In Al Sadeq v Dechert LLP & Ors [2024] EWCA Civ 28, the Court of Appeal provides landmark clarifications to the scope of the iniquity exception; confirms that non-parties to legal proceedings may claim litigation privilege over documents created for the dominant purpose of such litigation; and – in the context of investigatory work – reiterates the broad scope of legal work capable of privilege protection.
Background
Dechert LLP (the Firm) conducted an investigation into alleged frauds and misappropriation of public assets at the sovereign wealth fund of the Emirate of Ras-Al-Khaimah (RAK), Ras Al Khaimah Investment Authority (RAKIA), which ultimately led to the criminal conviction in RAK of Mr Al Sadeq, former deputy CEO of RAKIA, (the Claimant).
The Claimant brought proceedings before the English courts against the Firm and three of its partners alleging that they had violated his rights during the investigation and were responsible for his ill treatment and/or torture in the UAE.
The Firm withheld various documents from inspection in the litigation on the basis they were protected by legal professional privilege. The Claimant brought a wide-ranging application challenging the Firm's claims to privilege, which was dismissed in its entirety by Murray J at first instance.
The Claimant appealed.
The Court of Appeal decision
The Iniquity Exception
Legal professional privilege protects communications from disclosure/discovery in proceedings. The iniquity exception prevents legal professional privilege from attaching to a communication which has come into existence in furtherance of a fraud, crime or other "iniquity", i.e. a party cannot claim the protection of privilege where the iniquity exception applies.
The Court of Appeal's judgment on the iniquity exception in this case comprised two parts:
- on the applicable evidential standard for the existence of the alleged iniquity; and
- on the applicable legal test for the relationship between a communication and iniquity.
The Firm had conducted its disclosure exercise – and its assessment of whether the iniquity exception applied – on the basis that:
- the threshold test required a strong prima facie case that iniquities existed; and
- the relationship between a communication and the iniquity which had to be established was that the communication brought into existence for the purpose of furthering the iniquity.
Threshold test for the existence of an iniquity
At first instance, Murray J said, obiter, that the appropriate
threshold was "at least a strong prima facie case, if not
a very strong prima facie case". The Court of Appeal
considered this was too high. It held that "[t]he merits
threshold for the existence of an iniquity which prevents legal
professional privilege arising, whether legal advice privilege or
litigation privilege, is a prima facie case, which means that on an
assessment of the material available to the decision maker, whether
that be the party or its legal adviser conducting disclosure, or
the court, it appears more likely than not on a balance of
probabilities that such iniquity exists".
Relationship between a communication and iniquity
Murray J at first instance had concurred with the approach taken by the Firm in regard to the relationship between communication and iniquity. The Court of Appeal considered this had been too narrow. Instead, the Court of Appeal held that "the exception is not limited to documents created in furtherance of the iniquity, nor to those which are part of it if that expression is to be given the narrow meaning of communications iniquitous in themselves and therefore in furtherance of iniquity", but rather "where there is a prima facie case of iniquity which engages the exception, there is no privilege in documents and communications brought into existence as part of or in furtherance of the iniquity".
Can non-parties claim litigation privilege?
The Firm had in its disclosure exercise relied upon the existence of several litigations in finding that litigation privilege applied to certain documents withheld from inspection. The Claimant contended that certain of these litigations (comprising criminal or extradition proceedings) did not qualify for the purposes of litigation privilege because the Firm's clients were alleged victims in, but not parties to, such proceedings.
In essence, Murray J agreed with the approach taken by the Firm. In doing so, he referred to victims of crimes having a "sufficient interest" in the contemplated proceedings to justify claiming litigation privilege. See our earlier article on this decision.
The Court of Appeal rejected the Claimant's arguments, finding that "[p]rovided the dominant purpose test ingredient is fulfilled, there seems no principled basis for limiting the scope of litigation to that to which the person is a party".
However, the Court of Appeal did not endorse a test of "sufficient interest" in the relevant litigation for litigation privilege to apply. The Court viewed instances in which the dominant purpose test is satisfied but the party claiming privilege is a stranger to the litigation were likely to be extremely rare and noted that whether there is an additional requirement of a sufficient interest in the proceedings in all cases would be better determined in such a case, should it arise.
Legal advice privilege and investigations
The Claimant argued that legal advice privilege could not attach to investigatory-type work conducted by the Firm because it was not of a legal nature. The Claimant asserted that a large part of the Firm's work had involved activities involving no legal skills or analysis, but were the type of activities ordinarily carried out by police such as interviewing; searches of premises; and briefing and providing evidence to the public prosecutor.
This was rejected both at first instance and on appeal. The Court of Appeal reiterated the broad approach taken to what constitutes "relevant legal context". The Court held that "legal expertise extends not only to advice on black letter law and its application to particular facts, but also to the practical aspects of legal proceedings and preparations thereof" and that a legal context "will generally cover investigatory work such as interviewing those suspected of crimes, or potential witnesses, and the presentation of evidence to a public prosecutor in a form which assists in relation to a potential prosecution".
Separately, the Firm argued in both the original application and on appeal that the Three Rivers (No 5) principle was wrong. The point was taken in order to preserve it in the event of an appeal to the Supreme Court. This argument was not addressed by the Court of Appeal.
Key takeaways
The judgment is welcome insofar as it reiterates the broad scope of legal advice protected by legal professional privilege. It was relevant in the Court's assessment that the Firm had been appointed as a law firm for its legal expertise and had been engaged in the investigatory process to bring the skills of its lawyers to that process. This will be reassuring to law firms and clients alike that, when an external law firm is engaged, it would seem there are few instances in which work conducted would not be in a "relevant legal context".
The approach of the Firm to its disclosure exercise was closely scrutinised by the Court, as was the detail of the Firm's engagement letter identifying the client and scope of work for the purposes of privilege. This is a timely reminder to record properly the nature of the lawyer/client relationship and to maintain contemporaneous records regarding disclosure processes and decisions in the event evidence on the same should be required in future proceedings.
Unfortunately for those keenly awaiting consideration by the Supreme Court of the Three Rivers (No.5) decision (and the incumbent narrow definition of "client" for purposes of legal advice privilege), there will be no decision in this case - the decision is not being appealed to the Supreme Court.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
