Determining Dominant Purpose For Litigation Privilege After ENRC

For a document to be protected by litigation privilege, it must have been produced for the sole or dominant purpose of obtaining information or advice in connection with existing or contemplated litigation. That principle and, in particular, the "dominant purpose" test was scrutinised by the Court of Appeal in its recent decision in the ENRC case: Director of the Serious Fraud Office v. Eurasian Natural Resources Corporation Ltd [2018] EWCA Civ 2006. In two decisions concerning litigation privilege since then, the courts have considered the dominant purpose test in light of ENRC: WH Holding Ltd, West Ham United Football Club Ltd v. E20 Stadium LLP [2018] EWCA Civ 2652 and Sotheby's v. Mark Weiss Limited & others [2018] EWHC 3179 (Comm). In neither case were the courts persuaded that ENRC assisted in the assessment of dominant purpose.

ENRC and dominant purpose

Litigation privilege

In ENRC, one of the issues the Court of Appeal considered was whether certain documents were protected by litigation privilege (a summary of the decision can be found here). The documents had been generated in the context of internal investigations undertaken by the company's lawyers and forensic accountants in response to allegations of corruption and fraud notified to it by a whistle-blower. The SFO investigated the company with a view to pursuing a possible criminal prosecution and successfully challenged the company's claim that the documents were subject to legal professional privilege. The company appealed.

The requirements of litigation privilege were set out by Lord Carswell in Three Rivers DC v. Governor and Company of the Bank of England (No 6)[2004] UKHL 48. This stated that:

"... communications between parties or their solicitors and third parties for the purpose of obtaining information or advice in connection with existing or contemplated litigation are privileged, but only when the following conditions are satisfied:

(a) litigation must be in progress or in contemplation;

(b) the communications must have been made for the sole or dominant purpose of conducting that litigation; and

(c) the litigation must be adversarial not investigative or inquisitorial."

Having found that litigation was reasonably in contemplation when the company initiated its internal investigation, the Court of Appeal in ENRC turned to the dominant purpose test (as set out in the second condition). The court considered two aspects of the test: first, what was encompassed by the purpose of "conducting" litigation; and second, the determination of dominant purpose where a document was created for more than one purpose.

Conducting...