Court of Appeal in England and Wales Clarifies Scope of Litigation Privilege

The Court of Appeal recently confirmed in Loreley Financing (Jersey) No 30 Limited v Credit Suisse Securities (Europe) Limited & Ors [2022] EWCA Civ 1484 that litigation privilege will generally not extend to the identity of individuals communicating with a solicitor in relation to litigation. The identity of those individuals would be privileged only in "unusual" cases where that disclosure would "inhibit candid discussion between the lawyer and the client".

The decision serves as a stark reminder to both potential and active litigants not to assume that every facet of their interaction with their legal team will be protected from disclosure by default. Instead, litigants should take a proactive approach to understanding and seeking advice on the scope of any privilege that may apply to interactions with their legal team and which best practices should be implemented at the outset of any potential dispute.

The Court of Appeal also reiterated that, issues of privilege aside, requests under Part 18 of the English Civil Procedure Rules (which permits litigants to request clarification where they consider that the opponent has not given sufficient information about the claim in pleadings) must, as required by the applicable Practice Direction, be "concise and strictly confined to matters which are reasonably necessary and proportionate to enable the first party to prepare his own case and understand the case he has to meet".

The Claimant, a special purpose vehicle with no employees and directors supplied by a professional services company, alleges fraud in the underlying proceedings in relation to its purchase of notes totalling $100 million and advances causes of action including fraudulent misrepresentation and unlawful means conspiracy. 

The Defendants asserted that the Claimant's claims are time barred and that the identity of the individuals instructing lawyers on the Claimant's behalf is relevant to determining that limitation issue. To this end, the Defendants served a Request for Further Information pursuant to Part 18 of the Civil Procedure Rules and requested, among other information, confirmation as to whether individuals at a German bank, which was said to be making decisions on the Claimant's behalf, were instructing the Claimant's solicitors in respect of the litigation (the "RFI"). The Claimant refused to provide that information on the basis that it was privileged.

Following a case management conference, the High Court later ordered the Claimant to disclose any engagement letters relating to the proceedings and to comply with the RFI by identifying all individuals "who were or had been authorised to give instructions" to the Claimant’s solicitors. Those orders were made subject to the Claimant asserting its claims for privilege, albeit any such claim needed to be made with full particulars of all matters relied on. The Claimant relied on this caveat by disclosing a redacted copy of the engagement letter with its solicitors and by refusing to disclose the identities of the individuals giving instructions to its solicitors on the basis that this information was protected from disclosure by litigation privilege.

Mr Justice Robin Knowles concluded on a subsequent application that the identity of a person communicating with a lawyer would only be privileged subject to two conditions being met – namely: (1) whether the communication is privileged; and (2) whether that privilege would be undermined by the disclosure sought. As there was no evidence that the Claimant's case would be undermined by the disclosure sought, Mr Justice Robin Knowles ordered the Claimant to respond to the RFI in respect of the identity of those instructing the Claimant's solicitors and to provide an unredacted copy of the engagement letter.

The Claimant appealed that order. The Court of Appeal handed down its judgment on 10 November 2022 and concluded as follows:

1. It was accepted by the parties that there was no existing authority on the precise issue arising on this appeal, such that the Court of Appeal approached it as a matter of principle.
2. In order to determine whether litigation privilege extends to the identity of persons communicating with a solicitor in relation to litigation, it is necessary to consider whether disclosure of that identity would inhibit candid discussion between the lawyer and the client or the person communicating on behalf of the client.
3. Whilst the content of the communication would be privileged, the disclosure of the existence of such communications or the identity of the person communicating on behalf of the client would not reveal anything about the content of those communications, thereby ensuring privilege over the communications' content remains intact.
4. It would be possible, in an "unusual case", for the identification of the person giving instructions to "reveal something about the content of the communications or the litigation strategy being discussed", which would suggest the identity of that person ought to be privileged, although this "would need to be explained as the basis of a claim for privilege". The Court of Appeal recognised that this explanation would need to be in "sufficiently general terms".
5. There was no support for the Claimant's contention that there is a "zone of privacy" in litigation that would support the argument that the identity of those giving instructions to lawyers in litigation is privileged. Indeed, privilege "attaches to communications … rather than information or facts divorced from such communications".
6. By contrast, and as is well established, the identity of a potential witness contacted by a solicitor in the course and for the purpose of litigation is privileged as this would necessarily tend to reveal advice which the solicitor has given or will given as to litigation strategy.
7. As to the RFI, the Court of Appeal noted that there is a "spectrum of relevance" and that "not everything which is relevant is the subject of a proper request under CPR 18", such that, given the circumstances of this case, the Claimant should not have been ordered to answer the request relating to the list of names given the information already available to the Defendants. The Court of Appeal reached this conclusion "quite apart from the question of privilege".

The decision therefore makes clear that, in the majority of cases, litigation privilege would not extend to the identity of individuals instructing lawyers on behalf of a corporate client. That being said, that information would nevertheless only be disclosable if it was actually relevant to one of the issues in dispute, which may not in fact be applicable in many cases. 

Although the decision of the Court of Appeal was made in the context of litigation, the decision will also be of interest to those undertaking internal or government investigations where litigation privilege may also be asserted.  In certain circumstances (for example, where a law enforcement agency wishes to attack the independence of those giving instructions), the identity of the person giving instructions on behalf of a corporate entity will be of particular interest to a law enforcement agency. If a party considers that the identity of those persons should be privileged (i.e., it might reveal something about the content of the communication or the relevant litigation strategy), that party will need to explain why, but will need to do so in general terms so as not to disclose the privileged information.