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Legal professional privilege in the spotlight
  • May 27, 2024
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In its recent Al Sadeq judgment*, the Court of Appeal clarified the threshold test for applying the iniquity exception to privilege; confirmed that litigation privilege can arise in favour of non-parties to litigation; and clarified how legal advice privilege can apply in investigations. It also rejected the Claimant’s attempt to apply the Three Rivers (No.5) determination of who the “client” is to litigation privilege (as opposed to legal advice privilege). *[2024] EWCA Civ 28

The Claimant, Mr Al Sadeq, had been a senior adviser and executive for the Ras Al Khaimah Investment Authority, the sovereign wealth fund of the Emirate of Ras-Al-Khaimah, UAE (“RAK”). In 2014, the Claimant was accused of fraud, arrested, and taken from his home in Dubai to RAK. After a lengthy detention, he was convicted of fraud in the RAK local courts. The defendant law firm acted for various RAK government entities that had conducted the investigation into transactions and investment activity that led to the Claimant’s conviction. The Claimant subsequently brought English law proceedings against the law firm and three of its former partners alleging that they had been complicit in serious wrongdoings, such as the Claimant’s unlawful arrest, detainment in inhuman conditions and denial of access to legal representation.

The appeal arose from a decision of the High Court in relation to challenges made by the Claimant to the Defendants’ assertion of legal professional privilege over various categories of documents. The Claimant relied on the so-called iniquity exception in challenging privilege claimed over some of these documents. The Claimant also made challenges to the basis for litigation privilege or legal advice privilege in relation to other documents, disputing the privilege on grounds that varied between the document categories in question. The High Court found that the iniquity exception did not apply and that the various documents sought from the Defendant law firm were subject to legal professional privilege. The Court of Appeal allowed the Claimant’s appeal in respect of the test to apply the iniquity principle but rejected its other arguments on privilege.
The Decision

• The iniquity exception
• Litigation privilege for non-parties
• The “client” in litigation privilege
• Legal advice privilege in investigations
• Clyde & Co commentary

The iniquity exception
This exception concerns the circumstances in which crime or fraud will prevent privilege arising. The Court found that the Claimant had established a prima facie case of three categories of iniquitous conduct: unlawful detention, detention in conditions amounting to torture and inhuman or degrading treatment, and denial of access to legal representation.

In reaching this conclusion, the Court of Appeal clarified the test for the iniquity exception as follows:
“The merits threshold for the existence of an iniquity which prevents legal professional privilege arising, whether legal advice privilege or litigation privilege, is a prima facie case, which means that on an assessment of the material available to the decision maker, whether that be the party or its legal adviser conducting disclosure, or the court, it appears more likely than not on a balance of probabilities that such iniquity exists… This is subject to the proviso that there might exist exceptional circumstances which could justify a court taking the view that a balance of harm analysis has a part to play.”

Further, the Court held that the High Court had interpreted the scope of the exception too narrowly. It held that the exception would apply where a document was created as “part of” or in furtherance of an iniquity. It clarified that “part of” includes documents which report on or reveal the iniquitous conduct, including documents brought into existence after the iniquity itself came to an end, on the rationale that the exception must be wide enough for the full details of the iniquity to be revealed. Unhelpfully the Court did not more precisely delineate the category of documents which report on or reveal an iniquity; we suggest it would be logical if this were to be confined to the documents which between them are the first to identify each detail of the relevant matters (rather than subsequent repetition or references back to these primary sources) but the judgment provides no specific assistance on this point. However, the Court emphasised that for the exception to be engaged at all, there must be an abuse of the lawyer/client relationship, such that the conduct would not fall within "the ordinary run of cases".

Consequently, the Court ordered the Defendants to conduct a re-review of their standard disclosure to determine whether any such documents had been improperly withheld, using the correct threshold test.

Litigation privilege for non-parties
One of the Claimant’s challenges to privilege related to documents concerning five pieces of litigation in which the Defendant law firm’s clients were not parties but were instead alleged victims.

The Court of Appeal noted that the case-law relating to litigation privilege enshrined the principle that actual or potential litigants should be able to communicate with their legal advisers, and receive their legal advice, in confidence and without fear that their correspondence may be relied on by their opponents or by others.

When considering litigation privilege in relation to non-parties, the Court of Appeal rejected the Claimant’s submission that litigation privilege should not apply to non-parties as they have no need for a “safe space” to prepare their case.

The Court found that “provided the dominant purpose ingredient is fulfilled, there seems no principled basis for limiting the scope of litigation to that to which the person is a party”. The dominant purpose would require that the maker of the communication had litigation in contemplation, but the litigation need not involve the maker as a party. In the context of the present case, the Court decided that litigation privilege could extend to victims of an alleged crime, where the victim gathered evidence for use in claiming compensation within criminal proceedings in which the victim was not a party. The Court stated that to find otherwise would produce unjust anomalies and to demonstrate the point, it listed examples of other non-parties for which it would be unjust to deny litigation privilege in relation to litigation in which they were not parties but had an interest in its outcome. These examples included liability insurers and litigation funders who have assumed the conduct of proceedings in which the party is the assured (or the funded litigant), members of a class of litigants in group litigation who are not parties to a test case, parties behind a joint venture company which is a litigant. Another example provided was that of a witness, or a person who is the subject of allegations in litigation in which they are not a party, who wishes to obtain legal advice in connection with providing evidence or becoming a party.

