Redactions for privilege, irrelevance and public interest immunity, and waiver of privilege: High Court provides guidance

In a recent decision, the High Court has considered various challenges to redactions on grounds of privilege, irrelevance, and public interest immunity (PII), as well as the question of when privilege will be lost by referring to a document in open court and/or in a party's statements of case: Eurasian Natural Resources Corporation Ltd v the Director of the Serious Fraud Office & Ors [2023] EWHC 2488.

Points of interest from the decision include:

• The court will generally take a cautious approach to exercising its discretion to inspect documents to determine whether redactions had been properly applied.
• While parties are required to explain the basis on which material is redacted for privilege, the court will not require an explanation to be provided in such detail that it would destroy the privilege claimed.
•  As for redactions on grounds of irrelevance, material can be redacted only if it is not relevant to any point in issue between the parties – whether or not that issue forms part of the List of Issues for Disclosure.
• Confidentiality – and therefore privilege – may not always be lost in an entire document where parts of it are referred to in open court.
• Where the content of a privileged document is relied on in a party's statement of case, privilege will generally be waived, but the party may be allowed a grace period in which to amend the pleading in order to avoid a broader waiver.

Background

The decision relates to ongoing proceedings brought by the claimant, Eurasian Natural Resources Corporation, against the Director of the Serious Fraud Office (SFO) and current and former SFO employees, in which the claimant alleges that sensitive information about the SFO's criminal investigation into the claimant had been leaked by SFO officers to journalists and other third parties.

In the proceedings, the SFO disclosed a report from an internal investigation, in which it was found that the third defendant (an SFO employee) had a "case to answer" in relation to the leaks. The SFO had made various redactions to the report on the basis of PII, privilege, and irrelevance and confidentiality, which the claimant sought to challenge. The claimant also sought a declaration that privilege had been waived over a separate document, due to it having been referred to in court and in the SFO's pleadings.

Decision

Inspection of privileged documents

Paragraph 14 of Practice Direction 57AD provides that the court may inspect documents if "necessary" to determine whether the privilege claimed exists. Under this provision, the claimant applied for the court to inspect the report to confirm whether the SFO had a proper claim to litigation privilege in information it had redacted.

In considering the application, the High Court cited the decision in UTB LLC v Sheffield United Ltd and others [2019] EWHC 914, in which Sir Geoffrey Vos C (as he then was) confirmed that the court has a general discretion to inspect documents, which is not limited to cases in which the court is reasonably certain that the test for privilege has been misapplied (as had been suggested in previous decisions). Vos C also held that the court should be cautious about inspecting such documents and should be alive to the danger of looking at documents out of context.

In this case, the High Court rejected the claimant's application, noting that the time period for litigation privilege had not been disputed and that while the report was a single document and the number of challenged redactions were limited, that was not in itself sufficient to warrant inspection of the report absent other factors which tend to support inspection. Moreover, the nature of the challenges raised would require the court to have knowledge of the context around the redacted information, which was unlikely to be apparent merely by reading the unredacted report. In the circumstances, it was neither necessary nor desirable to inspect the redactions to determine whether they were in fact privileged.

Additional explanation on privilege

In the alternative, the claimant sought an order requiring the SFO to give an additional explanation of the basis on which it asserted privilege over redacted passages, in particular "a description of the general nature or purpose of the information (and its corresponding relevance to the reasoning of the [report])".

Paragraph 16.2 of Practice Direction 57AD provides that any redaction for privilege must be accompanied by an "explanation of the basis on which it has been undertaken". The claimant submitted that in certain cases it may be appropriate for a party to go further than the basic explanation, particularly where the basis for the redaction was unlikely to be apparent (relying on Butcher J's decision in ENRC v Dechert LLP, Gerrard & the Director of the SFO [2020] EWHC 1002).

The court noted, by reference to Butcher J's decision, that what is ordinarily required under paragraph 16.2 is a list of documents which have been redacted, which identifies for each the reason for the redaction. In compliance with this requirement, the SFO had supplied a redacted copy of the report, with codes indicating whether redactions had been applied for privilege or confidential and irrelevant information. Moreover, the SFO had confirmed that, for each of the relevant privilege redactions, it asserted litigation privilege arising from its criminal investigation into the claimant. The SFO had also explained that one of the redactions concerned an unsolicited approach by a third party to make disclosures to the SFO for the purposes of its investigation.

