We would like to ensure that you are still receiving content that you find useful – please confirm that you would like to continue to receive ILO newsletters.
08 January 2019
Dispute and litigation privilege
Court of Appeal decision
Where do things stand?
What does this mean for clients?
Clients who believe that their internal confidential discussions to settle a case will always remain within their company's four walls are in for a shock. The Court of Appeal has found that communications discussing a commercial proposal to settle an existing dispute are not privileged and are therefore subject to scrutiny by the court. The court made this finding in the case of West Ham United Football Club Limited v E20 Stadium LLP.(1)
West Ham and E20 were in dispute over the number of seats in the London Olympic stadium that West Ham were entitled to use. E20 board members exchanged emails about settling the matter on 30 January 2017. During a pre-trial application, E20 claimed litigation privilege in respect of the emails on the basis that they had been created "with the dominant purpose of discussing a commercial settlement of the dispute" at a time when litigation was in contemplation.
The judge at first instance found that the emails had the protection of litigation privilege on the basis that discussions with the dominant purpose of formulating and proposing the settlement of litigation that is in reasonable contemplation or in existence are protected by litigation privilege.(2) The application found its way to the Court of Appeal.
The Court of Appeal's starting point was the House of Lords decision in Three Rivers DC v Governor and Company of the Bank of England (No 6).(3) For litigation privilege to apply to communications they must pass between the parties or their solicitors and third parties for the purpose of obtaining information or advice in connection with existing or contemplated litigation.
The emails discussing the proposed commercial settlement were not created for the dominant purpose of obtaining information or advice, in the sense that information was not being solicited for the purposes of the litigation and no legal advice was being sought. As such, the claim for litigation privilege failed at the first hurdle. Crucially, the court dismissed an argument by E20 that there was privilege for internal communications within a corporate body; there is no separate head of privilege for those communications.
The court was at pains to emphasise that privilege is an inroad into the principle that a court should be able to decide disputes with the aid of all relevant material. As such, it did not consider it justified to extend (as it saw it) the scope of litigation privilege to purely commercial discussions which did not fall into the recognised categories of advice or information going to the merits of the contemplated litigation.
However, it is difficult to follow the court's analysis and its (over)emphasis on the Three Rivers requirement for the communication to be seeking or giving information or advice. Although it is unclear what the documents said, it seems likely that they were sent to elicit, expressly or implicitly, the views of E20's board members on the settlement proposals. Why those views were not – or could not be – information sought for the dominant purpose of settling the litigation is unclear.
The decision is not being appealed to the Supreme Court so, for now, those engaged in litigation should take care:
For further information on this topic please contact Suzan Kurdi or Davina Given at RPC by telephone (+44 20 3060 6000) or email (firstname.lastname@example.org or email@example.com). The RPC website can be accessed at www.rpc.co.uk.
The materials contained on this website are for general information purposes only and are subject to the disclaimer.
ILO is a premium online legal update service for major companies and law firms worldwide. In-house corporate counsel and other users of legal services, as well as law firm partners, qualify for a free subscription.