The Court of Appeal has upheld a decision that correspondence between solicitors a judge found involved “an element of deception” as to its real purpose was covered by litigation privilege.
Lady Justice Andrews said there was “no good reason” why a party that was otherwise entitled to claim litigation privilege over correspondence with a third party should lose it simply because, 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)”.
This was particularly when, as here, the party was probably entitled to the information in the first place.
The Court of Appeal was hearing an expedited appeal against the decision last month  of Robin Vos, sitting as a deputy High Court judge, in which he said that, while he did not condone the tactics employed by Cardium Law and its client, Ahuja Investments, this did not prevent a finding of privilege.
Ahuja is suing Victorygame Ltd and Surjit Singh Pandher in respect of misrepresentations they are said to have made in the context of a property transaction. The defendants are counterclaiming.
An important issue is what Ahuja’s solicitors at the time, London firm Stradbrooks, knew and what they told Ahuja.
Ahuja had difficulty with extracting information from Stradbrooks for the purposes of the action and, in consultation with counsel, it was decided that the only way the conducting solicitor there would provide it was to threaten to issue negligence proceedings, although there was no intention to actually do it.
Victorygame and Mr Pandher sought disclosure of the correspondence, which Ahuja resisted on the grounds of litigation privilege, saying the dominant purpose of the correspondence was to elicit information to be used in the proceedings against them.
At first instance, Master Pester ordered disclosure. He considered that, in determining the dominant purpose, he should look at not only Ahuja’s intention but also how the correspondence would have been seen by Stradbrooks and its insurer.
But Mr Vos overturned this decision, finding that the “the dominant purpose of Ahuja in bringing the correspondence into existence was to obtain information for use in the current proceedings”.
The fact there was “an element of deception” did not mean the claim to privilege could not succeed, he went on – the case law did not establish such a principle and he was not prepared to find one.
Giving the unanimous ruling of the appeal court , Andrews LJ said she would not characterise what Ahuja did as deception, saying it came “nowhere near the type of reprehensible conduct” in the cases with which the defendants sought to compare it, which involved lies and false assurances.
Though Mr Vos was not prepared to infer that Stradbrooks would have realised that the information would be used for the purposes of the litigation against Victorygame, Andrews LJ found “a strong basis” for doing so.
This was because of the “protracted history of the attempts to get hold of the conveyancing file from them, and the fact that Stradbrooks were still instructed by Ahuja at the time when the letters before action were sent in respect of both defendants (and therefore knew the nature of the case)”.
In any event, there was no evidential basis for concluding that Stradbrooks were misled into believing it was not going to be used for that purpose, “let alone that Ahuja’s intended use of the information would have made a difference to the decision to provide an answer to its solicitor’s request”.
Andrews LJ added: “Even if they were led to believe that Ahuja was contemplating suing Stradbrooks for professional negligence, that would not rule out the use of the information in the underlying litigation.”
There was, she observed, no obligation to tell Stradbrooks what Ahuja intended to do with the information once it was obtained, or why it was wanted.