High Court finds privilege not lost despite document being referred to in open court

The High Court has recently held that privilege was not lost in a solicitor’s note of a client interview in circumstances where the note had been disclosed to the SFO under a limited waiver and then referred to in the course of argument during a criminal trial held in public: SL Claimants v Tesco plc; MLB Claimants v Tesco plc [2019] EWHC 3315 (Ch).

In this case, there was no contention that the party entitled to the privilege had deployed the privileged note in such a way as to bring the principle of collateral waiver (or the “cherry picking” rule) into play. That principle applies where a party to proceedings deploys privileged material to support its case, and may result in a requirement to disclose further privileged material to avoid giving an unfair or misleading impression.

In the present case, the only question was whether confidentiality had been lost so as to result in a loss of privilege. The judge found that confidentiality had not been lost in the note itself, despite parts of it having been quoted or summarised in open court and/or read silently by the judge.

The decision is of interest in showing that a loss of confidentiality in some of the information contained in a privileged document will not necessarily mean a loss of confidentiality (and therefore privilege) in the document itself, and as a reminder that collateral waiver has no place unless there’s deployment by the party entitled to the privilege. That will be welcome to those seeking to maintain privilege despite some part of the information contained in a privileged document having been made public.

However, the question of whether references to a document, or the information it contains, are sufficient to result in a loss of confidentiality in the document itself is described by the court as “a matter of degree”. The risk of a loss of privilege in such circumstances is therefore obvious, and caution should be exercised. That is particularly the case given the (somewhat surprising) suggestion in the judgment that confidentiality and therefore privilege may be lost due to the application of the principle of open justice, even if the references to a privileged document would not have been sufficient to amount to a loss of confidentiality without recourse to that principle.

Background

The issue arose in the context of claims brought by shareholders of Tesco under section 90A of the Financial Services and Markets Act 2000 (“FSMA”) relating to false and misleading statements allegedly made by Tesco regarding its commercial income and trading profits in 2014.

The High Court considered various applications for specific disclosure, among other applications. This blog post focuses on the application by certain claimants that Tesco produce a note of an interview between a senior in-house lawyer at Tesco and Tesco’s external lawyers (“the Note”), in which Tesco asserted privilege. A separate application that the claimants produce documents relevant to the question of whether their investment decisions were made in reliance on the defective publications is considered in this post on our Banking Litigation Notes blog.

The Note is described as having recorded the in-house lawyer’s “first account” given to Tesco’s external lawyers of what she knew of the commercial income issues at the relevant time. The claimants accepted for the purposes of the application that the Note was privileged at the time it was produced. However, they contended that confidentiality (and therefore privilege) in the document was lost because it had been deployed in open court during related criminal proceedings.

Tesco had provided the Note to the SFO pursuant to a limited waiver of privilege, but had declined to waive privilege in a note the external lawyers had prepared of a “first account” given by Tesco’s Group General Counsel. The SFO’s attempt to compel production of that note was refused by Sir John Royce (the judge at the criminal trial). In the course of argument in that application, counsel had referred to the Note, quoted paragraph 1 of it and invited Sir John to read to himself the first three pages of the document (of a total of nine pages), and then summarised certain aspects of the Note.

The claimants contended that the Note had therefore lost confidentiality, and so was no longer privileged.

Decision

The High Court (Hildyard J) refused the claimants’ application that Tesco produce the Note.

The judge referred to the claimants’ submission that reference to a document can destroy its confidentiality in two ways. First, its contents may be given sufficient publicity that it can no longer be regarded as confidential, eg if it is read out in open court. That is a matter of fact and degree. Secondly, confidentiality may be lost because references made in public engage the principle of open justice, which gives the public a right of access to the evidence placed before the court and referred to during the hearing so that the basis for the court’s decision can properly be understood.

Tesco, on the other hand, drew a distinction between information contained in a document and the document itself, submitting that public reference to the information might cause a loss of confidentiality in the information but not, or not necessarily, in the document itself.

The judge noted that the question of what court documents may be accessed by a member of the public is ultimately within the discretion of the court, as emphasised by the Supreme Court in Dring v Cape Intermediate Holdings Ltd [2019] 3 WLR 429 (considered here). The court may have to balance the principle of open justice against the protection of private interests including confidentiality.

The judge’s reasons for refusing the application included the following:

1. The claimants did not contend that the Note had been deployed in the proceedings so that there was a waiver of privilege; only loss of confidentiality was in issue.
2. There is a distinction between the information in a document and the document itself. Whether references to the document constitute “such an exposure of the document to the public” that confidentiality is lost “is a matter of degree”. In the present case, the references did not, either in terms of their detail or their extent, amount to a loss of confidentiality in the document itself.
3. Disclosure was not required to enable the public to understand the court’s approach to the question of whether to issue a witness summons in the criminal proceedings.

The judge noted, however, that if in the course of the trial the Note was deployed or referred to the matter will have to be re-assessed at that time.