Joint retainers: successors in title entitled to the same legal privilege rights as their predecessor

England and Wales

The Court of Appeal applied the legal principles of joint retainer privilege and upheld the High Court order for the disclosure of documents to the insured’s successor in title. The case concerned a joint retainer of solicitors between an insured and insurer. The insurer had opposed the disclosure, arguing that the successor in title was in reality a third party and therefore not entitled to the documents. The court disagreed and dismissed the appeal.

Background

A group litigation order was made by hundreds of claimants affected by defective silicone breast implants carried out by Transform, a leading UK cosmetic surgery. The solicitors acting for Transform in defending the litigation were appointed under a joint retainer by Transform and their liability insurer. Transform also retained the solicitors in relation to the uninsured claims. 

Transform settled the insured claims and went into administration, being unable to meet the uninsured claims or pay costs. Although summary judgment was obtained against Transform in respect of the uninsured claims, the claimants did not receive any damages.

Hugh James, the claimants’ solicitors in the group litigation, had acted under a CFA arrangement and were unable to recover a large amount of ‘common’ costs for which the insurer was not liable and Transform could not pay.

Hugh James subsequently obtained an assignment from Transform’s administrators of potential professional negligence claims against the solicitors and counsel who had acted for Transform and the liability insurer in the original litigation. When Hugh James sought disclosure of the joint retainer files, the insurer objected.

The question of whether the joint retainer files should be disclosed to Hugh James was ordered to be tried as a preliminary issue. At first instance, the judge ordered disclosure. The Court of Appeal has upheld that decision.

Decision

Lord Justice Coulson stated inter alia that:

  • Successors in title “stand in the shoes” of their predecessor.  

  • In this case, the joint legal privilege enjoyed by the insured passed to its successor in title, irrespective of the circumstances leading to the assignment. 

  • Legal professional privilege is a fundamental right of each party to a joint retainer of solicitors. One party cannot assert privilege against the other.  Privilege can only be waived jointly, not unilaterally.

Hugh James were entitled to disclosure of the joint retainer files as they were the successors in title to Transform in respect of potential claims against the legal team in the original litigation. Transform had had a clear right to see documents covered by the joint retainer privilege (as they were one of the joint clients) and it followed that their successors in title had the same right.

Although Hugh James were on the other side in long-running litigation and would now see privileged documents (which would be subject to strict confidentiality safeguards) no question of conflict of interest could override their right as successor in title to disclosure of documents on the joint retainer files.

Comment

This is an unusual case in which the courts have applied the principles of joint retainer privilege between an insured and insurer. Insurers should take note that they may be unable to prevent disclosure of documents to a hostile party in similar circumstances.

Further reading: Travelers Insurance Company Ltd v Armstrong and Others [2021] EWCA Civ 978