On September 5, the English Court of Appeal1 overturned the controversial first instance ruling in Director of the Serious Fraud Office v Eurasian Natural Resources Corporation Limited that severely restricted the scope of legal privilege afforded to documents produced during internal investigations. The Court of Appeal’s decision has been welcomed by lawyers and corporates alike.
As reported in Sidley’s June 1, 2017 Update2, the High Court, at first instance, ruled that several categories of documents prepared for an internal investigation following a whistleblowing report would not attract legal privilege. Those categories included external counsel’s notes of interviews with relevant personnel and documents prepared by external forensic advisors for the purposes of the investigation. In making its findings, the High Court severely restricted the scope of legal privilege afforded to documents produced during internal investigations.
The overarching theme of the Court of Appeal’s ruling was its welcome view that it is “obviously in the public interest that companies should be prepared to investigate allegations from whistle blowers or investigative journalists, prior to going to a prosecutor such as the SFO, without losing the benefit of legal professional privilege for the work product and consequences of their investigation.”
The Court of Appeal helpfully disagreed with the first instance ruling’s overly strict interpretation of litigation privilege under English law. During the case, arguments were also raised that the Court of Appeal should overrule or distinguish the longstanding and highly restrictive definition of “client” adopted in the Three Rivers litigation3 for the purposes of legal advice privilege (the other strand of legal professional privilege under English law). The Court of Appeal declined to do so, considering that the matter should properly be left for the Supreme Court to consider at some later date. However, it made a number of obiter comments that were highly critical of the current state of the law, suggesting once again that the rule in Three Rivers is ripe for reconsideration in any case that reaches the Supreme Court.
At the time of writing, it is unknown whether the Serious Fraud Office (SFO) will seek to appeal the Court of Appeal’s ruling.
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