High Court: no privilege without proper explanation

In Astex Therapeutics Limited (‘Astex’) v AstraZeneca AB (‘AZ’) [2016] EWHC 2759 (Ch), the High Court ordered AZ to provide further evidence in order to substantiate its claim to privilege over various documents withheld from disclosure. Specifically, the Court ordered that a ‘proper officer’ of AZ support and explain its claim to privilege in a further witness statement, as the disclosure statement and witness statement previously provided by AZ’s legal advisors were deemed insufficient to establish privilege.

The facts

Astex and AZ entered into a collaboration agreement in February 2003 to research novel chemical leads for the treatment of Alzheimer’s disease. The aim of the collaboration was to produce candidate drugs for further development. The issue in the substantive claim was whether certain drugs were ‘candidate drugs’ under the collaboration agreement.

For a period, there was a common assumption by both parties that two drugs (CD1 and CD2) were candidate drugs. However in February 2015, AZ undertook an internal review and adopted a different approach. Astex was subsequently informed that the review had taken place, and that AZ no longer considered CD1 or CD2 to be within the scope of the collaboration agreement.

Disclosure

Astex sought disclosure of documents relating to AZ’s internal review. AZ claimed legal advice privilege over communications between AZ and its external legal advisors, and between its in-house counsel and its employees. AZ also claimed legal advice privilege and litigation privilege with respect to attendance notes of meetings and conversations with present and former employees. These claims to privilege were disputed by Astex on a range of grounds including a lack of specificity and a misconception of legal advice privilege.

In claiming privilege, AZ made the following statement in its list of documents:

“Part B: The Defendant has control of the documents numbered and listed below, but objects to the Claimant inspecting them because they are by their nature privileged from production.
Confidential letters and other communications passing between the Defendant and its legal advisors and patent attorneys for the purposes of giving or obtaining legal advice and assistance, together with drafts and internal memoranda and notes thereof prepared for the purposes of giving or obtaining legal advice, and any other documents which are by their nature privileged and excluded from inspection." [emphasis added]

Astex objected to the form of the disclosure statement, and claim for privilege, and requested a list of all documents over which such claims were made. AZ responded that it had “used standard wording to address privileged documents”, noting that similar wording had been used by Astex in its own disclosure statement.

AZ also asserted that Astex was not entitled to go behind a specific assurance that privilege had been carefully considered and properly claimed. However, the Court found that this was a case, exceptionally, in which further evidence of the claim to privilege was essential.

Comment

Orders for evidence to justify claims to privilege are relatively rare in English proceedings. This case therefore provides some helpful guidance on the point, both to parties contemplating a challenge to a claim for privilege, and to parties resisting such challenges. In his judgment, Chief Master Marsh stated that:

• The Court has power, in appropriate cases, to make an order requiring a party claiming privilege to explain in sufficient detail the basis upon which that claim has been advanced. However, such orders are not routine, and there must be a firm evidential basis justifying it;
• The Court should be astute to avoid making an order which would require a level of detail that risks rendering the privilege valueless;
• The Court must also be careful to avoid encouraging purely tactical applications, designed to harass the opponent;
• Although it is not right to say that self-certification of a claim for privilege cannot be challenged, the court will ordinarily take such assertions, made in good faith, and based on what appears to be a careful review of the documents, into account;
• Although it may have been conventional at one time to state that documents are “by their nature privileged”, the Court said that such a statement has “no place in modern litigation, let alone litigation of very real complexity”;
• In this case, the Court considered that AZ’s approach to claiming privilege had been unsatisfactory, attempts to provide clarity had not been successful and the basis for claims to legal advice privilege and litigation privilege were either not made out or found to be incorrect. Lastly, the volume of documents over which privilege was claimed was not so large to make the proposed order disproportionate. In the circumstances, the order sought was warranted.