Clarification as to the scope of litigation privilege

13/05/22

Can a party claim litigation privilege in respect of lawyer/client communications in the course of litigation - or are those communications covered only by legal advice privilege? This question would ordinarily be academic - since those communications would on any view be covered by legal advice privilege.

But the question became a live one in the Loreley 30 v Credit Suisse litigation. Loreley is bringing a claim for $100 million against Credit Suisse in respect of a sale of a CDO linked to mortgage-backed securities. Credit Suisse is running a limitation defence. One strand of that defence involves asking whether the knowledge of Loreley’s creditor (a German bank, KfW) is attributable to Loreley for limitation purposes. In support of its argument on attribution, Credit Suisse wanted to find out whether KfW is authorised to give instructions to Loreley’s solicitors in relation to the litigation.

The dispute centred around whether the identity of the persons who are authorised to give instructions to solicitors on behalf of a corporate client in the course of ongoing litigation is privileged. Loreley’s position is that this is subject to litigation privilege. Part of Credit Suisse’s answer was that litigation privilege can never apply to lawyer/client communications – which are subject to legal advice privilege alone (on which Loreley was not relying).

In a judgment handed down today, Mr Justice Robin Knowles accepted Loreley’s argument that lawyer/client communications may be protected both by litigation privilege and legal advice privilege; the categories are not mutually exclusive. This is a welcome clarification of the position on a question which has divided commentators (Thanki on Privilege, for example, taking the contrary view). The Judge went on to hold that the identity of the persons who are authorised to give instructions in the course of ongoing litigation is a question that will require a decision on the facts of the particular case. The Judge held that, in the circumstances of this case, litigation privilege did not apply. The Judge granted permission to appeal.

The judgment is here.