UK: Inadvertent Disclosure Of Privileged Documents

One party inadvertently sends to the other side in litigation a privileged document. What should they (and the person who receives it) do? Inadvertent disclosure can happen, particularly in complex litigation which involves a large number of documents, multiple document reviewers and issues of privilege, which will not necessarily be straightforward.

CPR r31.20 provides that, where a party inadvertently allows a privileged document to be inspected, the party who has inspected it may use it (or its contents) only with the permission of the court. Case law has clarified that, in the absence of fraud, the court may prevent the use of privileged documents only if there has been an "obvious mistake" in making such documents available for inspection. As instances of actual fraud are rare, disputes most commonly arise where one party argues that the privileged material was obviously disclosed by mistake and the other party states it believed that privilege had been waived.

The test

The principles for determining whether the court will restrain the use of a privileged document which has been disclosed are set out in Al Fayed & Ors v Commissioner for Police for the Metropolis & Ors [2002] EWCA Civ 780 (at paragraph 16):

"(iii) A solicitor considering documents made available by the other party to litigation owes no duty of care to that party and is in general entitled to assume that any privilege which might otherwise have been claimed for such documents has been waived....

(v)..., the court has jurisdiction to intervene to prevent the use of documents made available for inspection by mistake where justice requires, as for example in the case of inspection procured by fraud.

(vi) In the absence of fraud, all will depend upon the circumstances, but the court may grant an injunction if the documents have been made available for inspection as a result of an obvious mistake.

(vii) A mistake is likely to be held to be obvious and an injunction granted where the documents are received by a solicitor and:

(a) the solicitor appreciates that a mistake has been made before making some use of the documents; or

(b) it would be obvious to a reasonable solicitor in his position that a mistake has been made;

and, in either case, there are no other circumstances which would make it unjust or inequitable to grant relief.

(viii) Where a solicitor gives detailed consideration to the question whether the documents have been made available for inspection by mistake and honestly concludes that they have not, that fact will be a relevant (and in many cases an important) pointer to the conclusion that it would not be obvious to the reasonable solicitor that a mistake had been made, but is not conclusive; the decision remains a matter for the court.

(ix) In both the cases identified in (vii) (a) and (b) above there are many circumstances in which it may nevertheless be held to be inequitable or unjust to grant relief, but all will depend upon the particular circumstances.

(x) Since the court is exercising an equitable jurisdiction, there are no rigid rules."

As Moore-Bick LJ noted in Rawlinson & Hunter v Director of the SFO [2014] EWCA Civ 1129 (at paragraph 15):

"Once it is accepted that the person who inspected a document did not realise that it had been disclosed by mistake, despite being a qualified lawyer, it is a strong thing for the judge to hold that the mistake was obvious".

A development of the basic test: the two solicitors scenario

It is commonly the case in commercial litigation that junior lawyers conduct a first pass review of documents before more senior lawyers review those documents identified for them during the first pass review. What happens when the "obvious mistake" is only identified on this second pass review? This "two solicitors" situation, was considered by the English courts for the first time by the Court of Appeal in Atlantisrealm Ltd v Intelligent Land Investments (Renewable Energy) Ltd [2017] EWCA Civ 1029. In this case, a privileged document was disclosed by the defendant to the claimant because it had not been marked as privileged by a junior member of the defendant's review team, and was not referred to the more senior lawyer working on the case. At first instance, the judge accepted that the claimant's solicitor who had reviewed the disclosed document had not appreciated that it had been disclosed by mistake and refused to order the deletion of the privileged document.

On appeal, the Court of Appeal accepted that it could not go behind this finding of fact. However, in this case, the solicitor who had reviewed the privileged document had then passed it on to a more senior colleague. The Court of Appeal held that the more senior solicitor had appreciated that the document had been disclosed by mistake. The Court of Appeal went on to add a "modest gloss" to the principles laid down in earlier case law (at paragraph 48):

"If the inspecting solicitor does not spot the mistake, but refers the document to a more percipient colleague who does spot the mistake before use is made of the document, then the court may grant relief. That becomes a case of obvious mistake."

The most recent case law: the reasonable solicitor

In Microgeneration Technologies Ltd v RAE Contracting Ltd & Ors [2017] EWHC 1856 (Ch), the respondents sought an injunction to restrain Microgeneration from making use of legal advice from counsel given pursuant to the Chancery Bar Litigant in Person Support Scheme ("CLIPS") and contained in a letter from CLIPS, which was exhibited to one of the respondents' witness statements in error. The respondents said that they had intended to exhibit counsel's contemporaneous manuscript note of the hearing and not the legal advice given by him prior to and following the hearing. Microgeneration was promptly notified of the issue by correspondence in which the respondents gave a full explanation of the circumstances. Microgeneration reserved its position and said it would revert. However, instead, it filed a witness statement referring to the privileged material. Counsel for Microgeneration argued that it was not obvious that the CLIPS letter was disclosed by mistake. Counsel for the respondents argued the contrary, noting that the relevant paragraph of the witness statement to which the document was exhibited referred to a handwritten note of the hearing and not a standard form letter.

The court accepted the respondents' arguments and granted the injunction, finding that a reasonable solicitor in the position of Microgeneration's representative (who was not in fact a solicitor) would not have concluded that privilege had been waived by the respondents. By the time Microgeneration made use of the CLIPS letter by referring to it in a witness statement, it was fully aware that the respondents had made a mistake in exhibiting it.

Conclusions

Whether a document is in fact privileged and what protection the court will order in the event such a document is disclosed to another party will depend on the factual circumstances in each case. The following points should be kept in mind in light of the above decisions:

  • Care should be taken when carrying out disclosure reviews or dealing with privileged documents in order to avoid inadvertent disclosure and to prevent an issue arising in the first place.
  • If it does happen, prompt notification should be made to the receiving party, together with a full explanation of the circumstances of the mistake.
  • A receiving party should never knowingly use a document disclosed by mistake.
  • Where it believes there has been no mistake, a receiving party should document its detailed consideration of the question and the conclusion reached before making use of the document.

Even where the disclosing party can ultimately prevent the inadvertently disclosed privileged material from being used, the cat will still be very much out of the bag so to speak. The receiving party will still have obtained information it should not have done. Even if the relevant document is ultimately not adduced in evidence, it could open up lines of enquiry and the receiving party may be able to make use of the information for strategic purposes.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Nicola Vinovrski
 
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