The case of The Financial Reporting Council Ltd v Frasers Group PLC (formerly Sports Direct International Plc) [2020] EWHC (Ch) recently considered whether reports on a company’s approach to business and tax structures were protected by legal professional privilege.
The case arose out of distance selling and avoiding VAT in other EU jurisdictions. A report which also recommended how to re-arrange affairs if litigation was unsuccessful was held not to be privileged.
The judgment re-affirms the principle that to attract privilege the report must have as its sole or dominant purpose litigation, either actual or in contemplation.
Care should be exercised when communicating with experts. It would perhaps be prudent to resist adding to instructions to an expert “how should X do things differently to avoid another similar accident”.
It is clearly a risk where an accident has occurred that a policyholder may want to address the cause of the accident as part of the investigation into the accident itself. Reports with such a dual purpose would be discloseable.
It will not be enough that a document happens to be relevant to later litigation if it is clear that, at the time of its production, the document was commissioned for another reason, for example a proposed Health & Safety re-organisation or analysis of risk in the business.
Arising out of the same investigation by the FRC, in Sports Direct International PLC v The Financial Reporting Council [2020] EWCA Civ 177, the Court of Appeal considered the status of communications between Sports Direct and its advisors.
Lady Justice Rose held that reports were not protected by privilege just because they were attached to emails which were protected by privilege. This echoes established case law[1]. If the email itself is privileged, that does not confer privilege on the pre-existing document because of the authority of Ventouris.
The situation is now clear - sending reports (or other documents) which are not privileged to representatives via privileged communication does not mean those reports become privileged just because they were provided with correspondence which is protected.
Where privilege is claimed over documents which may be heavily redacted (e.g. medical records) it may be that these recent cases allow the point that parts over which privilege is claimed, or attachments over which privilege is claimed, cannot prevent the disclosure of the remainder of the document or attachments..
Consider the position in relation to case managers. A case manager’s duty is to the client. Case manager communications with a solicitor should relate to the provision of services to the client so if it is claimed they are protected by litigation privilege but are in the context of services then the sole purpose is not the litigation. In such circumstances the point can be made that such communications or documents should be disclosed, in full, without redaction. An application to Court may be necessary.
It is worth remembering a case manager’s records are discloseable in litigation in much the same way as GP records and should be without redaction unless it can be shown that the content breaches another subject’s rights under data protection legislation.
This principle will also apply to communications from other service providers such as a local authority or housing association. If they deal with the claimant’s needs outside of litigation they are not privileged.
For more details please contact Roger Hill, Associate.
[1] Ventouris v Mountain [1991] 1 WLR 607 and Imerman v Tchenguiz [2009] EWHC 2902 (QB)
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