High Court Rules Against The Use Of Privileged Documents By Trustees In Bankruptcy

The court has no jurisdiction to direct a bankrupt to waive privilege in any document, the High Court has ruled (Leeds v Lemos [2017] EWHC 1825 (Ch)).

The High Court also confirmed that legal professional privilege is not the property of a bankrupt for the purposes of the Insolvency Act 1986 and does not automatically pass to their trustee. The Court of Appeal's recent judgment in Avonwick v Shlosberg [2017] EWCA Civ 1138 was considered and applied.

Insolvency Practitioners will need to be aware of their obligations to identify and preserve privilege in documents that come into their hands during the course of a bankruptcy. There are clear limits on how and when such documents can be used without the bankrupt's express consent.

Background

A bankruptcy order was made against Christos Lemos on 11 March 2015. Mr Lemos' trustees in bankruptcy then obtained documents from his former solicitors. These documents may have been subject to legal professional privilege belonging to Mr Lemos on his own or jointly with his wife.

Put very simply, privilege is a right to withhold disclosure of a document or other evidence. It may arise in a number of circumstances, including in the context of communication between a lawyer and their client or (in some cases) a third party. Where it arises, legal professional privilege belongs to the client.

The Trustees believed that these potentially privileged documents would be...