Legal privilege in fraud claims - some useful clarifications

A recent High Court decision regarding legal professional privilege has addressed a number of issues that may have particular relevance in fraud claims: Al Sadeq v Dechert LLP [2023] EWHC 795 (KB).

The proceedings involved allegations of serious wrongdoing against the claimant by an international law firm in the course of the firm's work on an investigation into an alleged fraud. The court dismissed the claimant’s challenges to the firm’s privilege claims over various categories of documents.

The key points arising from the decision are:

• Litigation privilege can potentially be asserted by non-parties to litigation, if they have a sufficient interest in it that they seek legal advice and, in that connection, communicate with third parties to obtain information to enable the advice to be provided (provided all the other conditions were met, including the dominant purpose test).

  The court observed that a victim of fraud is a good example of a person likely to have such a sufficient interest in proceedings to which it is not a party or prospective party. While the relevant litigation in this case was criminal proceedings, the judgment does not indicate that the court's conclusion on this issue is limited to such proceedings, as distinct from civil litigation.

• The test for the application of the iniquity exception to privilege is whether a document was created in furtherance of a fraud or other iniquity. It is not sufficient that the document was generated by or reports on the iniquitous conduct.
• Where lawyers are engaged to conduct an investigation (such as an investigation into an alleged fraud), legal advice privilege is likely to apply unless there is clear evidence that the engagement does not encompass the provision of legal advice and assistance related to the investigatory work.

For more on the decision, see this post on our Litigation Notes blog.