Application of litigation privilege to competition investigations

In a ruling last Tuesday, 20 March, the Competition Appeal Tribunal has held that notes of third party witness interviews conducted by a party's lawyers during an OFT investigation under the Competition Act 1998 were subject to litigation privilege under English law, as by the time the interviews took place the OFT's investigation could be regarded as "sufficiently adversarial" to amount to litigation.

This is the first time the English courts have addressed the question of whether litigation privilege is available for competition investigations. The question is significant because this head of privilege offers protection for communications with third parties, unlike legal advice privilege which is restricted to lawyer / client communications. However, litigation privilege only applies when litigation is in reasonable contemplation, and for these purposes litigation means proceedings which are "adversarial" rather than investigative or inquisitorial. This line is not always easy to draw, and difficult questions can arise in the regulatory context as to whether a particular process gives rise to litigation privilege. It is therefore welcome to have some clarification of the position for competition investigations.

However, the ruling leaves a number of issues unresolved. The CAT considered whether the OFT's investigation could properly be classified as adversarial at the particular time the witness interviews had taken place, by which point the OFT had issued two "Statements of Objections" alleging infringements of the Act and the appellant was contesting the OFT's case. The CAT said it had deliberately framed the question in this manner to focus on the particular facts of this case and not wider questions of principle which were not raised in it. Therefore, although the ruling demonstrates that litigation privilege can arise in competition investigations, it remains untested whether the privilege will be available for all such investigations and at what stage it might arise in a given case. For more detail on the decision and its implications see our Competition, regulation and trade e-bulletin.