The Scope of Litigation Privilege – Settlement

Case Update – WH Holding Ltd and another company v E20 Stadium LLP [2018] EWCA Civ 2652, [2018] All ER (D) 17 (Dec)

In October 2018, we considered the Court of Appeal case SFO v Eurasian Natural Resources Corporation Limited [2018] EWCA Civ 2006) concerning litigation privilege and whether internal investigations can attract litigation privilege. The Court of Appeal was again asked a similar question in the context of commercial proposals for the purposes of settlement in WH Holding Ltd v E20 Stadium LLP.

In brief, there are two categories of Litigation Professional Privilege (“LPP”):

• Legal advice privilege – confidential communications between a client and a lawyer where the client seeks or the lawyer provides legal advice.

• Litigation Privilege – confidential communications between a client, lawyer or third party where the dominant purpose of the communication is for use in actual, pending or contemplated litigation.

Facts of the case

The dispute concerned the number of seats in a stadium that WH Holding Ltd (West Ham) were allowed to use at West Ham Football Club. During proceeding, West Ham applied for an order allowing it to view a sample of redacted documents, which included documents shared between board members and stakeholders (the “Documents”). E20 contended that the Documents had been created for the purposes of discussing a commercial proposal for settlement between the parties and that it was at a time when litigation was in reasonable contemplation.

At first instance, the court dismissed the majority of the application. West Ham appealed.

Decision of the Court of Appeal

The Court of Appeal held that the ground on which privilege was claimed for the Documents was that they had been created with the dominant purpose of discussing a commercial settlement of the dispute when litigation with West Ham had been in contemplation. The Court decided that a claim in those terms did not fall within the scope of litigation privilege on the basis that they neither sought legal advice or information for the purpose of conducting litigation nor revealed the nature of such advice or information. There was no authority or justification to extend the scope of litigation privilege to purely commercial discussions.

The Impact

Each case will turn on its own facts however the case is stark reminder for businesses to carefully consider that evidence addressing commercial discussions, even in the context of settlement proposals, is no longer shielded by the cloak of litigation privilege. It is also likely to change the approach solicitors may adopt on disclosure (increasing the evidence available to the Court) and/or adopting a broad brush approach asserting litigation privilege.

If in doubt, always seek early advice.

For more information/details on Litigation Privilege see our top-tips for In-House Lawyers – (https://www.hcrlaw.com/blog/litigation-privilege-in-internal-investigations-update-and-tips-for-in-house-lawyers/).