Litigation Privilege Once Acquired Cannot Be Taken Away
09/22/2021
Ahuja Investments Ltd v Victorygame Ltd [2021] EWHC 1543 (Ch) Can litigation privilege still apply if it was obtained by stealth? This was the question before the Court of Appeal in the recent case of Ahuja Investments Ltd v Victorygame Ltd.
Background
The Claimant, C had sent a Letter of Claim to its former solicitor, S under the Pre-Action Protocol for Professional Negligence. S sent a Letter of Response via its professional indemnity insurers to C. However, C had no intention of bringing a claim against S; although the Letter of Claim gave the misleading impression to S that this was C’s aim. C’s true objective was to bring a claim against the Defendants, D, for misrepresentations made in relation to a property transaction. Furthermore, it knew S would not voluntarily supply the information sought in the Letter of Claim.
D sought disclosure of the two aforementioned letters. C argued that they were both protected by litigation privilege. However, D put forward that litigation or the anticipation of litigation was not the dominant purpose of the communications.
At first instance, the Master concluded that the correspondence was not privileged and ordered disclosure. That decision was overturned on appeal. The Judge stated that C’s dominant purpose regarding the correspondence was to obtain information for use in the proceedings, and the fact that there had been an element of deception in how that information was acquired did not prevent the correspondence from being privileged.
D appealed.
The Court of Appeal’s decision
The Court of Appeal concluded that the documents were in fact privileged. The dominant purpose for obtaining them was for the current litigation. There had been no error of law on the Judge’s part regarding this point. He had properly considered that how the request was made (a Letter of Claim) indicated that the information was required for potential litigation against S.
Consideration was also given as to whether C had lost its right to maintain privilege because of some competing public interest that outweighed it. The Court turned to Lord Scott of Foscote’s statement in Three Rivers DC v Bank of England [2004] UKHL 48, [2005] 1 A.C. 610, [2004] 11 WLUK 298
"…if a communication or document qualifies for legal professional privilege, the privilege is absolute. It cannot be overridden by some supposedly greater public interest. It can be waived by the person, the client, entitled to it and it can be overridden by statute… but it is otherwise absolute. There is no balancing exercise that has to be carried out.”
The reference to waiver was likely to include estoppel1. For estoppel to apply, the conduct of the party claiming privilege must be clear and unequivocal and relied on by the other party to their detriment. In cases involving litigation privilege, a successful argument for estoppel would be rare. Estoppel had not been suggested in this case and even if it was argued it would fail because no one had been deliberately tricked into handing over documents or providing information to which C had not been entitled to at the time. An inference could be drawn that S knew the requested information may be used in litigation against D.
Lady Justice Andrews, in dismissing the appeal, summed up by stating:
“Gathering all these threads together, I can see no good reason why there should be a principle that a party that is otherwise entitled to claim litigation privilege over correspondence with a third party should lose it simply because in order to obtain the information it needed, it was forced by the third party's behaviour to bring pressure on them by threatening litigation against them (even if it did not then intend to carry out the threat) – especially when it was probably entitled to that information in the first place. Moreover, I can find no basis for concluding that the Judge's reasoning was inconsistent with the rationale underlying litigation privilege.”
Comment
Litigation privilege and legal professional privilege are complex but fundamental principles of the English justice system. This case is well worth reading for the fact that it clearly outlines the scope of privilege and how it can be lost or waived. You can read Lady Justice Andrews full judgment here.
References
1A ban on allowing someone from arguing something or asserting a right that contradicts what they previously said or agreed to by law.
