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Are the parameters of professional privilege about to be redefined?

Date:1 AUG 2018
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Family analysis: Sarah Bazaraa, senior associate at Pannone Corporate LLP, looks at the unusual facts in Bruzas v Saxton [2018] EWHC 1619 (Fam), [2018] All ER (D) 160 (Jun) and considers whether the issues raised in the case may redefine the boundaries of legal professional privilege.

What are the practical implications of the case?

One of the most important stages in any litigation will be the disclosure of relevant documents. It allows the parties to assess the merits of a dispute and for the courts to determine its outcome with all cards firmly on the table.

A party is, however, entitled to claim privilege and withhold inspection of relevant documents if those documents are created during the course of seeking legal advice or in contemplation of litigation. Over the years, the courts have determined the boundaries in which privilege exists. The authorities give guidance on what should be done about privileged documents which are inadvertently disclosed or those which further a fraudulent or criminal design.

The case of Bruzas v Saxton is, however, unique. It raises the novel question of whether privilege can be asserted in deliberately disclosed privileged material which potentially reveals acts of wrongdoing. The case invites the court to reconsider the parameters for privilege and the circumstances in which this fundamental right may be lost.
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What was the background to the proceedings?

The parties to the proceedings were formerly married but divorced in 2013. In March 2014, the husband and wife agreed terms for a consent order which included financial remedies such as provision for certain capital redistribution and payments from the husband to the wife. The wife subsequently became dissatisfied with the terms of the consent order and applied to set it aside. Parker J dismissed that application at a hearing in December 2017.

Following the wife’s unsuccessful application, sometime in January 2018 Parker J received through the post documents which contained an account of alleged communications between the husband (as client) and his solicitor and counsel during 2017. The material was delivered to Parker J by a paralegal employed by the firm of solicitors who had represented the husband.

Following deliberation of the documents, Parker J then supplied copies to the parties and a hearing was listed on 28 February 2018 to consider what should happen to the documents.

Prior to this hearing, the wife filed and served an unissued application notice to dismiss the December 2017 order by which her application to set aside the consent order was dismissed. The wife’s application relied on alleged acts of perjury committed by the husband and his legal team, it being understood that this application was triggered by the documents she had received from the court.

Parker J subsequently recused herself from further involvement in the case on the grounds that she had seen the documents which, by submission of the husband, were protected by legal professional privilege. Parker J made an order for the allocation of a further hearing to another judge to determine the future conduct of the matter. This was to include determination as to the admissibility of the documents delivered by the paralegal.

What issues were considered by the court and what did it decide?

In judgment handed down on 21 June 2018, Holman J recognised that this case gave rise to a novel set of circumstances. The judge felt unable to substantively resolve the issues of admissibility at this hearing for a number of reasons including:
  • he did not have the official transcripts from the earlier hearings;
  • the documents in question were likely to require review in order to determine admissibility; and
  • the wife had not formally issued her application, such that there was no live application before him.
The judge accordingly limited himself to giving directions as to the future conduct of the matter and made a rare direction for the matter to be listed before the President of the Family Division. The judge considered that the facts and circumstances of the case required consideration at that high level.

In his judgment, Holman J made a number of interesting observations regarding the case, and the matters which will require determination by the President in due course. The judge observed that the facts of this case give rise to a novel and very serious point on what he described as ‘one of the most cardinal areas of our law’, namely legal professional privilege.

The judge recognised that the law surrounding legal professional privilege is of a complex and ever evolving nature, and that the case would require an intense consideration of the relevant authorities.

The current legal position is fairly established in circumstances where there has been an inadvertent or accidental supply to another party of privileged documents. However, this case raises the unique question as to admissibility in circumstances where there has not been a mistaken disclosure but a deliberate and considered disclosure by a member of one party’s legal team to the court, and then subsequently by the court to the opposing side.

What is the general approach to professional privilege where privileged documents are disclosed, accidentally or otherwise, to a judge?

Legal professional privilege subsists in communications between a lawyer and a client which come into existence in the course of giving or receiving legal advice.

Privilege entitles a party to withhold evidence from a third party or to the court. Once privilege is established, then a fundamental and absolute right to withhold the evidence arises. The rule is of central importance to the operation of our legal system. The right to assert legal professional privilege is generally regarded as a fundamental human right which allows clients to communicate openly and freely with their legal advisers.

It is, however, generally accepted that privilege cannot be claimed unless the evidence in question is confidential. Where there has been disclosure of privileged documents to an opponent, the starting point is that those documents are no longer confidential between them and privilege cannot be claimed. This is subject to the Civil Procedure Rules 1998 (CPR) (SI 1998/3132) 31.20 which provides that where a party inadvertently allows a privileged document to be inspected, the party who has inspected it may use it only with the permission of the court. The court has the jurisdiction to grant injunctive relief to prevent use of privileged material which has been disclosed as a result of an obvious mistake.

In Dupont Nutrition Biosciences ApS v Novozymes A/S [2013] EWHC 155 (Pat), [2013] All ER (D) 70 (Feb), the court held that privilege had been waived in a memorandum which had been disclosed to the opponent to the litigation. This was notwithstanding the disclaimer that the relevant employee was on holiday and therefore mistakes may have happened during the assessment of privilege. The court did not consider this to be an obvious mistake which justified reinstating privilege.

In the present case, it cannot be said that there is any obvious mistake. To the contrary, there has apparently been a deliberate and considered disclosure of privileged material, first by the paralegal to the court and second by the court to the wife. Furthermore, as in Dupont, the wife relied upon and used the documents in question such that it may be difficult to now reinstate privilege. Arguably, the privilege in those documents has been waived and confidence in them lost by virtue of these disclosures.

One further consideration for the President will be the apparent allegation that the disclosed documents reveal acts of wrongdoing. The law recognises an exception to the protection afforded for privileged documents known as ‘the fraud exception’. This rule establishes that communications between a lawyer and a client will not attract privilege if the purpose of the client in seeking advice is to facilitate crime or fraud.

As recognised by the judge in this case, any determination on the admissibility of the documents will require their review. If those documents do reveal a prima facie case of fraud, it is likely that the husband will not be able to assert privilege in respect of them.

What is your view on the assertion that the case involved a ‘whistle blower’? What are the potential implications of that?

Holman J recognised that on the one hand, if an employee of a firm of solicitors is able to disclose privileged information this could potentially undermine the fundamental doctrine of legal professional privilege. On the other hand, ‘fraud is fraud, and my current understanding is that legal professional privilege cannot, in the end, withstand the unravelling of fraud or similar malpractices if (I stress if) they have taken place’.

The facts of this case are unusual. If it is determined that privilege in the documents has been waived because of their deliberate disclosure and/or because the documents reveal fraudulent acts, this does further define the boundaries for privilege but arguably does not threaten the fundamental right of privilege more generally.

Sarah Bazaraa would like to thank Katie Ward, trainee solicitor at Pannone Corporate LLP, for her help with this interview.

Interviewed by Evelyn Reid.

This analysis was originally published on LexisPSL Family (subscription required). Click here to request a free 1-week trial