Luka Krsljanin succeeds in the Court of Appeal in an important judgment on Privilege
Luka acted for the successful Appellants in a major judgment, handed down today, by which a unanimous Court of Appeal – composed of the Master of the Rolls, Lewison LJ and Asplin LJ – have confirmed that evidence of a corporation’s internal discussions about a potential commercial settlement of a dispute with another party is not protected by litigation privilege. The judgment will have significant ramifications for commercial disputes going forward. The case was also a landmark in that it was the first Court of Appeal case to be live-streamed by the Court.
The judgment in WH Holdings & Anor v E20 Stadium LLP builds on the Court of Appeal’s recent seminal judgment in ENRC v Serious Fraud Office, and provides valuable clarity on a significant issue at the heart of commercial disputes. A central issue in the case was whether litigation privilege attached to evidence of internal discussions held between the Respondent’s Board Members regarding a potential commercial settlement, but which the Respondent accepted did not reflect the contents of any legal advice, and which were not for the purposes of obtaining evidence or advice.
A critical issue before the Court was whether litigation privilege attaches only to communications made for the purposes of obtaining evidence or advice for use in the conduct of litigation, or whether it attaches more generally to communications made for the purposes of the conduct of litigation. The Court of Appeal agreed with the Appellants that the former is the correct approach.
The Court of Appeal also overruled a much earlier judgment which suggested that internal communications between the controlling minds of a corporation would always be privileged.
The judgment provides a further legal milestone in its comments on the Court’s powers to inspect documents claimed to be privileged, in order to determine whether the claim is properly made out. The Court of Appeal held that the first instance judge had wrongly applied a test (derived from a line of High Court judgments) that required the Court to be “reasonably certain” that privilege was wrongly claimed before it could exercise its powers to inspect. The Court of Appeal has held that there is no such ‘hurdle’ to the Court’s exercise of its discretion. The considerations that should be employed by the Court when deciding whether to inspect documents are broad, and include the importance of the documents in question in the dispute.