Legal professional privilege - Disclosure and inspection of documents
Stiedl v Enyo Law LLP and others: Queen's Bench Division, Commercial Court (Mr Justice Beaston): 18 October 2011
The underlying proceedings concerned actions for, inter alia, breach of contract and statutory duties brought by subscribers to Innovator and Gentech Technology Systems against InnovatorOne plc (Innovator) and others, relating to sums allegedly lost by them as a result of investments in schemes promoted by Innovator and others (the main proceedings).
Innovator went into liquidation in May 2007. The liquidators were provided with an external hard drive and copied data files containing documents from Innovator's server. The main proceedings were issued in January 2009. In April 2009, the liquidators supplied the hard drive to the firm of solicitors then acting for the claimants (the second respondent).
Towards the end of June 2009, the applicant, who was one of the defendants in the main proceedings, was told by solicitors representing another defendant that some 3,000 of his personal documents were contained in the disclosure made to them by the second respondent. In July 2009, the applicant wrote to the liquidators and to the second respondent stating that the documents that the liquidator had provided to the second respondent included documents belonging to him which were confidential and/or privileged.
In response, the second respondent undertook not to carry out any further review of the documents within the directories referring to the applicant or his personal assistant (the eleven directories) without first giving the applicant 72 hours notice. In an email dated 13 August 2009, the applicant requested that the data be put on DVD discs and that it be forwarded to his private address in Paris. The second respondent replied by email on the next day, stating, inter alia, that it would deliver the hard drive to the applicant's address on 18 August in order that the applicant could review its contents and identify documents in relation to which he asserted rights of privilege or confidentiality by close of business on 1 September. It also stated that its own review of the directories would commence on 2 September.
There was no reply to this email, and when the applicant did not respond by 2 September, or ask for an extension of time, it was decided to subject the documents in the eleven directories to a Tier 1 review. In a letter dated 16 September, the applicant asserted that 3,160 of the 180,000 documents stored on the hard drive were 'private and privileged' (disputed documents). An independent review was subsequently carried out, in which the reviewers considered the relevance of the disputed documents to the issues raised by the claims in the main action and whether any potentially relevant documents were privileged.
The supplementary report prepared by the reviewer and dated November 2010, which adopted a narrower test of relevance than their first report, identified 25 documents as both prima facie privileged and relevant. The first respondent had been formed in October 2010 by solicitors who had acted for the claimants since 2006, whilst previously working for the second respondent. The applicant subsequently made an application seeking an injunction restraining the first and/or second respondents from acting for the claimants in the main proceedings and from making use of the privileged documents which had come into their possession.
The applicant submitted, inter alia, that the first and second defendants should be restrained from acting for the claimants in the main proceedings for the following reasons, inter alia: (i) the contents of his personal computer had been downloaded onto an external hard drive which the liquidator had provided to the claimants' solicitors; (ii) the solicitors had conducted a review of the documents, including confidential and privileged documents, and, in deciding whether a document was relevant or irrelevant, would have read the document and communicated any matters of import to senior members of the team; and (iii) since a significant number of documents held and examined were assessed by the independent assessors as relevant and prima facie privileged, there would be considerable potential damage to his case.
It was submitted on behalf of the first and second respondents, inter alia, that the solicitors who had reviewed the prima facie relevant documents had no recollection of the documents reviewed or that they could not remember the contents of them. Furthermore, the review was carried out by junior solicitors and paralegals only. Consideration was given to Solicitors, a firm of, Re  3 All ER 482. The principal issue that fell to be determined was whether there was a real risk that information in the documents over which the applicant claimed privilege and confidentiality could be used so as to yield an advantage to the claimants in the main proceedings or a disadvantage to the applicant.
The court ruled: Having regard to established principles, the application would be dismissed. On the facts, the combined effect of the evidence of the solicitors working for the first and second respondents was that no substantive information would have been gleaned under a Tier 1 review.
The applicant's argument had proceeded on an erroneous analysis of the nature of the process involved in a Tier 1 document review. The purpose of the exercise was to remove completely unrelated documents, and in that context, the supposition that documents were substantively considered or analysed was unreal. Furthermore, there was no evidence that significant or indeed any use of the prima facie privileged documents had been made in formulating or putting forward the claimants' case in the proceedings, or of any knowing use of such documents. Any knowledge of them would appear to have been confined to paralegals and junior fee-earners.
The case had some similarity to the Solicitors, a firm of, Re  3 All ER 482decision, in which it was held that, if any confidential information had ever been communicated to the solicitor in question, there was no real risk that such confidential information would inter alia be recallable, having regard to the lapse of time, the progress of the proceedings and the highly technical issues involved (see , , ,  of the judgment).
The first respondent would be permitted to continue to represent the claimants in the main proceedings on the basis that, pending any further order, no use of the documents identified as prima facie privileged be made in those proceedings (see  of the judgment).
Ablitt v Mills & Reeve The Times 24 October 1995 explained; Goddard v Nationwide Building Society  3 All ER 264 considered; English and American Insurance Co Ltd v Herbert Smith & Co  FSR 232 considered; S v Switzerland (Application 12629/87) 14 EHRR 670 considered; Solicitors, a firm of, Re  1 All ER 353 considered; Ridehalgh v Horsefield  3 All ER 848 considered; Solicitors, a firm of, Re  3 All ER 482 considered; Schuppan (a bankrupt), Re  2 All ER 664 considered; R v A  3 All ER 1 considered; Koch Shipping Inc v Richards Butler (a firm)  2 All ER (Comm) 957 considered. The applicant appeared in person.
Jamie Smith (instructed by Enyo Law LLP) for the first respondent.