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Weighing up the law


Laura White examines legal professional privilege and recent legal turbulence surrounding it


R


ECENTLY IN the UK, the ability to protect confidential communications on the grounds of legal professional privilege has


been in flux, as regulators challenge privilege claims in a bid to uncover those which are artificial or without foundation. The result for some has been an increasing fear of erosion of the right, and concern for the consequences. In the aftermath of an incident or near miss, the ability of an organisation to investigate matters thoroughly – and to seek legal advice on the consequences, without fear that the results will be fully disclosable to regulators or hostile opponents – is of considerable importance. The limits of the legal protection offered by legal professional privilege must be kept in mind however before embarking on any internal investigation. The following are the two main types of privilege: 1. Legal advice privilege, which protects confidential communications (and evidence of those communications) between a lawyer and their client (but not communications with third parties), provided that the communications are for the dominant purpose of seeking and receiving legal advice in a relevant legal context.


2. Litigation privilege, which protects confidential communications (and evidence of those communications) between a lawyer and their client and /or a third party, or between a client and a third party, created for the sole or dominant purpose of obtaining information or advice in connection with the conduct of existing or reasonably contemplated litigation (including avoiding or settling, as well as defending or resisting, that litigation).


14 MAY 2019 www.frmjournal.com


The 2017 decision of the High Court in SFO vs ENRC marked what is generally seen as the high (or perhaps low) watermark in the erosion of privilege in internal investigations, with the court endorsing what was seen by many lawyers as an overly narrow and restrictive approach, particularly as to the requirements for anticipated litigation to trigger litigation privilege. The court decided that an SFO (Serious Fraud Office) investigation was not ‘adversarial’, and that at the time of the documents’ creation an SFO prosecution, which was adversarial, was only a possibility, and not in ‘reasonable contemplation’. It also held that litigation was not the


investigation’s dominant purpose. Instead, other purposes were also identified. Moreover, it held that ENRC’s attempts to persuade the SFO not to commence proceedings were not (unlike defending litigation) a litigation purpose, and as ENRC had intended to share the products of its investigation with the SFO, privilege could not apply. Following the decision of the High Court


there was dismay. Businesses felt at risk over their ability to conduct internal investigations without having to hand over documentation to regulators. Perhaps unsurprisingly, the matter was appealed to the Court of Appeal, whose decision went some way to restoring order and addressing many of the more controversial features of the High Court’s decision. Adopting a much more commercial


approach, the decision of the Court of Appeal is generally seen to return to the approach as was generally understood before the High Court’s judgment. In finding that litigation was reasonably contemplated by ENRC, the Court of Appeal looked at the evidence holistically, observing that the ‘whole sub-text’ of the relationship between ENRC and the SFO


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