The Director Of The Serious Fraud Office v Eurasian Natural Resources Corporation Ltd

On 5 September 2018, the Court of Appeal handed down its judgment1 in the appeal from the decision of the High Court in The Director of the Serious Fraud Office v Eurasian Natural Resources Corporation Ltd [2017] EWHC 1017 (QB) ("the Judgment").

The Court of Appeal has found in favour of the ENRC ("the Appellant"), holding that the High Court erred both in law and in its interpretation of the factual evidence in respect of its determination as to whether Litigation Privilege could be claimed. The Court of Appeal also affirmed the prevailing view as to the narrow scope and application of Legal Advice Privilege set out in the Three Rivers (No. 5) authority (that the definition of 'client' is limited to those in a corporate entity authorised to seek and receive legal advice). However, the Court of Appeal did indicate that "had it been open to them" they would have departed from this narrow view and adopted a wider definition of client. Reluctantly, the Court of Appeal indicated that this issue would ultimately have to be considered by the Supreme Court and that the narrow definition of client continues to prevail.

The Judgment provides useful guidance as to the scope and application of Legal Professional Privilege in the context of internal investigations (in both a criminal and civil context) and, in particular, provides helpful clarity on when adversarial proceedings are in "contemplation" and the "dominant purpose" test in the context of Litigation Privilege.

1. First instance judgment of the High Court

   On 8 May 2017, the High Court rejected ENRC's claims to Legal Professional Privilege in relation to three of the four categories of the documents (the "High Court Judgment"), namely copies of investigation interview notes produced by ENRC's external counsel and materials and reports generated by forensic accountants appointed to conduct a books and records review (the "Documents"). Specifically, it held that ENRC failed to satisfy two of the three critical elements comprising the test for Litigation Privilege, as set out in Three Rivers District Council v Governor & Company of the Bank of England (No. 6) ("Three Rivers (No. 6)"). This test provides that Litigation Privilege only applies where:2

   litigation is in progress or is in contemplation; the relevant communication was made for the sole or dominant purpose of conducting that litigation; and the litigation is adversarial, and not investigative or inquisitorial. The High Court determined that criminal legal proceedings against ENRC (its subsidiaries or their employees) were not reasonably in contemplation at any material time prior to the creation of the Documents. In any event, the High Court further found that three of the four categories of the Documents were not created for the dominant purpose of litigation as the information contained in the Documents was not produced to form part of a defence brief. Andrews J drew a distinction between the avoidance of a criminal investigation and the conduct of a defence to a criminal...