Litigation Privilege – A Turn for the Worse

Just when some dispute resolution lawyers or their clients in Hong Kong thought that it might be safe to visit England, the English Court of Appeal handed down its judgment in WH Holding Ltd & Anor v E20 Stadium LLP [2018] EWCA Civ 2652.

The judgment (handed down towards the end of last year) comes on the back of a well-received appeal judgment in SFO v ENRC Ltd in September 2018, which restored the general principles that underpin litigation privilege (Industry Insights, October and November 2018). Those principles ought to be uncontroversial and, given their common law heritage, are of significant relevance in Hong Kong.

It is against this background that the English Court of Appeal's judgment in WH Holding will be viewed by many. In short, the Court of Appeal (disagreeing with the lower court) found that certain emails between board members and stakeholders of the defendant company, considering a commercial settlement of the dispute at a time when litigation was contemplated, were not protected by litigation privilege. While it appears that the emails were created for the dominant purpose of conducting litigation in a general sense (in particular, settlement), the court considered that they did not attract litigation privilege because the emails were not created for the purpose of "obtaining information or advice" in connection with the conduct of the litigation.

While claims to privilege (on a document by document basis) turn on their facts, it is difficult to follow some of the court's reasoning given that it seems likely that the emails were sent in order to consider settlement proposals with respect to the dispute.

At the time of writing, it does not appear that WH Holding will be appealed. However, the entire ambit of legal professional privilege (litigation privilege and legal advice privilege) is long overdue clarification by the UK Supreme Court. In the meantime, parties involved with disputes might do well to proceed with care. For example:

  • the sooner legal advisers are involved the better. "Legal advice" is widely construed and once lawyers are instructed legal advice privilege should apply;
     
  • all corporate clients should be careful of how they instruct their lawyers and disseminate legal advice. In England, this is because of the narrow meaning of "client" in a corporate context for the purposes of determining privilege. In Hong Kong, it makes sense to disseminate legal advice carefully for basic risk management reasons and in order to protect confidentiality;
     
  • if a document contains privileged content that cannot be disentangled from the relevant non-privileged content, the default position should be to claim the privilege. If a document contains privileged content that can sensibly be redacted from the relevant non-privileged content, the default position should be to redact the privileged part(s);
     
  • as a general rule, do not create a document if you do not need to.

In WH Holding, the Court of Appeal was concerned that litigation privilege is an inroad into the principle that the courts should be able to determine disputes with the aid of all relevant information. When the UK Privy Council in B & Ors v Auckland District Law Society & Anor [2003] UKPC 38 and the House of Lords in R v Derby Magistrates' Court, Ex p B [1995] UKHL 18 made strong statements that legal professional privilege was not subject to any competing policy they were referring to legal professional privilege generally and not only to legal advice privilege (irrespective of the facts of those cases).

Jurisdictions: 

Senior Consultant, RPC