When legal professional privilege isn't privileged

What was the background?

In a fraud claim by Loreley Financing against Credit Suisse Securities this year, Credit Suisse advanced limitation defences and focussed on two German banks, contending that all decisions made by Loreley were actually being made by the banks - they were pulling the strings.Credit Suisse served a request for further information under CPR 18, requiring Loreley to confirm who had provided instructions in relation to the litigation on Loreley's behalf.  Loreley responded that the information was subject to litigation privilege.Credit Suisse also asked Loreley to produce its solicitors' engagement letter.  Loreley disclosed an engagement letter between itself and its solicitors, which redacted a paragraph headed "Next steps and reporting arrangements".Credit Suisse challenged Loreley's claims to privilege.  The High Court concluded the identities of the individuals who were authorised to give instructions to Loreley's solicitors were not subject to legal professional privilege.  It ordered Loreley to provide the information together with an unredacted copy of the letter of engagement.  Loreley appealed.

What did the court decide?

The Court of Appeal allowed the appeal in part, and ordered disclosure of the unredacted engagement letter, which included details of Loreley's reporting linesThe Court held litigation privilege can - in rare cases - apply to protect the identity of a client and those instructing its lawyers.  The key test is whether disclosure of an individual's identity will “inhibit candid discussion” between the lawyer and the client (or the person communicating on the client's behalf): if so, that identity should be privileged.  In general, there will be no such inhibition.  While the content of communications will be privileged, disclosure of their existence or the identity of the person communicating on the client's behalf will reveal nothing about the content nor will it affect the client's ability to prepare its case.  There may be unusual cases in which identification of the person giving instructions may reveal something about the content of the communication or the litigation strategy being discussed, but that would need to be explained as the basis of a claim for privilege.There is no support in English law for the concept of a zone of privacy around litigation preparations.  Litigation privilege attaches to communications rather than information or facts divorced from communications.  Hence, it is commonplace for the identity of a person giving instructions to a solicitor to be revealed, such as in a witness statement made by a solicitor (in which they are required to set out their source of information and belief) or in a disclosure statement.

What are the key takeaways?

This case raised for the first time whether the identity of a client and those instructing its lawyers are capable of being protected by litigation privilege.  In examining the scope of litigation privilege, the Court emphasised that it protects communications and their contents.  But it will rarely protect the identities of those undertaking such communications.Therefore, if undertaking litigation proceedings, do not assume you have the right to legal professional privilege in respect of your identity, unless you have a very exceptional case.

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