Global firm Dechert has failed in a second attempt to have a challenge to a multi-million-pound legal bill heard in public.
The Court of Appeal has ruled that a former client of the firm had not waived its privilege rights.
Mining giant ENRC has accused Dechert of ‘systematic and gross overcharging’ over advice the firm gave in relation to a criminal investigation by the Serious Fraud Office. ENRC also alleges Dechert ‘failed to comply with its professional obligations’. Dechert had billed ENRC £16.3m for its work and a total of £6.6m is currently in dispute.
Dechert denies the allegations, arguing that it needs to cite legally privileged material to defend itself, including online and to the press. Dechert says the trial should be held in public so it can ‘clear its name’.
In a previous hearing in October 2014, Mr Justice Roth said that there would be the potential for ‘very real prejudice’ to ENRC if the matter was heard in public due to an ongoing investigation by the SFO.
On appeal, Dechert said that the decision did not conform to the principle of open justice. The firm said that by commencing proceedings against its solicitors, ENRC had impliedly waived any right to claim privilege.
But ENRC said the waiver was limited to the extent necessary to enable Dechert to defend such proceedings, and said a private hearing was needed to protect its privilege, which it noted was an ‘important public interest’.
Hearing the appeal, Lady Justice Gloster (pictured) noted the dispute was ‘clearly of importance for both parties’. Dechert was represented by two silks and a junior barrister, while ENRC was represented by three top silks and a junior.
Gloster said that because of the ongoing criminal investigations into ENRC’s operations, Roth had been ‘clearly correct’ to conclude that the hearing should be held in private. She also concluded that ENRC was still protected by legal professional privilege, as she said there was no reason why an implied waver should not be limited in scope.
She said: ‘An implied waiver is for a specific and limited purpose […] and LPP is so important a principle of the legal system that an implied exclusion of it should be confined in scope.’
A spokesperson for Dechert said: ‘We stand by our work in this matter. These proceedings began in public, as is usual for costs assessments, and we would have preferred them to have continued on that basis. That said, we now look forward to addressing these issues before the costs court without further delay.’