The Court of Appeal’s judgment in SFO v ENRC has been strongly welcomed by our major corporate clients.
It restores and reinforces the view previously accepted by legal professionals regarding when litigation privilege begins, where a large corporate becomes aware of potential criminal liability and commences its own investigation.
The court decisively overruled the first instance decision on the issue of when litigation privilege comes into play, and also highlighted that the current English law position on legal advice privilege is out of line with international common law.
The court noted that any judicial change to the relevant test could only be made at the Supreme Court level; but unusually went on to state that if it had the power, then it would be minded to overturn the existing position.
The decision provides much greater certainty to corporates operating in the UK which wish to investigate suspected criminal conduct by employees, but which have increasingly feared creating potentially damaging documents, particularly interview notes with current and former employees, that are not covered by legal privilege.
The decision also provides a much clearer basis for asserting litigation privilege in the context of internal investigations into suspected regulatory breaches, where a firm wishes to investigate a matter fully as it is concerned that enforcement proceedings could follow.
While in every case it will be a question of fact as to when enforcement proceedings are actually in reasonable contemplation, in a number of respects this decision provides support for the assertion that litigation privilege can attach at an early stage, including prior to a regulator commencing its own investigation.
If that is the case, then arguments over the scope of legal advice privilege in the context of internal investigations would quickly become academic.
Nathan Willmott, co-head of global investigations, Bryan Cave Leighton Paisner, London EC4