When will a claim to privilege be defeated by underhand conduct?

The Court of Appeal's judgment contains a useful overview of the iniquity exception to legal professional privilege. The iniquity exception does not operate to disapply an existing claim to privilege; rather it prevents a document from attracting privilege in the first place, on the basis that the iniquity deprives the communication of the necessary quality of confidence. It applies in both criminal and civil cases and extends beyond fraudulent or criminal purposes to other underhand conduct; for example, conduct in breach of a duty of good faith, or contrary to public policy or the interests of justice.  It applies equally to defeat a claim to legal advice privilege or litigation privilege. Importantly, it only applies to cases outside the normal scope of professional engagement, where there has been an abuse of the lawyer-client relationship.

A prime facie case of iniquity

Popplewell LJ, giving the unanimous judgment of the Court, held that, save in exceptional cases, the evidential standard that must be satisfied to prove the existence of an iniquity is a balance of probabilities test, and references in the authorities to the need to establish a prima facie case should be equated with a balance of probabilities test.^[1] The existence of the iniquity must be more likely than not on the material available to the decision maker, whether that be the party determining whether to give or withhold disclosure, or the court on any application where the issue arises.

The Court held that this conclusion was anchored in principle. Consideration of whether the iniquity exception applies will usually take place on a provisional basis, without the decision maker being able to assess all relevant evidence that will subsequently be available. As such, it entails balancing competing public policies, which the Court considered to be of equal weight. If an iniquity were treated as having been sufficiently established to require disclosure, the document would be made available, with the risk that privilege would have been wrongly invaded, should it subsequently be held that the iniquity did not take place. Conversely, if an iniquity were not treated as having been sufficiently established, but did in fact exist, the party to whom disclosure ought to have been given would have been prejudiced. That being so, anything other than a balance of probabilities test would be inconsistent with principle.

There is no need for the party seeking to prove the iniquity to establish a "strong prima facie case" (emphasis added). The Court held that Lord Justice Longmore's comments to the contrary in Kuwait Airways Corporation v Iraqi Airways Co (No. 6) [2005] EWCA Civ 28, on which the defendants had explicitly relied in determining whether the iniquity exception applied during the disclosure exercise, were obiter and that the epithet "strong" was an unhelpful gloss that was apt to mislead.

On the facts, the Court held that the Claimant had proven on the balance of probabilities that the relevant iniquitous conduct, namely, his extraordinary rendition, unlawful detention, and the denial of his access to legal representation, had occurred, such that the iniquity exception was engaged.

As part of, or in furtherance of, the iniquity

The Court of Appeal held that where there is a prima facie case of iniquity, there is no privilege in documents brought into existence as part of or in furtherance of the iniquity. These are two distinct categories, either of which is sufficient. "Part of" includes documents which report on, or reveal, the iniquitous conduct.

In determining whether documents fell within the iniquity exception, the Defendants had evaluated whether there was a "strong prima facie case" that the iniquities occurred, and whether the documents in question were created "for the purpose of furthering the iniquity". It followed from the Court of Appeal's conclusions that this test, endorsed by the judge at first instance, had been too narrow. Consequently, the disclosure exercise would need to be redone. However, the Court was clear that whether this would culminate in the production of further documents was a matter of speculation, because the Court simply did not know whether the Defendants had excluded from inspection documents created as part of, or in furtherance of, the iniquities proven by the Claimant.

The Court also emphasised that the abuse of the lawyer/client relationship is a prerequisite to the iniquity exception applying at all and suggested that it may be necessary to assess on a document-by-document basis whether the exception applied. By way of illustration, the Court stated that a document which revealed the unlawful conditions in which the Claimant was detained, may or may not fall within the iniquity exception, depending on the circumstances in which it was obtained. If that information was contained in a document seeking Dechert's advice as to the legality of the detention, the iniquity exception would not apply, such that inspection of the document could be legitimately withheld, because there would not have been an abuse of the lawyer-client relationship. If, conversely, a document evidencing those conditions had been obtained as an incidental consequence of Dechert's general retainer in the investigation, then the iniquity exception would apply, because Dechert would have been an innocent tool in the perpetration of an iniquity by their clients, and the lawyer-client relationship would thereby have been abused.

