U.K. Court of Appeal Upholds Assertion of Litigation Privilege
Last week, the U.K. Court of Appeal ruled in Director of the Serious Fraud Office v. Eurasian Natural Resources Corp. that documents prepared by counsel in the course of a corporate internal investigation were protected by the “Litigation Privilege,” the U.K.’s analog to the American work-product doctrine. The Serious Fraud Office (SFO) sought to compel disclosure of the documents as part of its criminal investigation, and Eurasian Natural Resources Corp. (ENRC) asserted the Litigation Privilege.
The lower court held that the Litigation Privilege did not apply for two reasons. First, the lower court determined that ENRC did not reasonably contemplate criminal proceedings. At the time it began the internal investigation, the lower court reasoned, ENRC was unsure whether its investigation would uncover actual criminal wrongdoing. Second, the lower court concluded that none of the documents was created for the dominant purpose of resisting contemplated criminal proceedings.
The Court of Appeal reversed. It held that the corporation did, in fact, reasonably contemplate criminal proceedings at the time of its internal investigation. The SFO had made clear to the company that criminal prosecution was a possibility, and ENRC instituted the internal investigation in response. Uncertainty over what the investigation would reveal was irrelevant, particularly in the context of corporate criminal wrongdoing. The Court of Appeal also concluded that the documents were prepared for the dominant purpose of resisting those criminal proceedings. Documents prepared to avoid, head-off, or settle a reasonably contemplated proceeding, the court explained, have been prepared for the purpose of resisting or defending against those proceedings. Thus, the Court of Appeal concluded that the documents were protected by the Litigation Privilege.
The decision is significant not only in the U.K., but in the U.S. as well. Because the U.K. Litigation Privilege protects largely the same types of documents and information protected by the U.S. work-product doctrine, compelled disclosure of such information could have resulted in waiver of work-product protection in the U.S. As MoloLamken explained in a motion seeking leave to intervene filed on behalf of the NACDL, that risk was not merely theoretical. In recent years, the SFO and the Department of Justice have frequently collaborated in investigating companies that operate both in the United States and in Europe. The Court of Appeal’s decision to uphold the assertion of Litigation Privilege therefore not only strengthened the U.K. Litigation Privilege; it also strengthened a corporation’s ability to preserve U.S. work-product protections when embroiled in a cross-border investigation.