Limited waiver of privilege

Confidentiality is an essential element of privilege. If a party chooses to share a document with another party, confidentiality — and therefore privilege — will be lost as against that party. However, confidentiality is not lost as against the rest of the world and so privilege in that document can be asserted as against the rest of the world.

In Property Alliance Group v. Royal Bank of Scotland [2015] EWHC 1557 (Ch), Mr Justice Birss (as he then was) confirmed that waiver of privilege can be made for a limited purpose and that this would prevent the person to whom the document was disclosed from using it in some circumstances if they were outside the limited purpose for which privilege was waived. In that particular case, the documents in question had been provided to various regulators on the basis that confidentiality and privilege would be preserved as against third parties. The agreements with the regulators contained "carve outs" which permitted the regulators to share the documents with other third parties (such as other governmental or regulatory agencies) and/or to make the material public or to disclose it further. Birss J found that those carve outs did not amount to a general waiver of privilege and stated that: "The fact that the carve outs recognize the regulator's rights and obligations to take a step, which might go so far as even publishing the information in the document, makes no difference if that has not happened. Until they do, I fail to see why the confidentiality and privilege would not be preserved."

The recent case of State of Qatar v. Banque Havilland SA [2021] EWHC 2172 (Comm) confirmed the English court's view that where a document has been provided to a limited number of people, it will generally take a good deal of persuading that privilege has been waived more broadly, as against the rest of the world.

In practice, if it is necessary to share a privileged document with a third party, it is advisable, before handing over the document, to: (i) state expressly in a communication to the third party that the document is being provided in confidence and without prejudice to legal professional privilege; (ii) specify the purpose for which the document is being provided; and (iii) ask the third party to acknowledge this in writing and to undertake not to disclose the documents to any other person.

Inadvertent disclosure

A party who is entitled to claim legal professional privilege is not obliged to do so: that party can, if it chooses, waive privilege and allow inspection. As such, it cannot be assumed that the production for inspection of a privileged document must have been inadvertent. Where a party has allowed another party to inspect a privileged document by mistake, privilege may be lost as against that party. However, the court has jurisdiction to intervene to prevent the use of the document. That said, where privileged material is leaked or inadvertently disclosed to a prosecuting authority, the public interest in investigating and prosecuting the crime may override the privilege holder's right to restrain the use of the privileged material (ENRC v. Decherts LLP & ors [2022] EWHC 1138 (Comm)).

While the court will ultimately decide each case on its own particular facts, the court is likely to grant an injunction if the making of the privileged document available for inspection was an obvious mistake and there are no other circumstances which would make it unjust or inequitable to grant relief. A mistake is likely to be held by the court to be obvious where the lawyer appreciates that a mistake has been made before making some use of the documents or that it would be obvious to a reasonable lawyer in their position that a mistake had been made. Furthermore, English solicitors' professional rules require them to be alive to mistaken disclosure and in circumstances where they are (or should be) on notice that the disclosure was a mistake, they must bring this to the attention of the other side for their confirmation.

Where inspection has been procured by fraud, it is very likely that the court will grant an injunction.

Common interest privilege

A party does not waive privilege where it discloses documents to a third party with whom it shares a common interest in the subject matter of the privileged document or the litigation to which the document relates. It is uncertain precisely which situations are covered by this form of privilege but the relationships in which a common interest has been found to exist to date include: companies in the same group; insured and insurer; reinsured and reinsurer; agent and principal; company and shareholder; co-defendants; and parties using the same solicitor. It is always best practice to use a common interest privilege agreement to record this relationship and its agreed terms.

Use of privileged materials in court

There are circumstances in which privilege will be held to have been waived as a result of a reference to privileged materials in pleadings or a witness statement, even if the reference in question is only to the effect, rather than the content, of the advice (see e.g., PCP Capital Partners LLP and another v. Barclays Bank Plc [2020] EWHC 1393). Depending on the context, even a reference to those materials, e.g., to demonstrate that a witness was acting with the benefit of unspecified legal advice, can lead to a waiver of privilege. Current case law has adopted a distinction between a "mere reference" to and "reliance" on the privileged item, this is very fact-specific. The latter will likely constitute waiver (Kyla Shipping Ltd v. Freight Trading Ltd [2022] EWHC 376 (Comm)). An earlier Court of Appeal case (Raiffeisen Bank International v. Asia Coal & Ashurst [2020] EWCA Civ 11) held that waiver would occur where the reference "puts in issue the content" of the privileged material. A statement simply referring to it will not automatically and without more give rise to a loss of confidentiality and therefore a loss of privilege.

So, while references to information in a document in open court will not necessarily expose the document itself to the public sufficiently that the confidentiality in it is lost (SL v. Tesco [2019] EWHC 3315 (Ch)), caution should be exercised when referring to legal advice or its effects in witness statements and other court communications.

Compulsion of law

Legal professional privilege is considered a fundamental right and can, generally speaking, be asserted in answer to any demand for documents by a public or other authority. However, as discussed above, parties can agree to provide privileged documents on a limited basis.