Litigation privilege for non-parties?
In Al Sadeq v Dechert LLP and others [2023] EWHC 795 (KB), the High Court considered (among other things) whether litigation privilege can exist if the entity claiming it was not party to the relevant litigation, and answered it in the affirmative. The decision will be of interest to financial institutions, whose interests may be affected by proceedings, even when they are not directly involved as a party. Note, however, that permission to appeal was granted on 12 July.
Mr Al Sadeq was an executive in the investment authority of the Ras Al Khaimah Emirate (RAK). He left that post in 2012 and alleges that, in 2014, he was unlawfully taken from Dubai to RAK and wrongfully tried and imprisoned.
He sued the defendants (a law firm and various of its ex-partners, who had been retained to investigate corruption allegations at the investment authority), asserting that that they were responsible for the aforesaid alleged mistreatment. In those proceedings, Mr Al Sadeq made an application which took issue with the defendants' approach to privilege in its disclosure exercise.
The defendants sought to withhold certain documents on the basis of their clients’ litigation privilege. The relevant litigation did not, however, directly involve those clients. Instead, they were criminal proceedings taken against others, albeit the defendants’ clients were the victims of the alleged crimes (so they were interested in the outcome).
Did this mean that the claims to litigation privilege had to fail? In the judge’s view; no. Departing from a conclusion in an earlier first instance decision (Minera Las Bambas v Glencore [2018] EWHC 286 (Comm)), the judge (Murray J) held that there was nothing in authority which required such a result, and that support for upholding a claim for litigation privilege in such circumstances could be drawn from the insurance sphere; including the earlier Court of Appeal decision of Guinness Peat: [188]-[206].1
In his view, although it would be rare for a non-party to do so, where it has a sufficient interest in actual or prospective litigation such that it seeks legal advice and, in connection with that advice, communicates with third parties (directly or through its lawyer) to ensure the advice is properly founded then the policy underlying litigation privilege applied [212].
On its face, this conclusion might appear to offer some assistance to financial institutions. It can often be the case that there are ongoing (or upcoming) proceedings, the outcome of which may be of relevance to an institution’s activities. The conclusion seems to suggest that if legal advice is being taken in relation to them, then (provided the other components of litigation privilege are met) third party communications which feed into that process may also be privileged.
This outcome, however, needs to be treated with a degree of care. The judge’s approach read down the degree to which litigation privilege is concerned with the actual conduct of litigation (see e.g. [199]). This might be said to be inconsistent with the scope of the privilege as established by authority and, as a corollary, risks incompatibility with the accepted scope of legal advice privilege. There is also the fact that the point was decided differently in the Las Bambas case (although, in that case, matters may have been complicated by the particular relationship of the parties vis-à-vis the disputed material). It is also possible that the case of Guinness Peat stands as support for a more conventional approach to the problem, involving, in the context of orthodox litigation privilege principles, an examination of the non-party’s factual proximity to the litigation.
Permission to appeal was granted by the Court of Appeal on 12 July 2023.
*The Court of Appeal's judgment has since been handed down in January 2024 - for our newsletter taking a look at that ruling, please click here*
Stephen Lacey (Counsel) and Michael Munk (Managing Associate) in London
