Court of Appeal restores legal professional privilege in ENRC

The Court of Appeal restores legal professional privilege in SFO v ENRC case.

SFO v ENRC – Legal professional privilege restored

The Court of Appeal has reversed the controversial High Court decision of Andrews J in SFO v Eurasian Natural Resources Corporation Limited [2017] EWHC 1017 which caused alarm in the legal profession as it severely restricted the ability to rely on legal professional privilege in relation to documents produced in internal investigations. Whilst the litigation that was contemplated was criminal, rather than civil, the first instance decision threatened to have consequences for internal investigations in both civil and criminal matters. Such was the concern in the profession, the Law Society was given permission to intervene.

The CA approached the case as being chiefly about litigation privilege, as that is how they considered Andrews J had approached it. The CA concluded that the judge was wrong in concluding that a criminal prosecution was not reasonably in prospect when the documents were created and found that the documents were produced for the dominant purpose of resisting or avoiding contemplated criminal proceedings. Virtually all of the documents, save for two emails, were therefore covered by litigation privilege.

The Court found that the judge’s distinction between civil and criminal proceedings was “illusory”. They said that “in both the civil and criminal context, legal advice given so as to head off, avoid or even settle reasonably contemplated proceedings is as much protected by litigation privilege as advice given for the purpose of resisting or defending such contemplated proceedings”.

In relation to legal advice privilege the CA was bound by the decision in Three Rivers No 5; in which the House of Lords had held that legal advice privilege only attaches to communications between client and lawyer and not to communications between an employee of the client company who was not tasked with seeking and receiving advice and its lawyers. The Court of Appeal did, however, indicate that it if it had not been bound by Three Rivers No 5 it would have held that communications between ENRC’s employee who was authorised to communicate with its lawyers on behalf of ENRC for the purpose of obtaining legal advice should attract legal advice privilege. The Court observed that English law is out of step with international common law particularly where multinational companies operate across borders with subsidiaries in numerous common law countries. The question of who is the client for the purpose of legal advice privilege will however need to be determined by the Supreme Court if this case (or another) goes to the Supreme Court.