Three recent judgments dealing with the already tricky concept of privilege have produced an increasingly rocky terrain for those advising corporates on internal investigations to navigate.
Last year saw the first: the judgment of Andrews J in the, now infamous, SFO v ENRC  EWHC 1017 (QB) case . Among other things, Andrews J held that:
- the discussions or communications between employees and company lawyers were not covered by legal advice privilege
- documents generated at a time when there is no more than a general apprehension of future litigation are not covered by litigation privilege just because an investigation is, or is believed to be imminent
- documents created with the specific purpose or intention of showing them to the potential adversary in litigation are not subject to litigation privilege—avoidance of a criminal investigation cannot be equated with the conduct of a defence
- criminal proceedings cannot be started unless and until the prosecutor is satisfied that the Full Code test can be met
- a prosecution only becomes a real prospect once it is discovered that there is some material to support the allegations
The issue arose because ENRC, realising it had a potential issue, conducted internal investigations and engaged with the SFO with a view to self-reporting conduct. The SFO subsequently commenced a criminal investigation and sought disclosure of material produced during the course of the company’s investigation.
Andrews J rejected ENRC’s argument that, in these circumstances, the anticipation of an SFO investigation was enough to make out a claim for litigation privilege. She also held that none of the disputed documents was created for the dominant purpose of deployment in, or obtaining legal advice relating to, the conduct of such anticipated criminal proceedings.
Bilta v RBS case
In the case which followed, late last year (Bilta (UK) Ltd v Royal Bank Of Scotland Plc  EWHC 3635 (Ch)), it had been conceded that the documents (records of internal interviews) in respect of which disclosure was sought by the claimant, had been brought into being when litigation was in contemplation ie after it had been first communicated to the defendant by HMRC that there might be grounds on which HMRC would deny the defendant’s VAT reclaim, worth nearly £90m. The issue was therefore whether this was the dominant purpose behind the creation of the documents. Practitioners breathed a small sigh of relief when Vos LJ (Chancellor of the High Court) held that this is a question of fact in each case and that, although both SFO v ENRC and the instant case involved internal investigations by corporates in the face of scrutiny by government authorities, the communication from HMRC in this case put the investigation on a different footing: it was a ‘watershed moment’. Therefore, there was hope that, Andrews J earlier judgment would be confined to its facts.
Health and Safety Executive v Jukes case
Then, earlier this week, the judgment of the Court of Appeal, Criminal Division in Health and Safety Executive v Jukes  EWCA Crim 176 was published. This judgment serves to reinforce Andrews J’s judgment and suggests that the categories of documents to which privilege will attach may be even narrower. In this case, a statement had been made by the appellant in the aftermath of a fatal workplace incident, as part of an internal investigation led by solicitors instructed by the company. The appellant was appealing his conviction, which had followed the admission of this evidence, in his criminal trial. The Court of Appeal, Criminal Division applied the reasoning of Andrews J in SFO v ENRC to conclude that the witness statement was not privileged:
- no decision to prosecute had been taken and matters were still at the investigatory stage
- there was no evidence from the company or the appellant, that, at the time the investigations were taking place, they had enough knowledge as to what the investigation would unearth, that it could be said that they appreciated that it was realistic to expect the HSE to be satisfied that it had enough material to stand a good chance of securing convictions
Note, the decision in SFO v ENRC is subject to an appeal, due to be heard by the Civil Division of the Court of Appeal in July 2018. However, in light of this recent judgment by the Court of Appeal (Criminal Division) it is difficult to foresee a wholescale departure from the decision of the High Court on this particular issue.
This changeable landscape is only making it more difficult for those advising on issues such as privilege in internal investigations. The continuing uncertainty of what documents and material will or will not be covered and in what circumstances inevitably leads to a reduction in scope and depth of material being created during the course of such investigations. This in turn may mean that investigations, at least in written form, may not be as detailed or comprehensive as they might have been, due to concerns over privilege.
LexisPSL Corporate Crime subscribers can read further guidance on Legal professional privilege in criminal proceedings. LexisPSL Dispute Resolution subscribers can read further guidance on Privilege—legal professional privilege (LPP).
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This blog was co-authored by Sian Cross, Head of Corporate Crime and Gillian Bradbury.