Court of Appeal decision in SFO v ENRC
In a judgment handed down on 5 September 2018, the Court of Appeal (England and Wales) overturned the controversial High Court decision in the Director of the Serious Fraud Office v Eurasian Natural Resources Corporation Limited  EWCA Civ 2006 (“ENRC”).
The judgment provides welcome confirmation that documents produced during an internal investigation can be protected by litigation privilege, following a fraught period where the Courts seemed determined to drive a horse and cart through the very concept of privilege in a number of cases.
Many saw this as a death knell for protected internal investigations
In the High Court judgment from May 2017, Mrs Justice Andrew opined that internal investigations were carried out by a company to pull together “evidence that you hope may enable you (or your legal advisers) to persuade [a third party] not to commence proceedings against you in the first place” did not have a litigation purpose and therefore litigation privilege may not apply to any documents created during that investigation. Many saw this as a death knell for protected internal investigations until the case of Bilta & Others v RBS  EWHC 3535 (“Bilta”) restored some of the status quo in February 2018.
In allowing the ENRC appeal, the Court of Appeal noted that it is “obviously in the public interest that companies should be prepared to investigate allegations from whistle blowers or investigative journalists, prior to going to a prosecutor such as the SFO, without losing the benefit of legal professional privilege for the work product and consequences of their investigation”. Other key points to take away from the Court of Appeal decision in ENRC are:
- Documents prepared following legal advice aimed at avoiding litigation can be protected by litigation privilege.
- The ‘trigger point’ or point at which the instruction of an investigation by solicitors may be protected by litigation privilege is fairly early; an investigation need not have commenced, but may be part of the factual landscape. When ENRC received a letter from the SFO in August 2011, the Court said that criminal proceedings were “certainly” in the reasonable contemplation of the company but criminal proceedings were also reasonably contemplated earlier, when it began its internal investigation in response to the whistle blower report in April 2011.
- The dominant purpose of the instruction to prepare the report must still be litigation and this is a question of fact. The requirement of dominant purpose is not satisfied if the purpose is for litigation in addition to another, equally important purpose, such as corporate governance.
It is imperative to seek early, specialist advice to ensure that every precaution is taken to protect internal investigations
This case may be appealed to the Supreme Court, indeed the Court of Appeal indicated that it would like to see it appealed to the highest Court in the land. So, if the last two years of jurisprudence on the topic of privilege have taught us anything, it is that it is imperative to seek early, specialist advice to ensure that every precaution is taken to protect internal investigations. The Appeal Court may have taken us back from the brink, but the concept of privilege is by no means safe yet.
Link to ENRC case: https://www.bailii.org/ew/cases/EWCA/Civ/2018/2006.html