Litigation privilege under the spotlight in the Court of Appeal

The scope of litigation privilege was recently addressed by the Court of Appeal in WH Holding Limited -v- E20 Stadium LLP [2018] EWHC 2784 (Ch), in a decision which will be of interest to all those involved in the litigation process in this country.

The key question before the Court was “whether litigation privilege extends to documents which are concerned with the settlement or avoidance of litigation where the documents neither seek advice or information for the purpose of conducting litigation nor reveal the nature of such advice or information”.

This question arose in the context of an underlying dispute between West Ham and E20 over the number of seats which West Ham was entitled to use in the Olympic Stadium in London. There were six emails over which the claim to privilege was challenged, being emails which had passed between E20 board members, and between E20 board members and stakeholders.  They were said to have been composed “with the dominant purpose of discussing a commercial proposal for the settlement of the dispute between E20 and West Ham in relation to rights arising under the agreement between the parties providing for West Ham to use the London Stadium for its home football matches (the “Concession Agreement”) at a time when litigation was in reasonable contemplation”.

In allowing the appeal and ordering disclosure of the documents in question, the Court of Appeal helpfully summarised its conclusions at the end of its judgment:

• “Litigation privilege is engaged when litigation is in reasonable contemplation”.
• “Once litigation privilege is engaged it covers communications between parties or their solicitors and third parties for the purpose of obtaining information or advice in connection with the conduct of the litigation, provided it is for the sole or dominant purpose of the conduct of the litigation”.
• “Conducting the litigation includes deciding whether to litigate and also includes whether to settle the dispute giving rise to the litigation”.
• “Documents in which such information or advice cannot be disentangled or which would otherwise reveal such information or advice are covered by the privilege”.
• “There is no separate head of privilege which covers internal communications falling outside the ambit of litigation privilege as described above”.

The Court did not consider that the claim for privilege made in this case fell within the scope of litigation privilege, and emphasised that it did not extend to purely commercial discussions.

This is an important decision which parties should take careful note of.  Care will need to be taken to ensure that disclosable documents are not inadvertently created in the mistaken belief that they are covered by litigation privilege. It should not be assumed that just because litigation is in reasonable contemplation and the dominant purpose test is satisfied, the communications will automatically be protected from disclosure by litigation privilege. The Court of Appeal has made it clear that whether litigation privileged is engaged or not goes beyond this.  It should also not be forgotten that ‘legal advice privilege’ is different to ‘litigation privilege’ and is subject to its own qualifying criteria.

For more information, please contact Liam Tolen.