The Court did however emphasise that “Cases where the dominant purpose test is satisfied but the party claiming privilege is essentially a stranger to the litigation are likely to be extremely rare; and whether there is an additional requirement of a sufficient interest in the proceedings in all cases is better determined if and when it arises for decision.”

The “client” in litigation privilege
The Court also considered the Claimant’s submission that the Three Rivers (No.5) determination of who the “client” was for the purposes of legal advice privilege, namely the finding that not all communications with representatives of the client attracted legal advice privilege, but only those which took place with employees and representatives who were specifically authorised to seek and receive the advice, applied to litigation privilege also. The Court noted that although this finding in Three Rivers (No.5) had received considerable criticism, it was binding in relation to legal advice privilege on all courts below the Supreme Court.  

As regards its application to litigation privilege however, the Court rejected the Claimant’s submission:
“Its rationale does not, however, apply to litigation privilege. Legal advice privilege is confined to communications which the lawyer has with its client (either directly or through the intermediate agent of either), and does not extend to communications with third parties. It is necessary, therefore, to have a rule for the purposes of legal advice privilege as to which natural persons qualify as 'the client' where the client is an entity with legal personality, such as a company. By contrast, litigation privilege extends to communications with third parties, and all legal and natural persons come within the scope of that description; it encompasses any legal or natural person who is not the client. It would include employees of the client, communication with whom fell outside the scope of legal advice privilege in application of the Three Rivers (No 5) principle because they were not authorised to seek or receive legal advice on behalf of the client.”

Legal advice privilege in investigations
The Court also considered legal advice privilege in the context of investigations. The Claimant argued that a large part of the defendant law firm’s work involved investigation activities that required no legal skills or analysis but were rather the types of activities ordinarily carried out by a non-lawyer, such as a policeman or a public prosecutor, such as interviewing and providing evidence to the prosecution. In considering this submission, the Court relied on a summary of the relevant principles of when legal advice privilege will apply to a particular communication expressed in the case of R( v Civil Aviation Authority [2020] EWCA Civ 35.

The Court rejected the Claimant’s submission, finding that legal advice privilege will apply where lawyers are engaged to conduct an investigation, so long as they are instructed for their legal expertise and the investigation is conducted in a legal context:
“There can be no real doubt that the firm was appointed as a law firm for its legal expertise. Such legal expertise extends not only to advice on black letter law and its application to particular facts, but also to the practical aspects of legal proceedings and preparations therefor, including advice as to what evidence can and should be sought in the legal context of its use in assessing liability and/or bringing proceedings. The skills of a lawyer extend to "taking statements", "assembling the facts and handling the evidence", and "an exercise in advocacy" … That is a legal context which will generally cover investigatory work... the firm was engaged in the investigatory process to bring their lawyers' skills to that process and to conduct it through lawyers' eyes.”

The Court then turned to whether the defendant law firm had applied the test too widely. It was accepted by the defendants that any document created as part of a purely1 investigative role, divorced from their role as lawyers, would not be privileged. Therefore, although the defendant law firm’s approach to applying litigation advice privilege was that they had been instructed as lawyers by their client, and their investigatory work was generally carried out in that context, that did not result in a blanket claim to legal advice privilege for all documents resulting from their investigative work. For example, they had disclosed several communications with the public prosecutor, and it was accepted that communications for the purposes of public relations did not attract legal advice privilege. Consequently, the Court was satisfied, that legal advice privilege had not been wrongly claimed.

Clyde & Co commentary
It is arguable that this judgment has established a less restrictive interpretation of the evidential threshold for when the iniquity exception is potentially engaged, and expanded the scope of the iniquity exception by clarifying one particular aspect of its application. However, it is doubtful as to whether this will lead to the exception appearing in more applications for disclosure. The reality is that the iniquity exception is rarely invoked and when it is, it is rarely successful because a prima facie case of iniquity cannot in practice be made out.

This judgment is a helpful clarification of key elements of legal professional privilege as set out above. However, the assertion that legal advice privilege would not attach to any document created as part of a purely investigative role, divorced from the role of a lawyer, seems unclear without an example of when such a scenario would arise. It maybe that the Court was referring to scenarios where lawyers are engaged in a commercial capacity, however in reality it is likely that lawyers will always assert that they are applying their legal expertise to whatever work they do.  

The notion that litigation privilege may be claimed by a non-party, as privilege belonging to them rather than a litigant, seems novel. In practice, its effect is limited because legal advice privilege is already available to non-parties in such circumstances, and so the question of litigation privilege would only arise where the non-party or their lawyer communicates with third parties for the purposes of obtaining evidence or information. Moreover, the Court made clear that a non-party would need to have “sufficient interest” in the litigation. This was not explored further but rather, as always with privilege, left to a case-by-case determination.

Finally, the Court did not explain whether such privilege could extend beyond witnesses of fact to expert witnesses. However, such an extension seems more problematic and improbable because of the expert’s requirement of independence and duty to the court. The expert’s obligations to the court, including disclosure of information, do not appear readily compatible with any notion that the expert might have a separate personal interest in the litigation that could give rise to a claim for litigation privilege.

Tim Crockford


Andrew Forsyth
Of Counsel