A more rigorous approach for claiming legal professional privilege during disclosure?

Written on 7 Dec 2016

In Astex Therapeutics Limited v AstraZeneca AB, Chief Master Marsh made a number of important decisions about parties claiming legal professional privilege (LPP).  Although the judge said the case was exceptional, the same principles may apply in cases where there is a real dispute about the claims to LPP.  Parties in such cases may need to be clearer about the reasons for their claims to LPP during disclosure exercises and be prepared to justify their LPP claims on a document by document basis.

Facts

AstraZeneca claimed LPP in relation to a number of documents, starting with a simple bald assertion that the various categories of documents were “by their nature privileged”.  The judge considered that this was inadequate.  At an earlier hearing, he had ordered AstraZeneca to state the type of LPP claimed and “how it is said to arise“.

The resulting witness statement from the solicitor for AstraZeneca was criticised by Astex’s legal team.  They argued that the witness statement failed in 5 respects to deal properly with claims to LPP.  The main points of general interest were:

  • a reminder of the contrasting tests for legal advice privilege and litigation privilege; and
  • the need to be more specific in the statement to allow the claims to LPP to be assessed.

What did the judge decide?

The judge considered the tests for legal advice privilege and litigation privilege and, broadly, agreed with Astex.  It appeared that AstraZeneca had claimed LPP for communications with employees or former employees during an internal investigation before litigation was reasonably in prospect.  Such communications were not protected by legal advice privilege, because they were not between lawyer and “client”.  Applying the Three Rivers (no. 5) case, for a corporate client, “client” is taken to mean an officer or employee who is authorised to seek legal advice on its behalf.  Nor were those communications protected by litigation privilege, because (a) litigation was not reasonably in prospect and (b) even if it was, there was insufficient evidence that litigation was the dominant purpose of those communications.

The judge ordered AstraZeneca to provide a further witness statement by a proper officer of the company that explained the claims to privilege in more detail.  He ordered that it should include the following:

(a)           “A list of the documents over which privilege is now claimed, taking account of the limited nature of legal advice privilege, and the date when each document was created. In the unlikely event that the description of a document or its date is said to reveal privileged information, in the first instance such a document may be described in general terms or included within a class of similar documents.

(b)           Each employee and ex-employee must be identified and date or dates of interviews specified.

(c)           Each document listed must be marked showing whether legal advice privilege, litigation privilege or both is claimed.

(d)           Further evidence about how the claim to litigation privilege arises and when it is said to arise.

(e)           To the extent that it may be necessary, [AstraZeneca] must confirm that it does not claim privilege in relation to any document created before [a specified date].”

Impact of decision

The impact of this decision on AstraZeneca and its lawyers depends largely on the number of documents involved.  In this case, the volume of documents in question was “not particularly large”.  The judge decided it was not disproportionate in the context of the claim to order further details be provided.

Parties in other cases who find themselves in a similar position will want to avoid having to re-review and re-tag documents over which they have claimed LPP.  The solution is to be clear at the LPP review stage of disclosure exercises about the basis on which LPP is claimed for each document.

However, the judge made it clear that this case was exceptional. He was keen to discourage inappropriate challenges on LPP and included this warning in his judgment:

“I would add that the court must be careful to avoid encouraging applications challenging privilege which are purely tactical and designed to harass the opponent.”

What next?

Unusually, Chief Master Marsh sat with Mr Justice Hildyard for part of a recent application hearing in the RBS rights issue case.  He was present during submissions made about claims to LPP.  His draft judgment in the Astex case had been made available to counsel for both parties.  If there are further developments on LPP from Hildyard J’s judgment, we will include them in an update note.

Practice points and comment

  • In most cases, claims to LPP are relatively straightforward and it will not be reasonable to ask for more detailed justification for claims to LPP. The courts will discourage LPP challenges unless there is firm evidence to justify them.
  • Where it is anticipated that claims to privilege might be challenged, parties will need at an early stage to state clearly the precise basis on which LPP is claimed. Particular care needs to be taken in internal investigations.
    • Where the LPP claimed is legal advice privilege, people who are classified as “the client”, will need to be identified, (and maybe those who are being classified as the lawyers). Where in-house lawyers are involved, this may on occasion mean being clearer about whether the advice is legal or commercial.
    • Where the LPP claimed is litigation privilege:
      • a proper officer of the company (usually a director or head of legal) may need to state when he or she considered that litigation became “reasonably in prospect” and why; and
      • an individual or individuals within the company may need to state, with reasons, that the dominant purpose of a particular communication was the litigation.
    • When conducting the privilege review, each document may need to be tagged with more precise information on the basis for which LPP is claimed.