Waiver of privilege – the “transaction” and scope of waiver revisited

England and Wales

In a recent application regarding waiver of privilege during the 10-week trial of PJSC Tatneft v Bogolyubov, Kolomoisky & Ors [2020] EWHC 3225 (Comm), the court has given guidance on how to determine the scope of a waiver of privilege and the circumstances in which a reference to legal advice will result in a waiver of privilege in relation to that advice.

Background

Both parties agreed that there had been two waivers of privilege, but during the trial, a dispute emerged as to the scope of those waivers. The first waiver concerned legal advice in relation to a criminal complaint, and the second advice in relation to the liquidation of a company.

Scope of waiver

In considering the scope of the waiver, the Court reviewed the guidance provided in the recent cases of PCP Capital Partners v Barclays Bank [2020] EWHC 1393 (Comm) and R (Jet2.com) v Civil Aviation Authority [2020] EWCA Civ 35. According to these cases, the first step is to ascertain how the privileged material has been deployed, or the intended purpose of its deployment, subject to the overriding requirement of fairness. This entails considering whether the material has been referred to in order to support or advance the party’s case in some way. If privileged material has been referred to in that way, privilege will have been waived, in which case to determine the scope of the waiver, the court must identify the issue or “transaction” to which the waiver relates. All materials falling within this “transaction” must then be produced in order to avoid giving a misleading impression of it. The Court of Appeal in Jet2.com warned against falling into the trap of simply identifying the transaction as the subject matter of the disclosed document or communication.  

The court noted that the transaction was not necessarily the actual communication, but the communication set in the context of what the disclosing party was seeking to disclose. In relation to the first waiver, the purpose of the reference to the legal advice was to support Tatneft’s case as to what had been learnt through the investigation of the complaint. The court held that the “transaction”, and thus the waiver, extended to the advice and other analysis and reports related to the complaint, but not to the investigation of an earlier criminal complaint.

In relation to the second waiver, the court identified that the purpose was to rely on legal advice concerning the assignment of claims prior to the liquidation. In the light of this purpose, the scope of the waiver was all advice in relation to the assignments by the legal representatives in question, but not any advice from the same lawyers on other subject matter, nor any legal advice received from other lawyers.

Negative assertions

The court also considered whether the scope of waiver is different where a party deploys a waiver to support a negative assertion rather than a positive one. In this case, the applicant had asserted that the respondent must have discussed a particular matter with its lawyers, and the respondent denied that this was the case. The court held that this denial did not amount to a waiver of privilege in the actual discussions with the lawyers. The court identified a distinction between (i) reliance on legal advice where a party has chosen to put forward a case in reliance on that advice, whether that case involves a positive or negative assertion, and (ii) a situation where the assertion is a denial of a case advanced by the other party. The court held that a waiver of privilege may occur in scenario (i), given the right circumstances, but will not typically occur in scenario (ii).

Comment

This judgment illustrates the importance of carefully considering the purpose of any intended waiver of  legal professional privilege in order to understand the scope of any further collateral waiver that may be implied. Only once this is understood can a proper cost-benefit analysis be carried out in relation to the proposed waiver.

For further information, please email the authors or your usual CMS contact.