Iniquity Exception To Privilege Does Not Apply Just Because Defendant To Fraud Claim Lies To Their Solicitors And The Court

• Published date: 17 February 2022
• Law Firm: Herbert Smith Freehills
• Author: Ms Anna Pertoldi, Maura McIntosh and Jan O'Neill

A recent High Court decision acts as a reminder that parties will not necessarily be prevented from maintaining privilege in all cases where it is found that they have made false statements to their solicitors and the court: Candey Ltd v Bosheh [2021] EWHC 3409 (Comm).

It is well established that privilege will not protect communications made in furtherance of a crime, fraud or equivalent conduct. This is often referred to as the "iniquity exception". Its precise boundaries are not always clear, however, particularly where a client puts forward what is later found to be an untrue case. The present decision illustrates that privilege will not necessarily be lost in such circumstances, even where the client has deceived their solicitors and the court (as alleged in the present case, though the allegations were contested).

To lose the protection of privilege, there must be an abuse of the solicitor / client relationship to such an extent that it takes the matter outside the normal scope of a professional engagement (see for example JSC BTA Bank v Ablyazov [2014] EWHC 2788, considered here). This is obviously not a bright-line test, and leaves the potential for some blurring around the edges. In the present case, however, the court held that it was clear that the test was not met.

The decision also shows that a party who has received another party's confidential material in circumstances where it had no right to do so may be denied permission to retain and rely on it, even if it may ultimately be entitled to disclosure of the material in the course of the proceedings.

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