Court of Appeal clarifies the ambit of litigation privilege in Loreley

Loreley Financing v Credit Suisse [2022] EWCA Civ 1484 concerns an appeal against the High Court’s decision that the identity of those instructing the claimant’s lawyers was not subject to privilege (See earlier article ‘Can the identity of those instructing lawyers be protected by litigation privilege?’). The Court of Appeal dismissed the claimant’s appeal, rejecting its argument that the identity of those giving instructions is inherently privileged.

Background

The Claimant was a special purpose vehicle with no employees. The issues in the case included arguments on limitation, and the question of whose knowledge could be credited to the Claimant was important. The Defendant sought numerous orders including one providing that the names of the individuals authorised to instruct the Claimant’s lawyers were not subject to privilege. The Claimant accepted that the question of which individual gave instructions on its behalf to its lawyers might have some relevance to the Defendant’s contention that the claims were time-barred, but asserted litigation privilege against the information sought.

The High Court held that whether the identity of those communicating with a lawyer is subject to litigation privilege depends on whether two requirements are met. First, whether the communication itself is privileged and, second, whether that privilege would be undermined by the disclosure of identity sought. The judge held that the identity was not privileged and the Claimant was ordered to identify all individuals who were or had been authorised to give instructions to its lawyers in relation to the proceedings.

Court of Appeal decision

In its appeal, the Claimant argued that the identity of persons who are authorised to give instructions to lawyers on behalf of a corporate client in the course of ongoing litigation is necessarily covered by litigation privilege and does not depend on whether privilege would be “undermined” by disclosure of the identity. The purpose of litigation privilege is to establish a “zone of privacy” around a party’s preparation for litigation. The identity of those instructing the client’s lawyers is within the scope of litigation privilege because disclosure might provide an advantage to the opposing party.

The Court of Appeal denied the appeal and agreed with the judge’s approach. The court rejected the argument that litigation privilege protects information subject to a “zone of privacy” within which everything which happened was subject to legal privilege. This concept is too broad and there is no support for it in the English authorities.

Rather, “litigation privilege attaches to communications (including secondary evidence of such communications) rather than information or facts divorced from such communications.” Such privilege means that the content of communications is protected from disclosure (as is secondary evidence which tends to reveal the contents of such communications). However, the disclosure of the identity of those authorised to instruct lawyers does not generally reveal such content, nor inhibit candid discussions between lawyer and client.

The Court held that if there are exceptional cases where disclosure of the identity of those authorised to give instructions would tend to reveal information communicated in confidence such as to justify a claim for privilege, the basis of that claim must be explained so the court can evaluate it. The Court described such cases as “unusual” and considered the examples put forward as being “far-fetched” and that they suggested to the Court that the problem does not really exist.

As Lord Justice Males stated:

“in order to determine whether litigation privilege extends to the identity of the 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). If so, the identity of such persons should be privileged. But if not, to extend privilege to the identity of such persons is unnecessary and may deprive the court of relevant evidence needed in order to arrive at a just determination of litigation.”

In this case, the Claimant’s claim to privilege was advanced solely on the ground that the identity of those giving instructions on its behalf is inherently privileged. It was not suggested that the exception would apply, such that disclosure of the individuals’ identity would reveal the content of any advice. On that basis, the appeal was rejected. The Claimant was required to produce an unredacted copy of its engagement letter with is lawyers.

Key takeaway

The Court of Appeal confirmed that the identity of those instructing lawyers on behalf of a corporate client is not generally protected by litigation privilege.

With thanks to Jamie Popplewell for his assistance in preparing this post.