in the witness statement itself, that the contents of the witness statement had been recalled by the witness other than by reference to attendance notes (or some similar document). The Judge went on to consider whether privilege had been impliedly waived by the allusion to the attendance notes. He held that it was plain that the witness, Mr Beckers, did not merely refer to the attendance notes in passing (which would not constitute a waiver) but instead had deployed them i.e. he had relied upon the content of them. All that remained therefore was for the Judge to determine whether it would be unfair for the party deploying the privileged material not to reveal the whole of the information which would in turn run the risk of the other party only having a partial and potentially misleading understanding of the material. Given that Mr Beckers’ witness statement contradicted a witness statement apparently signed by Ms Beveridge, which at least by omission said something different, the Judge decided it would be unfair to allow Mr Beckers’ witness statement to stand without disclosure of the material which impliedly underpinned it. Accordingly the Court decided that privilege had been impliedly waived and disclosure of the attendance notes between the Claimant’s solicitors and Ms Beveridge were ordered.

Analysis and Practical Advice

It is important to remember that whilst both decisions are specific to the facts of their cases, they highlight some key points:

  • Always consider legal privilege: It is always important to consider privilege even when a dispute is not contemplated. For example in the ConocoPhillips case the emails and documents were initially shared in a corporate transaction before a dispute had arisen or was even contemplated.
  • Removing legally privileged documents or expressly stating that privilege is not waived: Caution should be applied when deciding the purpose for sharing documents regardless of whether or not a dispute is envisaged. If documents are being shared with a third party it may be necessary to carve out any documents which may be privileged or provide an accompanying statement that privilege is not waived more widely.
  • Implied waiver of confidentiality: The particular context of each case must be examined when determining whether privilege has been waived. Both cases make it clear that confidentiality can be preserved or lost impliedly, as well as expressly. In ConocoPhillips both parties agreed to this and the question was whether in the particular context confidentiality was preserved. In the Scipharm case despite not directly referring to the privileged attendance notes, reliance upon their contents impliedly by the witness was enough to waive confidentiality. However, in ConocoPhillips, it was held that access to the documents for a broader purpose was not sufficient.
  • Reliance on privileged documents in witness statements: Extreme care should be taken before privileged documents are referred to when producing witness statements or statements of case. For example, do not quote the contents or summarise them as you run the risk that their contents will be found to have been deployed/ relied upon and “sufficiently mentioned” for the purposes of CPR 31.14.
  • Make your application promptly: In ConocoPhillips, Knowles J referred to the timing of the request to disclose privileged information, stating that the application he considered was made ‘so late that it is not reasonable within the phrase reasonable and proportionate... to grant the type of relief sought’. Therefore if any party considers they may be entitled to disclosure of privileged material they should act promptly.

 

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