Be careful what you write…it may come back to haunt you

A recent Court of Appeal ruling may limit businesses' ability to rely on litigation privilege to protect key sensitive documents from disclosure during litigation. Consequently, businesses should ensure that they consider the following two key action points:

1. Ensure that anyone within the business creating any documents related to current or prospective litigation - especially important and sensitive documents - is aware of the concept of litigation privilege and the limits to its application. If you are unsure, contact your solicitor or in-house lawyer.

2. As far as possible, internal discussions within the business concerning current or prospective litigation should take place orally and businesses should limit written communications about the litigation to the following (each of which should still benefit from privilege):

a. correspondence with your solicitors;
b. correspondence with third parties which seeks specifically to obtain information about the litigation; and
c. documents which include specific reference to legal advice which has been received previously.

Further information

In a recent case, the Court of Appeal has clarified the extent to which a business can rely on litigation privilege as a shield against disclosure of key confidential documents. In this briefing note, Jolyon Connell considers the issues arising for businesses from the important decision in WH Holdings & Anr v E20 Stadium LLP [2018] and discusses what businesses should be doing to protect themselves against the risk of unexpected and unwanted disclosure orders.

Pursuant to the Court of Appeal's judgment in WHL, in order for a document to qualify for litigation privilege:

• litigation must be in progress or in contemplation;
• the communications must have been made for the sole or dominant purpose of conducting that litigation;
• the litigation must be adversarial, not investigative or inquisitorial; and
• the communications between parties or their solicitors and third parties must be for the purposes of obtaining information or advice in connection with contemplated or existing litigation.

Unlike many had considered previously, it is not enough for only (a)-(c) to apply. Without (d), litigation privilege will not apply. Some scenarios will remain unaffected by this judgment. In particular, businesses obtaining advice from their solicitors should still be able to rely on legal advice privilege (generally) and litigation privilege (specifically) if the advice is in connection with the litigation. Similarly, businesses or their solicitors should still be able to benefit from litigation privilege if they are discussing issues with third parties with a view to obtaining information for the dominant purpose of the litigation.

However, other key scenarios are very unlikely to benefit from litigation privilege. For example:

(i) the written minutes of a Board of Directors discussing litigation strategy generally or a settlement strategy specifically; and/or
(ii) a business' internal email communications which make reference to the conduct of the litigation, eg considerations around settlement offers;

will almost certainly not be litigation privileged, as they are not prepared "for the purposes of obtaining information or advice" about the litigation. Alarmingly, businesses may therefore now find that these sorts of hugely sensitive documents could be liable to be disclosed to the litigation opponent. Also, while the WHL judgment has not changed this position, it is worth remembering that documents making reference to key litigation issues but which are created for the primary purpose of running the business, rather than conducting the litigation, will not be litigation privileged either. For example, a document which says that that litigation should be settled as soon as possible as it may prejudice the business' ability to fund-raise would not be privileged.

What should businesses do now

Given the myriad of different documents and situations in which issues of litigation privilege may arise and the stringency of the criteria which will seemingly now be imposed by the Court in determining whether it applies, the safest course of action is for businesses to contact their solicitors if they are unsure about any of the issues arising in this note. However, in more general terms, adhering to the two key action points set out above should provide some initial assistance to businesses in asserting that documents should benefit from litigation privilege and thereby help to avoid unwanted disclosure orders.

If you require further information about anything covered in this briefing, please contact Jolyon Connell (+44 (0)20 3375 7205), or your usual contact at the firm on +44 (0)20 3375 7000. You can find further information about our Disputes team here.