Protecting communications once litigation is in contemplation

A judicial trend narrowing the interpretation of litigation privilege can be claimed poses challenges for litigants looking to protect sensitive communications regarding the dispute.

Legal professional privilege is an important right that enables a party to withhold documents from disclosure in litigation or regulatory proceedings. There are two types of legal professional privilege: legal advice privilege and litigation privilege.

Litigation privilege applies where a communication is made when litigation is in reasonable contemplation or has been commenced; and for the dominant purpose of obtaining information or advice in connection with, or of conducting or aiding the conduct of, such litigation.

Communications with third parties

The long-held view is that litigation privilege is of most use where communications are made by the party or its lawyer with a third party to obtain information in relation to litigation (something which is not covered by legal advice privilege).

For example, the House of Lords in Three Rivers (No.6) [2004] noted that "it has been held that litigation privilege can extend to communications between a lawyer or the lawyer's client and a third party or to any document brought into existence for the dominant purpose of being used in litigation. The connection between legal advice sought or given and the affording of privilege to the communication has thereby been cut".

A narrower view

In the recent case of HML PM v Canary Riverside, though, Nicol J commented that "For the most part, litigation privilege concerns communications between a lawyer and a client…. There are limited circumstances when the privilege may extend beyond such lawyer/client communications (litigation privilege may, for instance, extend to communications with third parties, where that is for the purpose of obtaining information or advice in connection with existing or contemplated litigation)".

That view could be said to be a slightly narrower interpretation of the litigation privilege, restricting the circumstances in which it covers communications with third parties with a requirement that this must be for the purpose of obtaining information or advice in connection with the litigation.

That in itself may not particularly matter: after all, it was still recognised that communications with third parties can be protected. What is more significant is that this case might be seen as part of a recent trend to narrow the scope of litigation privilege, so that it is not the case that every communication after litigation is in reasonable contemplation is protected from disclosure.

That narrowing was arguably evidence in the 2018 decision of WH Holding v E20 Stadium, in which the Court of Appeal "rejected the submission that litigation privilege covered all documents brought into existence for the purposes of actual or contemplated litigation" and held that it could not apply to purely commercial internal discussions related to settling ongoing litigation. This was despite the Court of Appeal having confirmed in the appeal in SFO v ENRC [2018] that settling litigation fell within the meaning of "conducting" litigation.

What is "advice or information?"

That might throw up narrow distinctions: for example, board members simply discussing an amount to offer the other side might not be able to claim litigation privilege. But if, during those same discussions, one director gave some sort of "advice or information" about the offer (for example "I've heard today that the other side are doing badly financially, so they might accept a lower offer"), would that be enough to cloak the discussion with litigation privilege? In other words, what sort of advice or information would suffice? Further developments in this area might therefore be expected in future.