Court of Appeal clarifies ambit of litigation privilege

10/11/22

Is the identity of the persons who are authorised to give instructions to solicitors on behalf of a corporate client, in connection with ongoing litigation, subject to litigation privilege?

It depends, is the answer given by the Court of Appeal in a judgment handed down today.

This issue arose in the Loreley 30 v Credit Suisse litigation. Loreley is bringing a claim for $100 million against Credit Suisse in respect of a sale of a CDO linked to mortgage-backed securities. Credit Suisse is running a limitation defence. One strand of that defence involves asking whether the knowledge of Loreley’s creditor (a German bank, KfW) is attributable to Loreley for limitation purposes. In support of its argument on attribution, Credit Suisse wanted to find out whether KfW is authorised to give instructions to Loreley’s solicitors in relation to the litigation. This was resisted by Loreley, including on the basis of privilege.

The Court of Appeal (The Master of the Rolls, Nicola Davies LJ and Males LJ) held that it is necessary to consider whether disclosure of the identity of the persons communicating with solicitors “would inhibit candid discussion between the lawyer and the client (or the person communicating on behalf of the client)”: if so, the identity of such persons would be privileged, but not otherwise. The Court held that, at least in general, there would no such inhibition but allowed for the possibility that there might be in certain cases.

Credit Suisse had sought (i) a declaration that the identity of those authorised to give instructions were not privileged, (ii) provision of the relevant identities by way of a CPR Part 18 response and (iii) removal of the redaction of part of the engagement letter showing the relevant identities.

The Court of Appeal accepted Loreley 30’s argument that Credit Suisse was not entitled to the declaration or provision of information via the CPR Part 18 route. The Court gave guidance, which will be of general interest to practitioners, as to the proper limits of CPR Part 18 requests for further information. The Court held that: “Not everything which is relevant is the subject of a proper request under CPR 18” and discouraged disproportionate and unnecessary requests driven by a “scorched earth policy to the conduct of proceedings”. The Court of Appeal accordingly allowed the appeal in respect of the declaration and CPR Part 18 request, and upheld the decision of the judge below in respect of the redaction issue.

The judgment is here.