Litigation Privilege in the Board Room: WH Holding Ltd-v-E20 Stadium LLP  EWCA Civ 2652
Lest you thought the higher courts had exhausted the vexed question of the proper ambit of legal professional privilege for this year at least (see SFO-v-ENRC Ltd  EWCA (Civ) 2006), the Court of Appeal handed down another important judgement on the topic last week.
In WH Holding Ltd-v-E20 Stadium LLP  EWCA Civ 2652, the court decisively rejected an attempt to widen the scope of litigation privilege to cover documents concerned with the settlement or avoidance of litigation but which neither sought advice nor information for the purpose of conducting that litigation and which did not reveal the nature of any such advice or information.
The case arose out of a dispute between West Ham FC and E20, the landlord of the club’s Olympic Stadium home, over the number of seats West Ham are entitled to use in the arena. E20 claimed privilege over a number of e-mails exchanged between E20 board members and between E20 board members and stakeholders, e-mails West Ham wanted disclosed. The High Court upheld E20’s claims.
The Court of Appeal’s starting point was Lord Carswell’s summary of the scope of litigation privilege in Three Rivers DC-v-Governor and Company of the Bank of England (No 6)  UKHL 48, which was once again commended as authoritative: “communications between parties or their solicitors and third parties for the purpose of obtaining information or advice in connection with existing or contemplated litigation are privileged, but only when the following conditions are satisfied: (a) litigation must be in progress or in contemplation; (b) the communications must have been made for the sole or dominant purpose of conducting that litigation; (c) the litigation must be adversarial…”
The court noted, however, that the sole ground upon which privilege was being asserted by E20 was that the e-mails were created, “with the dominant purpose of discussing a commercial settlement of the dispute when litigation with [West Ham] was in contemplation.” The judgement makes clear that such “purely commercial discussions” could not be protected by privilege. The flaw in E20’s argument was to incorrectly interpret sub-paragraph (b) in the Three Rivers judgement above as being an extension to Lord Carswell’s general proposition (that communications must be made for the purpose of obtaining information or advice in connection with litigation) rather than as a restriction on its width.
The court was also clear that the ENRC decision had not extended the scope of documents covered by litigation privilege, as the disputed documents in that case fell within the recognised advice or information categories. Indeed, “the only possible change attributable to the decision in ENRC was the confirmation that the conduct of litigation includes its avoidance or compromise.”
A somewhat bold further submission by E20 that there was in any event privilege for internal communications within a corporate body, based on confidentiality, was given short shrift: “we cannot see any justification for covering all internal corporate communications with a blanket of litigation privilege.”
The judgement is surely a cautionary reminder to organisations of the need to exercise great care if internal documents are being created before or during litigation. Privilege will not generally protect them from disclosure unless they were created, “for the purpose of obtaining information or advice”. The only potential exceptions, recognised by the court in this case, are where a document which contains such advice or information cannot be “disentangled” or where a document would otherwise reveal the nature of such advice.
Of course, a document which cannot be brought within the scope of litigation privilege may still be covered by legal advice privilege.