Privilege In The Context Of Parallel Proceedings

The High Court has recently considered the threshold for retaining confidentiality in respect of privileged documents in the case of SL Claimants v Tesco plc; MLB Claimants v Tesco plc [2019] EWHC 3315 (Ch), a decision that will have particular implications for solicitors, accountants, other regulated professionals and their legal advisors.

There has been an increase in parallel civil and regulatory proceedings in recent years, as regulators have adopted a more proactive approach to regulation and investigations. There has been, for example, a trend of claimants increasingly making allegations of regulatory breaches or professional misconduct in the context of civil proceedings, which may trigger self-reporting obligations, or otherwise attract the attention of the regulators. Consequentially, there is a corresponding increase in the risk that documents produced or deployed in regulatory proceedings may be disclosable in civil proceedings.

The Tesco CMC decision

The underlying claim was brought by Tesco shareholders under section 90A of the Financial Services and Markets Act 2000, and alleges that Tesco made false and misleading statements in relation to its commercial income and trading profits in 2014.

As part of those proceedings, a Case Management Conference ("CMC") was held, at which the claimants sought disclosure of a privileged attendance note created by an in-house lawyer at Tesco during discussions with its external legal advisers, which had already been disclosed to the Serious Fraud Office under a limited waiver in related criminal proceedings. During the course of the criminal proceedings, the note had been referred to in open court, small extracts from the note had been read out, and the judge had privately read and then expressed consideration of a part of the note.

Although the privileged status of the note had not been in dispute in the criminal proceedings, the claimants in the civil proceedings argued that, as a consequence of the criminal proceedings, confidentiality (and thus privilege) had been lost and the attendance note in its entirety should be disclosed. However, Tesco argued that loss of confidentiality of some of the information in a document does not necessarily amount to loss of confidentiality of the whole document.

Considering the application at the CMC, Hildyard J held that confidentiality had not been lost, and confirmed that confidentiality could be lost in two ways:

Where sufficient publicity has been...