The Claimant submitted that litigation privilege is not capable of applying in relation to actual or contemplated litigation, to which the person asserting privilege is not, and does not expect to be, a party. The Court of Appeal concluded that this view was not supported by principle, or by a holistic reading of the authorities.

As regards principle, Popplewell LJ outlined a twofold rationale for litigation privilege. First, a client must be able to consult their lawyer in confidence, unburdened by concern that those communications may be disclosed without their consent, and a lawyer must be free to give candid advice on a sound factual basis, without fear that their advice may be relied on by an opposing party in litigation. Second, in an adversarial system each party should be free to prepare their case as fully as possible, without the risk that their opponent will be able to recover material generated by those preparations. This was referred to by the parties as the "safe space" rationale.  

The Court of Appeal held that there was no principled basis, given that rationale, for limiting the scope of litigation privilege in the manner contended for by the Claimant. Indeed, Popplewell LJ observed that doing so would produce unjust anomalies. It would mean, for example, that litigation privilege may not attach to communications with liability insurers, who commonly have conduct of proceedings to which their assured are parties, or, analogously, to communications with litigation funders, who may play a significant part in the conduct of funded claims.

The Claimant's submission was also unsupported by authority. Popplewell LJ held that (a) there is nothing in the leading authorities on litigation privilege, including Waugh v British Railways Board [1980] AC 521, which required the privilege holder to be party to the litigation; and (b) there is direct authority for the principle that litigation privilege can arise where the person contemplating litigation is not an actual or anticipated party. In Guinness Peat v Fitzroy Robinson [1987] 1 WLR 1027, a letter from architects to their liability insurers, sent prior to proceedings being commenced against the architects, was held to be privileged, notwithstanding that the dominant purpose of the architects in making the communication was not advice or use in litigation, and the insurers would not be party to the proceedings then in contemplation. The relevant dominant purpose was held to be that of the insurers, since they had procured the communication, and that was advice or use in contemplated litigation. The fact that the insurers would not be party to the contemplated proceedings did not preclude the document from being privileged.

The Court of Appeal rejected the Claimant's submission that the much maligned Three Rivers (No. 5) principle extends to litigation privilege. This principle provides that only communications between a lawyer and representatives of the client who are tasked with obtaining legal advice (as opposed to any representative of the client) attract privilege. The Court of Appeal held that there was no basis for extending this principle to litigation privilege because, unlike legal advice privilege, litigation privilege extends to communications with "third parties", which would include employees or representatives of a company who were not authorised to seek or receive legal advice on behalf of the client.

It was common ground on appeal that the Court of Appeal was bound by the Supreme Court's decision in Three Rivers (No. 5) to hold that this principle did apply in relation to legal advice privilege, but the Defendants cross-appealed on the point regardless, to preserve their right to seek permission to appeal to the Supreme Court. 

The Court of Appeal also applied the principles summarised in R (Jet2.com) v Civil Aviation Authority [2020] EWCA Civ 35, as to the scope of legal advice privilege. For legal advice privilege to apply to a particular communication, it must be shown that the dominant purpose of the communication was the provision of "legal advice" by a lawyer, but, in that context, legal advice is widely defined. It is not confined to advice on black letter law and its application to particular facts, but also advice on what the client should do in a particular "legal context"; not just to legal advice per se, but to advice given "through a lawyer's eyes".  It applies to the "continuum of communications" between lawyer and client, aimed at keeping both informed so that advice may be sought or given as required.

The Court of Appeal found, contrary to the Claimant's submission, that the advice given by Dechert satisfied this test; it was appointed as a law firm for its legal expertise and gave advice in that context. Of relevance to lawyers engaged in investigations, the Court of Appeal stated that where a lawyer is "taking statements", "assembling the facts and handling the evidence" or engaged in "an exercise in advocacy", that constitutes a "legal context" which will generally cover investigatory work, such as interviewing potential witnesses and presenting evidence to inform and assist legal proceedings, including criminal prosecutions.