knowledge 14 September 2018 |

The Danger of Waiving Privilege on Connected, Related or Similar Documents

Introduction

The Commercial Court in Quinn v IBRC ¹ has recently confirmed the test laid down in the UK case of Fulham Leisure Holdings Ltd v Nicholson Graham & Jones ² and should strike a note of caution as to how waiving privilege over certain documents can have an impact on other privileged documents, over which privilege has not been waived. The Court’s rationale in holding that a waiver has occurred is  that an unfair litigious advantage could arise if a litigant waives privilege over certain documents but retains privilege over connected, related or similar documents as it would provide an incomplete understanding of the relevant communications to the other side. 

Privilege – absolute protection

Legal professional privilege is a right conferred by law to protect communications containing inter alia legal advice between a solicitor and their client from being disclosed to any other parties. In essence, privileged communications are immune from compulsory disclosure. There are, however, circumstances in which a party may no longer maintain a claim of privilege over a document. A party can lose privilege by waiving their claim to privilege, either expressly or impliedly. Notwithstanding this, the Courts fiercely protect legal professional privilege.

In Quinn the court emphasised the “high degree of protection” afforded to the principle of legal professional privilege ³ and cited Lord CJ Bingham in Paragon Finance v Freshfields ⁴ where he held that “the protection [of legal professional privilege] is absolute unless the client (whose privilege it is) waives it, whether expressly or impliedly”, and the view of Ms Justice Laffoy in Martin v Legal Aid Board ⁵ that, “legal professional privilege is now more than a mere rule of evidence, but an important right that is protected by Articles 6 and 8 of the European Convention on Human Rights.”  That is subject to certain exceptions relating to the sub-class of litigation privilege dealt with in previous case law.⁶

Selective Disclosure

The plaintiffs in Quinn had disclosed a series of privileged documents without any limitation but subsequently sought to maintain a claim of privilege over other potentially connected privileged documents. The court cited recent decisions in this area including the decision of McKechnie J in Hansfield ⁷ in which he held that a party may not make selective disclosure in relation to a group of documents “of a similar nature”, and the Supreme Court decision in Redfern Ltd v O’Mahony ⁸ where Finnegan J stated that if legal advices had been partially disclosed, a court must be satisfied that what had been disclosed represented all of the material “relevant to the issue in question” otherwise such partial disclosure would risk “injustice through its real weight or meaning being misunderstood ”. 

Mr Justice Haughton approved the test laid down in the UK courts in Fulham (the “Fulham test”) to determine whether or not partial disclosure of privileged documents resulted in a wider waiver in respect of documents connected or related to the same “transaction” or issue:

1. The “transaction” or issue in respect of which the disclosure has been made must first be identified. The transaction may be identifiable from the nature of the disclosure made, for example advice given on a single occasion;

2. If it is apparent from that material, or from other available material, that the transactionis wider than that which was immediately apparent, then the whole of the wider transaction must be disclosed; and

3. Following this process, further disclosure must be made if it is necessary to avoid unfairness or misunderstanding of what has been disclosed.

Identifying the “Transaction”

The court concluded that, in the case at hand, it would be unfair to allow the plaintiffs to maintain a claim of privilege over the documents which were connected to or related to the same “transaction” or issue or where they form part of a stream of documents, part only of which has been disclosed. The court held there would be a real risk that the plaintiffs would achieve an unfair litigious advantage by partial disclosure of relevant documents which may give an incomplete understanding of the relevant communications or transactions.

As the Court had not reviewed the privileged material, the Court could not give directions on the definition of a “transaction”. However, in order to identify the “transaction” or issue, the court directed that parties may look to documents that relate to, are connected to, or are similar to material contained in the already disclosed privileged documents. The court further held that in order to determine whether the documents are, as a matter of probability, “closely connected ” to the disclosed documents, or part of a string of documentation, one can have regard to the date, subject matter, sender and recipient of the documents. The Court directed the defendant to identify the documents, over which privilege was claimed by the plaintiffs, which they believed were part of the same “transaction” or issue as the disclosed privileged documents. The plaintiffs were ordered to respond by providing their own list, setting out a detailed description of the subject matter of the documents in question in order to identify whether the contents are related or linked or similar to a specified “transaction” or issue.

Conclusion

The decision of Haughton J makes clear that one party cannot waive privilege over a certain group of documents of a similar nature so as to gain an unfair litigious advantage by creating a misleading or incomplete understanding of the relevant transactions or communications. Furthermore, where there is evidence that certain documents that have not been disclosed are linked to documents over which privilege has been waived, the court may order the party to provide a fuller and better description of such undisclosed documents to establish whether the previous waiver of privilege should also apply to those documents. Extreme caution should therefore be exercised when waiving privilege over documents to ensure that it does not have a knock on effect on documents over which privilege needs to be maintained.