It’s always been assumed that internal communications within a corporate body would be covered by freestanding privilege. But that’s no longer the case.
A decision by the Court of Appeal in WH Holding Ltd and another company v E20 Stadium LLP has significant implications for commercial claims, particularly ones where board minutes or other internal communications are key to the issues being disputed.
The case concerned West Ham FC and its landlord, E20, and the number of seats that the football club was entitled to use in its stadium, the London Olympic Stadium.
In January 2017, E20 announced that, despite the stadium having more capacity than expected and contrary to previous indications, West Ham wouldn’t be allowed to use any more seats.
In the lead-up to their announcement, E20’s board members held meetings, and exchanged emails, about the number of seats available, and discussed a commercial proposal for the settlement of the dispute with the football club. The emails and minutes from the meetings were either heavily edited or not disclosed to West Ham.
E20 claimed that these communications were protected by litigation privilege as they were connected to the conduct of the litigation. West Ham, on the other hand, applied to the High Court for their disclosure.
A privileged decision
The High Court agreed with E20 that the Court of Appeal in a previous case (Director of the Serious Fraud Office v Eurasian Natural Resources Corporate Ltd (2018), had extended the scope of litigation privilege. It said that it should include communications about the conduct of litigation, and that this would include efforts to avoid or settle litigation.
In the case of E20 and West Ham, the Court of Appeal disagreed. It said that the documents didn’t fall within the scope of litigation privilege: “… [we] cannot see any justification for covering all internal corporate communications with a blanket of litigation privilege. Quite apart from anything else we do not see why corporations should have greater protection than, say, partners or bodies of trustees who in practice are equally likely to discuss matters among themselves…”
What does this mean for you?
The key is that litigation privilege only applies if the purpose of the communication is to obtain information or provide advice on the dispute.
It’s not sufficient for a business to say that its communications were simply about the conduct of the litigation. This point had previously been unclear from the case law.
If the communications contain information or advice already obtained for the conduct of the litigation then the court said that they “cannot be disentangled” and will still be covered by litigation privilege. That said, this case could cause real practical difficulties with identifying the application of litigation privilege.
It serves as a reminder that businesses should think carefully before creating any documents which contain discussions about a claim or dispute. If in doubt, businesses should consult their lawyers about what will and won’t be privileged before putting anything in writing.
If you’d like more information on the implications of this decision on your business, please contact our litigation team on +44 (0)370 1500 100.
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