The Court of Appeal judgment in Al Sadeq v Dechert (and others) [2024] EWCA Civ 28 is a must-read for litigators, in-house lawyers and anyone else who may become involved in English litigation, especially following an investigation, for its discussion of legal privilege (as well as for the extraordinary facts alleged).

Privilege is a complex area which can easily be misunderstood. Whilst other commentators on this case have concentrated on the extent to which unlawful or underhand conduct can preclude privilege protection (the “iniquity exception”), just as importantly, the judgment sheds light on the scope of privilege under English law, by whom privilege can be asserted, and the challenges to be overcome in contesting it.

BACKGROUND FACTS

Dechert LLP (Dechert) was engaged by an investment arm of the Ras Al Khaimah government to assist with the investigation of alleged frauds by individuals, including the former chairman of the Ras Al Khaimah Investment Authority (RAKIA), and Mr Al Sadeq (a former legal adviser to RAKIA, and the Claimant in this action). Mr Al Sadeq was interrogated in the course of those investigations, allegedly in a most extreme way. For example, it is said that he was subjected to: kidnap and extraordinary rendition; unlawful detention in solitary confinement for over 18 months; interrogation by Dechert lawyers while detained; and threats by certain of the lawyers against him, his wife, and his children. This gave rise to claims that Dechert and certain of its lawyers (together, the Defendants) were complicit in the use of threats, mistreatment and/or unlawful methods to force him into giving evidence (including false evidence) and causing him emotional, psychological, moral and financial harm, loss and damage.

In the ongoing litigation, Mr Al Sadeq challenged the Defendants’ right to withhold documents based on legal privilege. He contended the Defendants’ legal representatives had taken the wrong approach to the iniquity exception and to other privilege issues when giving disclosure. At first instance, Mr Justice Murray held that the Defendants had taken the correct approach, so Mr Al Sadeq appealed.

COURT OF APPEAL DECISION

Iniquity Exception

Lord Justice Popplewell gave lead judgment and confirmed that the merits threshold for the existence of an iniquity preventing legal privilege from arising is a “balance of probabilities test” (i.e. does it appear more likely than not that the relevant iniquity existed?). The court considered there might be exceptional circumstances to justify adopting a balance of harm analysis (the harm to the Claimant if the application is wrongly refused against the harm to the Defendants if it is wrongly granted)—though it did not identify what those circumstances might be.

In applying the principle, the court held that where iniquity had been shown to exist on the balance of probabilities, there is no privilege in documents brought into existence “as part of or in furtherance of” the iniquity—subject to the prerequisite that the documents were created in circumstances amounting to an abuse of the solicitor–client relationship. “Part of” and “in the furtherance of” are two separate categories, either of which is sufficient. “Part of” includes documents which “report on or reveal the iniquitous conduct in question”, and the exception is not limited to documents created only “in furtherance of” an iniquity.

In this case, since Mr Al Sadeq had managed to show that certain iniquitous conduct had more likely than not occurred and that the Defendants had applied too narrow a test (whether there was a strong prima facie case that the documents were brought into existence for the purposes of furthering an iniquity, which was the wrong test), the disclosure exercise would have to be undertaken again in order to apply the correct test.

Litigation Privilege

The court found: there was sufficient evidence to establish that litigation was in reasonable contemplation; that litigation privilege extends to proceedings where Defendants were not contemplated as parties; but that the legal advice privilege principle—that only those communications which took place with representatives / employees specifically authorised to seek and receive the legal advice attract privilege (the Three Rivers Principle)—does not apply in the context of litigation privilege.

Many points of interest arise from the court’s findings, including:

• The rationale for litigation privilege is to enable a litigant to consult their lawyer in confidence to receive candid advice, and the creation of a safe space to communicate with third parties for the dominant purpose of litigation, to enable the litigant and their lawyer to prepare their case.
• It is the contemplation of the privilege holder (in this case, the Defendants) which determines the date from when litigation was in reasonable contemplation and not the contemplation of a prospective prosecutor or counterparty.
• It is difficult for the court to go behind an assertion of litigation privilege unless it is reasonably certain from the evidence that the assertion is misconceived or incorrect.
• Litigation privilege can attach in relation to proceedings to which the privilege holder is not a party (perhaps one of the most unexplored issues addressed by the judgment). Non-parties ought to benefit from litigation privilege, including: liability insurers; litigation funders; those affected by group litigation; parties behind joint venture companies; and witnesses.
• The privilege continues to exist after the litigation has come to an end, unless and until waived by the privilege holder.
• The Three Rivers Principle has no application to litigation privilege; since legal advice privilege is confined to lawyer-client communications, it is necessary to have a rule as to who qualifies as “the client” where the recipient of advice is an entity, whereas litigation privilege extends to communications with third parties (and all persons / entities that come within the scope of that description).

Legal Advice Privilege

In the context of the Claimant’s contentions that documents created for the dominant purpose of the Defendants’ investigatory work could not attract legal advice privilege (on the basis they constituted investigations of fact involving no legal analysis or advice), the court confirmed:

• Legal advice privilege will apply where lawyers are engaged to conduct an investigation, provided that the investigation is conducted in a legal context and they have been instructed for their legal expertise accordingly.
• When applying legal advice privilege principles, it is crucial to identify who is the lawyer, who is the client and what was the scope of work within the engagement.
• The advice must be legal, not commercial, and the communication must be made in a legal context. Legal advice is widely defined and includes: advice as to what a client should do in the relevant legal context; advice which is given with the benefit of the lawyer’s skill or through the lawyer’s eyes; and the “continuum of communications” between lawyer and client keeping both informed so that advice may be sought and given. The skills of a lawyer brought to an investigatory context extend to taking statements, assembling the facts and handling the evidence.
• Nevertheless, where documents have been produced purely for factual investigative purposes—and not related to any legal purpose—they will not be privileged.
• To assess whether a communication has been made in a legal context, the principles should be applied document by document.
• In this case, Dechert was appointed for its legal expertise, and that extended to advice on the practical aspects of preparing for legal proceedings, what evidence can or should be sought, and bringing their legal skills to the investigatory process to conduct it through a lawyer’s eyes. Ultimately, the court found nothing in the evidence that suggested legal advice privilege had been wrongly asserted.

TAKEAWAYS

The judgment itself is essential (and fascinating) reading. Key takeaways include the following:

• Maintaining privilege (in the face of challenges to it, as in this case) may require clear evidence of when and the circumstances in which privilege was established, and how it has since been maintained and considered, so it may well be worth making contemporaneous records regarding those processes and considerations faced as they arise, so as to form the basis of such evidence should it be required in future. For example, if litigation is in contemplation and communications / documents are being created in connection with a fact-finding investigation, it may be worth recording the fact and timing of the contemplation of litigation itself to assist in the protection of litigation privilege later if necessary.
• Witnesses or other third parties getting involved in or dragged into litigation may wish to seek their own legal advice on the scope and application of litigation privilege to maximise prospects of establishing and maintaining protection.
• Involving external counsel in fact-finding investigations in order to put that investigation into “a legal context” and utilise the lawyers’ legal skills in handling and reporting on the evidence may increase the prospects of maintaining legal advice privilege in documents created in the course of the investigation. 
• External counsel must keep in mind their legal and ethical duties to ensure that third-party investigators comply with all applicable laws and avoid iniquitous conduct.
• Challenging assertions of privilege can be difficult without cogent evidence of errors of principle or their application, since there is only so far that enquiries can be made by the parties or the court without revealing the very matters privilege is designed to protect.
• Debate over the Three Rivers Principle (including whether it was a wrong turn for English law) and its application will rumble on.