Legal Professional Privilege Update

The decision of the UK's Serious Fraud Office not to appeal the English Court of Appeal's judgment in The Director of the SFO v ENRC Ltd [2018] EWCA Civ 2006 (Industry Insights, October 2018 – "Litigation Privilege Update") was as predictable as the outcome in the appeal. There should be little mystery to the SFO's decision. An attempt to overturn the Court of Appeal's principal ruling on the ambit of litigation privilege was almost certainly doomed to failure and one assumes the SFO's newly ensconced Director knew it.

The SFO might have suspected that the game was up when the Law Society of England & Wales was allowed to intervene in the proceedings before the Court of Appeal. The decision to intervene will not have been taken lightly and was a decision as befits any representative body given the circumstances.

As some readers may recall, the Court of Appeal's judgment, while well-received in the market and in the common law world, in fact, did little more than restore litigation privilege to its traditional roots. Before the judgment, some first instance courts in England appear to have failed to grasp the traditional ambit of litigation privilege which had survived for generations and which is not subject to any competing policy.

The Court of Appeal's judgment is as apt as it is timely; litigation privilege is a fundamental right for all individuals and corporates and, more so, given (for example) the increased threat of adversarial proceedings arising out of regulatory investigations (whether in the UK or in other common law jurisdictions, including Hong Kong).

Insofar as the other head of legal professional privilege is concerned (namely, legal advice privilege), there were some murmurings of discontent in the market that neither party adopted the Court of Appeal's apparent enthusiasm for an appeal of the Three Rivers (No. 5) narrow meaning of "client" in a corporate context. However, that issue was obiter before the Court of Appeal.

Furthermore, for the SFO's part, it is presumably not in the business of developing case law that would almost certainly have led to the UK Supreme Court (UKSC) overturning what remains of Three Rivers (No.5) and, in doing so, further benefitting respondents in regulatory investigations. The long overdue formal death sentence for Three Rivers (No.5) has been suspended (for now). This is of little consequence to Hong Kong, which applies a wide and purposive "dominant purpose" controlling test to legal advice privilege (to the envy, for now, of the English common law).

Without encouraging complacency, common law privileges are generally in good shape in Hong Kong (Industry Insights, May 2017 – "Hong Kong as a benchmark for privileges and immunities")* – at a time when the city attracts infrastructure and disputes work from the Belt & Road and Greater Bay Area and European and UK investors look east (as they see the world) in light of their own local difficulties.

As previously noted in these Industry Insights, it is only a matter of time before the full ambit of legal advice privilege is tested before the UKSC (further to Three Rivers (No. 6)). If needs be and when that time comes, the Court of Final Appeal in Hong Kong might, perhaps, lend one or more of its permanent judges to the UKSC (or, for that matter, the US Supreme Court) – a sort of common law "judicial exchange programme" (particularly, "post-Brexit") or an example of common law reciprocity, further to Articles 82 and 92 of the Basic Law of Hong Kong SAR. In the same way as the city attracts international legal talent, so it should export it.

Editorial Note*: One common law privilege to keep careful watch over is the privilege against self-incrimination (for more, for example, see: "Documentary Evidence in Hong Kong", 19–001, Charles Hollander QC).

Jurisdictions: 

Senior Consultant, RPC