UK: Privilege Renewed: SFO v ENRC In The Court Of Appeal

The important decision of the Court of Appeal in Director of the Serious Fraud Office v Eurasian Natural Resources Corporation [2018] EWCA Civ.2006 (report here) has moved the law of legal professional privilege (LPP) in a more realistic and commercial direction. It is very much to be welcomed.

The law of privilege

Of course, the law of privilege will never be entirely straightforward. There is a basic tension between the wish of authorities and opponents in litigation to have access to useful information and the right of a client to confidentiality when dealing with their lawyer. There will always be unusual cases around the margins but setting out the principles is a vital task of the higher courts.

LPP takes two forms. The first is 'legal advice privilege', which applies to communications between clients and their lawyers in connection with the giving of legal advice. However, the present law is that legal advice privilege does not apply to communications between a client (or the client's lawyer) and third parties. 

The second form of LPP is 'litigation privilege'. It does apply to communications with third parties – but only if litigation is reasonably in prospect. To be protected, the dominant purpose of the communications must be dealing with this litigation.

Background facts

In the ENRC case the Serious Fraud Office (SFO) was investigating alleged bribery. It sought disclosure of certain documents and argued for a significant curtailment of LPP in relation to, in particular, litigation privilege.

The most important documents that the SFO sought disclosure of were notes of interviews between the company's lawyers and employees, and materials generated as part of a 'books and records' review by forensic accountants. 

First instance decision

The judge at first instance, Geraldine Andrews J, agreed with the SFO. She made two key findings. First, in relation to legal advice privilege, since the 2003 decision in Three Rivers No. 5 the law was that employees of a company who were not empowered to instruct lawyers and receive their advice were not the lawyers' clients but mere 'third parties'. Thus, discussions with the company's employees to ascertain the facts about a particular work event were not protected. Although many people felt, and still feel, that Three Rivers No.5 was wrongly decided, it was nevertheless binding on Andrews J and her decision on that ground was not surprising. 

Second, the Judge also found that litigation privilege did not apply either. She found that litigation was not reasonably in prospect when the interviews took place and forensic work was done. The SFO had commenced an investigation, but that was not the same as a criminal prosecution. A criminal prosecution could only be reasonably contemplated once the potential defendant had sufficient knowledge of the facts to be able to say that the prosecutor would be satisfied that there was a good chance of obtaining a conviction, which was not demonstrated here. This ruling was new law and highly controversial. 

The Judge also found that the 'dominant purpose' requirement was not satisfied. Again quite controversially, she held that avoiding litigation is not a good reason to invoke litigation privilege; and in this case it was clear that ENRC wanted to avoid litigation. It was also relevant that, in her view, ENRC had always intended to show the documents to the SFO as part of promised cooperation and, therefore, that LPP could not apply. 

Court of Appeal decision

A very senior Court of Appeal (the President of the Queen's Bench Division, the Chancellor of the High Court and Lord Justice McCombe) was convened to consider the appeal, in which the Law Society also intervened and made submissions. 

The Court of Appeal was critical of the Judge's approach to litigation privilege and the more controversial propositions on which important parts of her decision were based. 

Litigation privilege

It was relevant that prior to the creation of the documents ENRC was aware of whistleblower allegations, was told and appeared to accept that an SFO investigation was to be expected and had hired external lawyers and forensic accountants to investigate. The overall context was that criminal prosecution was possible. On the facts, the Court of Appeal found that prosecution (that is, litigation for these purposes) was in contemplation at the material times and that the documents were created for the dominant purpose of litigation. The Judge had been wrong to find that relevant materials had been promised to the SFO by ENRC – the evidence showed that ENRC had never expressly agreed to disclosure. 

The Court also made some very valuable statements of principle. Among the most important are:

  • It is a question of fact in each case as to whether the defendant is "aware of circumstances which rendered litigation between itself and the [prosecutor] a real likelihood rather than a mere possibility". (This is a re-statement of the principle in the well-known USA v Philip Morris case of 2003.)
  • There should be no distinction between contemplation of civil or criminal proceedings when considering litigation privilege: "It would be wrong for it to be thought that, in a criminal context, a potential defendant is likely to be denied the benefit of litigation privilege when he asks his solicitor to investigate the circumstance of any alleged offence."
  • In criminal investigation cases, litigation might reasonably be contemplated prior to any contact with the police or government. Evidence that might demonstrate that such contemplation is reasonable, such as statements and actions of company executives or advice of external lawyers, cannot be ignored in determining this issue. Once the authorities are in contact and talking about possible prosecution the position is stronger again.
  • The fact that the underlying facts are initially unclear to a client (such as a company) does not in itself prevent litigation from reasonably being in contemplation.
  • Heading off, avoiding or settling proceedings is a proper purpose within the scope of litigation privilege, just as advice given for the purpose of resisting or defending such contemplated proceedings is within the scope. The Judge's distinction between the two was wrong.
  • In general, the court must take a realistic and commercial view of the facts when it comes to establishing dominant purpose. In another important statement of public policy, the Court held that it is "obviously in the public interest" that companies should not lose the benefit of LPP when investigating allegations of wrongdoing before going to a prosecutor. 

Legal advice privilege

The Court of Appeal's view was that this case was primarily about litigation privilege. It appears to have accepted that the 2003 decision of the Court of Appeal in Three Rivers No. 5 (about most employees not being the 'client' as in relation to legal advice) tied its hands for this limb. 

However, quite unusually, the Court of Appeal made it very clear that it disagreed with Three Rivers No.5. The Court of Appeal does not overrule its own past judgments, that being the function of the Supreme Court. However, the Court of Appeal said that, if it were open to it to do so, it would have accepted the arguments that the Three Rivers view of the nature of clients was outdated, based on 19th-century authorities, which obviously did not take the modern corporate context into account. It said that the Three Rivers position disadvantaged large companies, which was not a principled outcome. It also noted that Three Rivers (No 5) is out of step with much of the common law world (and has been specifically rejected in at least two other jurisdictions as being unprincipled and/or impracticable). 


This is an important 'win' for supporters of a commercial approach to LPP. The slaying of some of the more startling propositions of the first instance judgment in relation to litigation privilege is especially significant. Of course, cases always turn on individual facts, but the reality is that investigations and other work preparatory to potential criminal prosecutions can now take place with far greater confidence that LPP will be protected. 

On legal advice privilege, the signs are also encouraging. It was too much to hope that the Court of Appeal would just throw out the Three Rivers No. 5 judgment, but its very direct and principled criticism of that authority is an unexpected bonus for the many practitioners and academics who have been saying similar things over the years. At some point, whether in an appeal of this case or in another, the Supreme Court will have to grapple with legal advice privilege and the 'client issue'. 

As members of this firm have often argued, an over-restrictive LPP regime actually harms the long-term interests of good governance and legality in commerce, as well as the rule of law. It is heartening that the Court of Appeal has recognised this and moved the law in the right direction. 

Note: Reed Smith represented its client The Law Society of England and Wales as an intervener in the Court of Appeal proceedings.

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions