A recent decision of the English Intellectual Property and Enterprise Court in Glaxo Wellcome UK Ltd and ors v Sandoz Ltd and ors serves as a helpful reminder of the principles governing legal advice privilege and the relief that may be available to parties that disclose privileged documents by mistake.
Legal advice privilege
The scope of legal advice privilege in the corporate sphere – in particular, the identity of the client for the purposes of ascertaining whether legal advice privilege will attach to the communication in question – has been subject to extensive debate in recent years. For the time being, the Court of Appeal’s decision in Three Rivers District Council v Governor and Company of the Bank of England (No 5) remains good law, notwithstanding apparent criticism from the Court of Appeal itself in its recent decision in Director of the Serious Fraud Office v Eurasian Natural Resources Corporation Ltd.
In Glaxo, a passing off case concerning a type of inhaler, the Claimants successfully challenged a claim to legal advice privilege in respect of two internal emails sent by an in-house lawyer at one of the Defendant group companies to another employee at that same group company. The emails were sent for the purposes of seeking information to provide to external legal counsel for advice to be provided by that external legal counsel.
Witness evidence served by the Defendants’ external counsel in support of the claim to privilege asserted that: “a request by a legal adviser for information for the purposes of providing legal advice to the client necessarily discloses the substance of the matters on which legal advice is being sought, as does a response by the client providing information sought for that purpose…”, and that “I do not understand why [it is said] that it is relevant to the claim for privilege whether the person to whom the [in-house] lawyer communicated was authorized to receive legal advice, since there is no need for a person to be authorised to receive legal advice in order to be able to respond to a request for information which assists a lawyer in providing legal advice.”
Perhaps unsurprisingly, the Court rejected the Defendants’ claim to privilege. In so doing the Master found, in respect of the respective extracts of the witness evidence set out above, firstly, that they failed to grapple with the issue of who ‘the client’ to whom the legal adviser was providing legal advice in fact was, and secondly, that the witness evidence misstated the law (i.e. insofar as, following ENRC, it is necessary if privilege is to attach that the employee be authorized to seek or obtain the legal advice that is the reason for the communication).
Disclosure of privileged documents by mistake
Also in issue in Glaxo was a document that the Defendants asserted was subject to litigation privilege, but that had been disclosed by mistake. The Parties both relied on the summary of applicable principles provided by the Court of Appeal in Al Fayed v The Commissioner of Police for the Metropolis in relation to the Defendants’ application to prevent the Claimants from using the document, namely: (i) that the document be privileged (this was accepted by the Claimants); (ii) the document was provided for inspection by mistake; and (iii) the mistake either was obvious so that the solicitor reviewing the document accepted that a mistake had been made before using it, or it should have been obvious that a mistake had been made. If all three tests are met, then the Court will have discretion to grant the relief sought (the relief is not automatic).
As to the second limb of the Al Fayed test, the Court had in mind the size of the disclosure exercise (more than 400,000 documents reviewed) and the “near inevitability” that some errors would occur. The Master also considered it relevant that a claim to privilege had been made over another version of the document. The second limb would be satisfied on the facts.
The third limb was more difficult, but would also be satisfied. The document in question appeared on its face to be part of an evidence gathering exercise, therefore likely to be covered by litigation privilege because litigation was either in contemplation or had been commenced; it was quite clearly not a contemporaneous document; and it referred to emails to be attached as “evidence”. Further, the metadata in relation to the document (which the Master remarked should be checked by reasonable solicitors when considering documents) spoke to privilege in clear terms, given its description as a “statement” and the date on which it had been created.
Lastly, the Master considered that it would not be right to allow the mistake to lie uncorrected. In exercising his discretion to order the Claimants to delete copies of the document in question, the Master appears to have taken into consideration the fact that (as at the date of the application) the document had been relied on only to a limited extent, and that the parties were still some way from trial.