Court of Appeal prevents use of privileged document disclosed in error where mistake obvious to second more senior solicitor

The Court of Appeal has added what it has termed "a modest gloss" to the principles on when the court will restrain use of a privileged document disclosed in error, on the basis that there has been an obvious mistake. The court may grant relief where the solicitor inspecting the document does not spot the mistake, but refers the document to a colleague who appreciates the error before use is made of the document: Atlantisrealm Limited v Intelligent Land Investments (Renewable Energy) Limited [2017] EWCA Civ 1029.

The question before the court is therefore not only what the first reviewer of a document appreciated, but also what other (including more senior) members of the team later appreciated (or presumably should have appreciated) when the document was shown to them.

Background

CPR 31.20 provides: "Where a party inadvertently allows a privileged document to be inspected, the party who has inspected the document may use it or its contents only with the permission of the court."

In Al-Fayad & Ors v The Commissioner of Police for the Metropolis & Ors [2001] EWCA Civ 780 the Court of Appeal reviewed the operation of CPR 31.20 and formulated a number of principles. The starting point is that where a party has given inspection of documents and included privileged documents by mistake, it will in general be too late to correct the mistake by obtaining injunctive relief. However the court has jurisdiction to intervene where justice requires, including where the documents have been made available for inspection as a result of an obvious mistake.

A mistake is likely to be held to be obvious where the solicitor receiving the documents appreciated that a mistake had been made before making some use of the documents or it would have been obvious to a reasonable solicitor in his position that a mistake had been made.

Where a solicitor gives detailed consideration to the question whether the documents have been made available for inspection by mistake and honestly concludes that they have not, that will be a relevant and in many cases an important, pointer to the conclusion that it would not be obvious to the reasonable solicitor that a mistake had been made, but it is not conclusive.

In Rawlinson & Hunter Trustees SA & Ors v Director of the Serious Fraud Office No 2 [2014] EWCA Civ 1129 (see post here) the Court of Appeal emphasised that just because a document was obviously privileged did not necessarily mean it had obviously been disclosed by mistake.

Facts

The underlying case concerned alleged breaches of certain warranties in an SPA. The defendant's lawyers in the litigation, GD, disclosed 4,891 documents, including approximately 150 emails involving the defendant's lawyers in the corporate transaction, SW.

The intention was to disclose SW documents that GD had concluded were not privileged, ie documents which were common to the parties or progressed elements of the transaction and did not contain any element of advice. The disclosure included, however, an email from SW to the defendant commenting on the draft SPA. That email, whilst not fatal to the defendant's case provided "useful ammunition" for the claimant regarding how the warranties were to be construed.

The solicitor principally responsible for reviewing the documents on behalf of the claimant, F, formed the view that the defendant had intended to waive privilege in the email. F then drew the email to the attention of N, a more senior colleague. N contacted C, a solicitor at GD, concerning arrangements for a settlement meeting, stating in the email:

"I don't know whether you have started your consideration of disclosure yet? The email below will be of interest to you."

GD responded immediately claiming the email was privileged and had been disclosed inadvertently. N was asked to delete all copies. N refused, asserting that privilege had been waived. GD applied for an injunction.

Decision

The Court of Appeal (Lord Justice Jackson with whom Lord Justice Simon agreed) held that the email had been inadvertently disclosed (overturning the judge who considered no evidence had been adduced to prove this). The court thought it was perfectly clear what had happened. One of the junior lawyers who had reviewed the documents had made a mistake and it didn't matter that they had not given evidence.

It was not possible for the Court of Appeal to go behind the judge's finding of fact that it was not obvious to F that the email had been disclosed by mistake; a number of SW emails had been disclosed and F believed the defendant had decided to waive privilege.

The court considered, however, that N did appreciate that disclosure of this significant document was a mistake. That was clear from his email to the defendant's solicitors. N had drawn the email to C's attention in the belief that he was unaware of it. If there had been a deliberate decision to waive privilege in respect of such an important document, it was hardly likely that C would have been unaware of it.

The court rejected the suggestion that all that mattered was the opinion of F, as the first solicitor to review the document. It appeared that the 'two solicitors' situation had not been considered in the authorities. The facts of the case therefore made it necessary to add a modest gloss to the principles formulated by the Court of Appeal in Al Fayed and Rawlinson:

"If the inspecting solicitor does not spot the mistake, but refers the document to a more percipient colleague who does spot the mistake before use is made of the document, then the court may grant relief. That becomes a case of obvious mistake."

Although the claimant had made extensive use of the email, that was only  after N was shown the document. It was therefore not unjust to grant the injunction restraining use, notwithstanding the extensive use made of the document since.

Finally, the court observed that mistakes will happen and if the mistake is obvious, solicitors should cooperate to put things right as soon as possible. It should not be necessary for the courts to become involved.