Litigation privilege: Open secrets

Tony Bingham recently wrote about the case of Transport for Greater Manchester vs Thales Transport and Security Limited.  A dispute had arisen between Manchester and Thales over the Greater Manchester Tramway extension and it looked as though Thales was going to make a claim. Manchester went to the Technology and Construction Court to enforce a contractual term whereby Thales had to disclose to Manchester internal reports relating to the project. Mr Justice Akenhead ordered some such reports to be disclosed.

However, there has been an interesting postscript to this case. Thales claimed that one particular report by a consultant, and two documents said to evidence Thales’ instructions to that consultant, were privileged from disclosure. It was common ground that if these documents were privileged, the contractual obligation to produce them would not be effective. The judge reconvened the court in order to deal with this particular matter.

The topic of privilege from disclosure has been in the legal headlines recently as a result of the Supreme Court decision in Prudential plc vs Special Commissioner of Income Tax. That case concerned legal advice. The Supreme Court held by a majority that privilege only applied to legal advice given by a lawyer and that legal advice given by accountants was not privileged from disclosure.  

However, the privilege claimed by Thales was not legal advice privilege but what lawyers call litigation privilege. This relates to communications where litigation is pending or is in contemplation. The basis of this rule is that communications made for the purpose of obtaining legal advice relating to, or for the purpose of conducting, that litigation are privileged from disclosure. Mr Justice Akenhead’s judgment contains a useful summary of the court’s practice in this area.

To be privileged from disclosure, litigation has to be the dominant purpose for the document’s creation. If it is one of several reasons of similar importance, the claim for privilege will fail

A firm approach is adopted when a party asserts such privilege. In the leading case of Waugh vs British Railways Board, Lord Edmund-Davies said that the public interest was best served by rigidly confining within narrow limits the cases where material relevant to litigation may be lawfully withheld. Justice was better served by candour than by suppression. In line with these sentiments, the House of Lords held in that case that litigation privilege would only apply where the dominant purpose for which the document had been prepared was to obtain legal advice relating to litigation or in order to conduct litigation. If litigation was only one of several purposes of equal or similar importance, then the claim to privilege would not be successful.

When litigation privilege is claimed for a document, the burden is on the party asserting the claim to satisfy the court that litigation was the sole or dominant purpose for its existence. This is usually done by witness statement (or formerly affidavit) either from that party or its solicitors. The court expects such statements to be specific in showing the purpose for which the documents were created.

Where the court is not satisfied by the witness statement then there are usually four possible routes for it to follow. First, it can simply reject the claim for privilege on the basis that the burden of proof has not been discharged.  Alternatively, it can ask for further witness evidence to be filed. Third, the court can inspect the actual documents to determine what their dominant purpose was. If the judge does this and decides that the claim for privilege is made out, he may then have to adopt what has been called  judicial amnesia and put the contents of the documents out of his mind. Finally the court can order cross-examination of the person who gave the witness statement.

In the Thales case, the judge gave leave for further witness evidence to be filed as he was not satisfied with the original statements. So Thales served a further statement from a member of its legal department. Despite this, the judge said that in his view Thales did not come near establishing that the dominant purpose of the report in question was contemplated litigation. He rejected the claim for privilege. He decided not to look at the report in question as that course was generally adopted where the court was not able to reach a decision on the evidence alone.

Tim Elliott is a barrister and arbitrator at Keating Chambers