Privilege Update - What Happens When Legally Privileged Documents End Up In The Wrong Hands

Legal professional privilege seems to be a hot topic at the moment. This privilege is a powerful right once established as it permits a person to withhold information and documents not only from production to the courts but also to investigating authorities. It enables clients and their lawyers to have free and frank recorded exchanges and has been described as one of the cornerstones of the UK's legal system. Loss of its protection is therefore something to be avoided. Three cases have been decided recently that examine different aspects of the same dilemma – what happens when privileged documents end up in the wrong hands?

R (on the application of Stewart Ford) (Claimant) v Financial Services Authority (Defendant) & (1) Peter Johnson (2) Mark Owen (Interested Parties) [2011] EWHC 2583 (Admin) Bailii

The key issue in this case was whether the investigating regulatory body, the FSA, was entitled to use privileged emails passing between the named company client and its lawyers against the former directors of the company. The FSA had had its own nominated administrators appointed to control the company and the company had thereafter waived privilege.

The claimant, the company's former CEO, together with a fellow former director and the former compliance officer (the interested parties), asserted that a number of emails contained legal advice directed to them personally, as well as to their company. The company, by its FSA nominated administrators, had waived privilege in the emails and provided copies of them to the FSA, which has then sought to use the contents in regulatory disciplinary proceedings against both the company and the officers.

On the claimant's application for judicial review, the judge held that, viewed objectively, the evidence showed that although the company's law firm at the time was formally retained to advise only the company in relation to the FSA enforcement investigation of the company, it had extended its role to advising the individual officers of the company on their personal risk of FSA enforcement investigation as individuals and any consequent regulatory action. This advice had been recorded in emails to the individual officers.

The judge ruled that in a situation where there was no formal joint retainer, an individual could claim joint legal professional privilege with others if he could show that the legal advice had been sought by him in his individual capacity, that he had made his capacity clear to the...