Identity of those instructing solicitors not protected by litigation privilege

Males: No ‘zone of privacy’ in English law

There is no general rule that the identity of those instructing solicitors on behalf of a corporate client is protected by litigation privilege, the Court of Appeal has ruled.

In the absence of any case law on “the precise issue”, Lord Justice Males said he would “allow the possibility” there may need to an exception in an “unusual case” where identifying the people who gave instructions might reveal something about the content of the communication or the litigation strategy.

The Court of Appeal heard that Credit Suisse, the defendants in the case, wanted to know who gave instructions to the claimant, Loreley Financing (Jersey) No30 Ltd, a special purpose vehicle with no employees whose directors were supplied by a professional services company.

Loreley alleges fraud by the bank in relation to its securitisation of residential mortgage-backed securities and representations it made, following a $100m purchase of notes by Loreley in 2007.

There is a live limitation issue in the case and Credit Suisse said knowing who was giving the instructions may assist in understanding when Loreley became aware of the alleged conduct.

Mr Justice Robin Knowles ruled in favour of Credit Suisse in May, ordering Loreley’s solicitors, City firm RPC, to disclose to the bank an unredacted version of a letter of engagement, which had concealed “the identity of those with whom RPC would communicate”. Loreley appealed.

Loreley argued that the identity of people authorised to give instructions to solicitors on behalf of a corporate client in the course of litigation was “necessarily covered by litigation privilege” and “does not depend on whether privilege would be ‘undermined’ by disclosure of the identity”.

It submitted that the purpose of litigation privilege was to establish a ‘zone of privacy’ around a party’s preparation for litigation.

Giving the unanimous judgment of the court – which included the Master of the Rolls, Sir Geoffrey Vos – Males LJ said he agreed with Credit Suisse that there was “no support in the English authorities or in the principles underpinning litigation privilege” for the concept of a ‘zone of privacy’.

“Rather, litigation privilege attaches to communications (including secondary evidence of such communications) rather than information or facts divorced from such communications.”

The judge said it was “commonplace” for the identity of a person giving instructions to a solicitor to be revealed, for example in a witness statement made by a solicitor in which they are required to set out the source of their information, or in a disclosure statement under CPR 31.10, “without it ever having been thought that this discloses privileged information”.

Males LJ said that to “determine whether litigation privilege extends to the identity of the persons communicating with a solicitor in relation to litigation”, it was necessary to consider whether disclosure “would inhibit candid discussion” between the lawyer and the client, or the person communicating on behalf of the client.

“If so, the identity of such persons should be privileged. But if not, to extend privilege to the identity of such persons is unnecessary and may deprive the court of relevant evidence needed in order to arrive at a just determination of litigation.”

Males LJ said that, “at least in general”, there would be “no such inhibition”. The content of the communications would be privileged, but not “disclosure of the existence of such communications revealing nothing about the content”.

In this case, “disclosure of the identity of those giving instructions would not affect Loreley’s ability to prepare its case as fully as possible and would not enable the bank to recover the material generated by its preparations”.

He dismissed Loreley’s appeal against that part of the ruling of Robin Knowles J which required the company to produce a copy of RPC’s engagement letter with the redactions removed.

However, he set aside a declaration made by the High Court judge which stated that the identities of those authorised to give instructions to RPC were not protected by legal professional privilege, because a declaration “in such general terms” served “little or no purpose”.

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