Court of Appeal finds one defendant cannot claim litigation privilege over text messages, despite accepting other defendants can do so

The Court of Appeal has found that a defendant was not entitled to claim litigation privilege in certain text messages as no litigation was in reasonable contemplation against him at the time they were created - despite the court accepting that other defendants to the litigation (including a company of which he was a director) had a good claim to privilege in the messages. Nor could he claim common interest privilege, as he did not have his own interest in the subject matter of the messages at the relevant time: TBD (Owen Holland) Ltd v Simons and others [2020] EWCA Civ 1182.

This decision illustrates the established principle that litigation privilege can only arise in favour of a person who is a party to the litigation in question. It is unusual, however, in that the implication appears to be that the text messages will be privileged and therefore cannot be relied on as against certain defendants to the action, but will not be privileged and therefore can be relied on as against another defendant to the same action. It is not clear how that will work in practice.

The judgment may also be seen as difficult to reconcile with the principle "once privileged, always privileged" - unless waived by the privilege holder - which was vividly illustrated by the Court of Appeal's decision last year in Addlesee v Dentons Europe LLP [2019] EWCA Civ 1600 (considered here). In that case, the court confirmed that the documents of a dissolved company remained privileged, regardless of whether there was anyone who could assert the company’s privilege.

It may be that the cases can be distinguished on the basis that in TBD the claimant was not applying for disclosure of the text messages; they were already in its possession, having been obtained pursuant to (and indeed in breach of) a search and imaging order. (That aspect of the judgment will be the subject of a separate post on our Civil Fraud and Asset Tracing Notes blog. *Note: now available here.) The case may therefore be seen as akin to an application to restrain use of privileged documents, where the question of whether the applicant has standing to assert the privilege may come into play. However, it remains to be seen how these authorities may be applied in future cases.

Background

The first defendant (Mr Simons) was a former employee of the claimant. The second defendant (G2A Limited, a UK incorporated company which is now in Liquidation) was Mr Simons's subsequent employer and a competitor to the claimant. The claimant alleged that Mr Simons breached the terms of his employment by disclosing trade secrets or other confidential information to G2A and allowing G2A to use it, and that G2A procured Mr Simons's breaches. The claimant also brought claims for infringement of copyright.

The claimant obtained a search order and an imaging order against (among others) Mr Simons and G2A, under which it obtained a large volume of documents belonging to them. The claimant's solicitors reviewed certain of these documents in circumstances that were found to be a breach of the court's orders. The claimant used the documents in question to (among other things) introduce proposed claims against a number of new defendants including Mr O'Boyle, who was a director of G2A, and to seek permission to bring committal proceedings against him for contempt of court.

The application to bring committal proceedings against Mr O'Boyle was based, in part, on a print-out of text messages between Mr O'Boyle and Mr Simons, referred to in the judgment as "the Transcript", which the claimant had obtained pursuant to the court's search and imaging orders.

Mr O'Boyle challenged the application on a number of grounds including that the Transcript was subject to litigation privilege, or alternatively common interest privilege. The judge at first instance (HHJ Keyser QC) found that Mr O'Boyle could not claim privilege in the Transcript, and adjourned the permission application for further consideration after the trial of the action.

Mr O'Boyle appealed the order, including on the ground that the judge was wrong on the issue of privilege.

Decision

The Court of Appeal overturned the order adjourning the application and instead refused permission to bring committal proceedings. However, it dismissed the appeal against the judge's finding in respect of privilege. Arnold LJ gave the leading judgment, with which David Richards and Newey LJJ agreed.

Arnold LJ commented that the question of privilege was not merely academic despite the refusal of permission to bring committal proceedings. That was because, he said, Judge Keyser's ruling was binding on Mr O'Boyle, although not other parties to the action, unless reversed by the Court of Appeal.

Arnold LJ accepted that both Mr Simons and G2A had a good claim to litigation privilege in the Transcript since, at the time the communications took place, they were both defendants to the litigation and the discussions in the Transcript were about obtaining evidence for the defence of the claim, obtaining advice from their lawyers, and the advice the lawyers had given. He rejected the claimant's submission that litigation privilege was restricted to (i) evidence (as opposed to communications about obtaining such evidence) and (ii) communications which revealed what advice had been requested or given. He did not accept that the privilege is so narrowly confined.

However, Mr O'Boyle did not have a good claim to litigation privilege because, at the time the communications recorded in the Transcript took place, Mr O'Boyle was not a defendant and no litigation was "reasonably contemplated" against him personally.

Arnold LJ also rejected Mr O'Boyle's alternative case based on common interest privilege. Given that litigation was not reasonably in contemplation against him personally at the relevant time, he could only have been acting in his capacity as a director of G2A (and another company that was also a defendant at the time). He therefore did not have his own interest in obtaining legal advice about the claims, nor was he exchanging advice with the (then) defendants. The fact that he was a major shareholder in G2A did not affect this; even assuming that there may be a common interest between a company and shareholder for the purposes of litigation privilege, there was no evidence to suggest that Mr O'Boyle was involved in his capacity as shareholder rather than director.