UK: Court of Appeal ruling on scope of protection for internal investigations

The Court of Appeal has handed down its eagerly awaited decision in The Director of the Serious Fraud Office v Eurasian Natural Resources Corporation Ltd. The High Court had found that notes of interviews with employees were not protected by litigation privilege, given that the employer's purpose was to investigate allegations made by a whistleblower and, in its view, this failed the dominant purpose test. Employers will welcome the Court of Appeal ruling that the purpose of investigating allegations made by a whistleblower was part and parcel of preventing or defending litigation and therefore sufficient to meet the dominant purpose test. It also considered that documents prepared in order to avoid or settle contemplated litigation were covered by litigation privilege.

In relation to legal advice privilege, the Court of Appeal considered itself bound by Three Rivers No 5 to find that the privilege is limited to communications between a lawyer and those tasked with seeking and receiving advice on behalf of the client company. However, the court said that, if it had been open to it to depart from Three Rivers No 5, it would have been in favour of doing so – but this is a matter for the Supreme Court.

The decision is considered further in our litigation blog post.  The SFO has since decided not to appeal the case further.