Emails between in-house lawyer and employee held not to be privileged: Three Rivers continues to flow

United Kingdom

In the recent case of Glaxo Wellcome UK Ltd (t/a Allen & Hanburys) and Glaxo Group Ltd v Sandoz Ltd & 6 Ors [2018] EWHC 2747 (Ch), the claimants successfully challenged the defendants' claim to legal advice privilege in respect of an email exchange between an in-house lawyer and an employee. The defendants were, however, granted relief under CPR 31.20 to prevent the use of another document, subject to litigation privilege, that had been disclosed in error.

Background

The case arises out of a claim by companies in the Glaxo group ("Glaxo") against Sandoz for the alleged “passing off” of asthma inhalers similar to Glaxo’s "Seratide Accuhaler" inhalers. The parties agreed that documents relating to the design history of the inhaler were relevant and therefore had to be disclosed.

However, the defendants claimed legal advice privilege in relation to:

  1. an internal email from an in-house lawyer requesting information to send to external lawyers; and
  2. an internal email from the employee providing the requested information.

The defendants also asserted that a document created by an employee setting out her recollections in relation to the design process had been inadvertently disclosed and was subject to litigation privilege. They applied under CPR 31.20 to prevent the claimants from using this document.

Internal emails between in-house lawyer and employee

The onus of proving entitlement to legal advice privilege lies on the party claiming it (West London Pipeline and Storage Ltd v Total UK Ltd [2008] EWHC 1729 (Comm)).  The High Court therefore assessed whether the defendants had discharged that burden.  The court held that the defendants had not done so. The defendants had failed to:

  1. identify the person to whom the allegedly privileged emails had been sent or the person who had replied;
  2. specify which company or companies claimed the privilege; and
  3. identify the members of staff who were authorised to request and receive legal advice.

As the defendants had not demonstrated that the emails were sent for the purposes of the in-house lawyer giving legal advice to the employee, the court held that the emails were not privileged. The court considered that the emails were more likely to have been part of the in-house lawyer's information-gathering in order to obtain legal advice from external lawyers. Such communications did not attract legal advice privilege as they were not communications between "the client" and "the lawyer" for the purposes of giving or receiving legal advice.

Although communications between an employee and the company's lawyers could attract legal advice privilege if that employee had been tasked with seeking and receiving such advice on behalf of the client (Director of the Serious Fraud Office v Eurasian Natural Resources Corp Ltd [2018] EWCA Civ 2006), that was not relevant in this case, as that was not the purpose of these particular communications.

Mistaken disclosure of privileged document

To qualify for relief under CPR 31.20, an applicant has to establish that:

  1. the disclosed document was privileged;
  2. the document was provided for inspection by mistake; and
  3. the mistake was so obvious that the solicitor reviewing it ought to have appreciated that before making use of the document (Al-Fayed v Commissioner of Police of the Metropolis (No.1) [2002] EWCA Civ 780).

Relief is awarded at the Court's discretion, taking into account all circumstances of the case.

The court held that, from the form and content of the document, it should have been obvious that it was privileged and had been disclosed by mistake. In that regard, the court noted that "[e]ven a solicitor with limited experience would immediately question why it had been provided for inspection". It was clear that the document had been compiled as part of an evidence-gathering exercise: the document was an account of historic events, providing an explanation for decision-making that went to the heart of the case. As litigation was either in contemplation or had been commenced by the time the document was prepared, it was likely to be covered by litigation privilege. The court therefore ordered that steps be taken to delete all copies of the document from the claimants' records and redact any references to it in the court file.

Comment

This case demonstrates the problems faced by corporate entities as a result of the decisions in Three Rivers (No 5) [2003] EWCA Civ 474 ("Three Rivers") and, more recently, SFO v ENRC [2018] EWCA Civ 2006 ("ENRC") to situations where only legal advice privilege can be claimed.

Outside of a litigation setting, the above cases have made clear that the narrow definition of "the client" set out in Three Rivers will continue to apply with the result that internal communications within a large organisation (e.g. between employees for the purposes of evidence gathering so that information can be passed to lawyers to provide legal advice) will almost certainly fall outside legal advice privilege since such communications are not between "the client" and "the lawyer" for the purposes of giving or receiving legal advice. Care should therefore be taken in this context as any such communications could be discloseable in future litigation.

The only circumstances in which such evidence-gathering communications are likely to attract privilege is if litigation privilege can be said to apply. Accordingly, careful thought should be given prior to commencing such an exercise as to whether litigation privilege is likely to apply. The recent Court of Appeal decision in ENRC suggests that the courts may be willing to take a more generous approach to determining when litigation is in "reasonable contemplation". 

The case also emphasises the requirement for parties, when responding to a challenge regarding privilege, to put in detailed evidence to satisfy the court that privilege can be claimed. For example, a party should be prepared to identify the individual senders and recipients of documents over which privilege is claimed in the event that privilege is challenged and, in the case of group companies, should consider which specific company holds the right to claim privilege.