The court therefore rejected the claimant's application, commenting that it was difficult to see how the additional explanations could be provided without defeating the very claim to privilege, as it would in all likelihood require the SFO to disclose the substance of the redacted information. Even if further information could be provided without destroying privilege, the information sought went beyond what is required by the Practice Direction and the authorities.

Irrelevance and confidentiality

The claimant also challenged redactions for irrelevance and confidentiality, submitting that the information in question was in fact likely to be relevant. The SFO on the other hand argued that it had sought to draw a principled dividing line, preserving the confidentiality of its sensitive internal operations, save to the extent that the material was relevant to the pleaded issues.

The High Court held that, in determining relevance, the SFO had applied the test too narrowly. It had considered whether the material was relevant to the List of Issues for Disclosure, but that was an error, as material can only be redacted if it is not relevant to any point in issue between the parties, whether on the List of Issues or not. The court however rejected the claimant's application for the court to inspect the report. While the SFO had taken too narrow an approach, it was better to direct the SFO to undertake a further review of its redactions in light of the court's judgment.

PII

The SFO had also redacted the names of human sources who had provided information in connection with its criminal investigations on the basis of PII. There was a public interest in the protection of its sources, as disclosing their identity may deter other sources from offering information in the future.

The claimant argued that the document was however fundamentally important to the proceedings and that the SFO had made a blanket decision to redact all names, when it should have conducted a proportionate evaluation of each redaction to determine the risk of harm to the public interest and whether such harm would be substantial.

The High Court rejected the claimant's application, confirming that the test for asserting PII remains the three stage test explained by the House of Lords in R v Chief Constable of West Midlands Police, ex parte Wiley [1995] 1 AC 274. Firstly, is the information relevant and material to an issue in the proceedings? Secondly, if it is relevant and material, is there a real risk that disclosure of the information in question will cause substantial harm to a public interest? Thirdly, even where a real risk of substantial harm can legitimately be said to arise, is the public interest in withholding inspection nonetheless outweighed by the public interest in the fair administration of justice?

Applying that test, the High Court accepted that there was a real risk that disclosure of the information in question would cause substantial harm to the public interest, outweighing the public interest in the fair administration of justice.

Loss of confidentiality by reference in open court

The claimant also applied for production of an unredacted copy of a document (referred to as Document A) on various bases, including that confidentiality in the entire document was lost when parts of it were referred to in open court at a previous hearing and it was read in full by the judge.

The High Court cited the principles set out in Serdar Mohammed v MoD [2013] EWHC 4478: there is a general public right of access, based on the principle of open justice, to documents read or referred to in court. The default position is that reference to a document containing confidential information in open court will put the information into the public domain and deprive it of its confidential character. This is, however, subject to the power of the court to prevent or restrict the further publication or use of the information, and thereby preserve its confidentiality, if there is good reason to do so.

On this basis, the court rejected the application. It did not accept that merely because Document A had been read in full by the judge it would have been necessary for the public to be allowed access to the full unredacted version in order to follow what was going on. Nor did the court accept that the judge in question would have acceded to the request for an unredacted copy to be produced, having acknowledged that it was highly confidential and in parts particularly sensitive. It was therefore clearly appropriate for the balance to be struck by preserving its confidentiality, so that the default position should not apply.

Waiver of privilege by reliance in the pleadings

The SFO had also referred to Document A in its pleadings. The claimant argued that if the pleadings remained unamended, this would trigger a waiver of privilege come trial.

The SFO submitted that mere reference to a document does not constitute deployment. Instead, reliance must be placed on the content of the document. Even if reliance is placed on the content of a document, such reliance in a pleading does not constitute deployment, and a party has a grace period in which to decide whether or not to amend its case appropriately in advance of the trial.

The court held that the drafting in question put in issue the content of Document A and that would amount to a loss of privilege, if the SFO did not elect to amend its pleadings.