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UPDATE: Director of the Serious Fraud Office v Eurasian Natural Resources Corporation [2018] EWCA Ci

The Court of Appeal has allowed Eurasian Natural Resources Corporation's (ENRC) appeal against a highly controversial earlier Commercial Court decision that had threatened to significantly narrow the scope of legal professional privilege.

The judgment, delivered on 5 September 2018 by the President of the Queen's Bench Division Sir Brian Leveson, Chancellor of the High Court Sir Geoffrey Vos and Lord Justice McCombe, held that documents prepared during internal and regulatory investigations such as witness interview notes taken by external lawyers, reports from external forensic accountant and certain external correspondence would be covered by legal professional privilege.


The three critical elements comprising the test for litigation privilege, as set out in Three Rivers District Council v Governor & Company of the Bank of England (No. 6), are that it only applies where:

(a) litigation is in progress or is in contemplation;

(b) the relevant communication was made for the sole or dominant purpose of conducting that litigation; and

(c) the litigation is adversarial, and not investigative or inquisitorial.

We reported on Andrews J’s High court ruling last year that an investigation by the SFO did not amount to 'adversarial litigation'. Rather, it was viewed as merely the first stage in assessing whether further steps would be taken and so litigation could not have been in reasonable contemplation. Therefore, the lawyers could not rely on litigation privilege to protect the relevant documents. Legal advice privilege was similarly not made out because, following Three Rivers No. 5, the relevant documents were found not to record communications between lawyers and clients. ‘Client’ was interpreted restrictively by the court, limited to those in a corporate entity authorised to seek and receive legal advice (rather than including communications between solicitors and employees of the client who do not fall under that description).

This decision was seen as controversial and threatened to limit the scope of legal professional privilege in criminal investigations.


  1. Litigation privilege

The Appellate court found that three categories of documents which were subject to the appeal – interview notes, material associated with a review by forensic accountants, and certain correspondence materials – all had the benefit of litigation privilege. The court made it clear that they considered that the dominant purpose for the creation of these documents was the resisting or avoiding the SFO proceedings.

Had the Commercial Court's decision been upheld, there would have been serious concern that businesses could no longer receive advice in relation to internal and regulatory investigations safe in the knowledge that such advice would be legally privileged. The Court of Appeal's judgment confirms that corporations are able and are in fact encouraged to carry out internal investigations, which it sees as being in the public interest, in the knowledge that (subject to the requirements set out in the judgment), documents produced as a result of those investigations will be protected from disclosure.

The Commercial court ruling had sparked such controversy that the Law Society had intervened in the appeal brought by ENRC. The Court of appeal in its judgment has recognised that the ability of a client to consult with, and obtain advice from, its lawyers, safe in the knowledge that those communications will not be disclosed, is a fundamental principle of our justice system.

2. Legal advice privilege

The Court of Appeal did not deem it necessary to decide whether advice privilege was present, since litigation privilege was already made out. The Three Rivers model of advice privilege uses a restrictive definition of ‘client’, limited to those in a corporate entity authorised to seek and receive legal advice. The Court argued that confining privileged communication in such a way may have worked in most 19th century cases, where the client was an individual or a small board/corporation, but in the modern world this model does not cater for larger national and multinational corporations. In these cases, the information upon which legal advice is sought is unlikely to be in the hands of the main board or those it appoints to seek and receive legal advice. The example was given:

“If a multi-national corporation cannot ask its lawyers to obtain the information it needs to advise that corporation from the corporation’s employees with relevant first-hand knowledge under the protection of legal advice privilege, that corporation will be in a less advantageous position than a smaller entity seeking such advice.” [127]

Sir Brian Leveson, giving the leading judgment, suggested that a better approach would be to follow the ‘dominant purpose’ test as shown in Citic Pacific Ltd v. Secretary for Justice [2016] 1 HKC 157, rather than focusing on a narrow definition of ‘client’. The Court of Appeal noted that the English law is ‘out of step’ with the international common law on this issue [129].

Despite taking this view, the Court of Appeal stated that such a question could only be properly determined by the Supreme Court, since “it would be highly undesirable for us to enter into an unseemly disagreement which can be overturned only by the Supreme Court” [59].


The Court of Appeal’s decision is welcomed by both lawyers and corporations. Although it does not resolve the issue around the meaning of ‘client’ from Three Rivers No. 5, it is highly persuasive authority supporting the notion that advice regarding internal and regulatory investigations will be covered by litigation privilege. This supports a culture of corporations self-reporting and investigating issues of malpractice. The decision came sooner than expected, a sign of the importance the legal profession attached to the issue. The Law Society, which had intervened in the appeal, described the appeal as a significant benefit to clients and in-house lawyers: “If the High Court ruling had been upheld, any organisation facing a prosecution – not just multinationals, but charities, newspapers, small businesses or local authorities – could have to turn over private communications with their lawyers.”

UPDATE: the SFO said on 3 October 2018 that it will not be pursuing an appeal.

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