UK: Making Privilege Whole Again: Alternative Facts Or A Restatement Of Principle?

Last Updated: 19 September 2018
Article by David Rundle

On 5 September the Court of Appeal handed down its judgment in the long-awaited, and much discussed, case of SFO v ENRC. Justice Andrews' ruling in the lower court, which rejected ENRC's claim to litigation privilege, had prompted a febrile response at the Investigations Bar and wider legal community. On one view it appeared that companies would struggle to successfully claim litigation privilege unless an enforcement action or prosecution were a certainty, or where they were confident of their guilt. The ruling sculpted a significantly emaciated form of litigation privilege, particularly in the context of an internal investigation, and left counsel struggling to find cast-iron answers to difficult questions. At its heart, the ruling seemed unrealistic. It failed to take due consideration of how parties perceive and respond to scrutiny from a prosecuting agency, irrespective of such scrutiny's formal status.

The Court of Appeal reversed the High Court's ruling, reasserting a more flexible, fact-led approach to the assessment of litigation privilege. Whilst the Court's judgment does clarify some areas of principle, it predominantly purports to represent an alternative view of the facts. It is perhaps a curious feature of this matter that two senior courts can arrive at such divergent conclusions about a factual issue, specifically the reasonable contemplation of the parties, based largely on the same evidence. That they have, rather suggests that the fault line is more principled. What was considered "reasonable contemplation" of prosecution is arguably the source of the rift. Whilst the focus of the case is ENRC's claim for litigation privilege ultimately its legacy may be as a primer to prompt changes to the scope of legal advice privilege.

Factual background

The facts of this case are broadly well known. In December 2010 ENRC, after receiving a whistleblow alleging corruption within one of its subsidiaries, instructed a law firm to conduct an internal investigation. Matters escalated quickly and by the beginning of 2011 ENRC's Board was being advised of a risk that the SFO would formally intervene and may conduct a dawn raid. On 10 August 2011 the SFO wrote to ENRC. The letter made reference to intelligence and media reports about alleged corruption, before urging ENRC to consider the SFO's Self-Reporting Guidelines carefully. The letter stressed that the SFO was not carrying out a criminal investigation at that stage.

The letter prompted a meeting between ENRC and the SFO, commencing a cooperative dialogue between the parties, which lasted for about 18 months before breaking down. Subsequently, in response to section 2 notices, ENRC asserted that materials connected with its internal enquiries were protected by both litigation privilege and legal advice privilege. Those claims were dismissed by the High Court and ENRC appealed. The Court of Appeal allowed the appeal in part, finding that litigation privilege did apply in the circumstances.

The Court of Appeal's judgment

Litigation privilege: "Reasonable contemplation" in the context of criminal proceedings

The High Court had concluded that ENRC had not been armed with sufficient information to reasonably contemplate criminal litigation. Upper in Justice Andrews' mind was the fact that, given the SFO was merely investigating the case, it had not yet formed a final assessment of whether the weight of the evidence or the public interest warranted charge. Therefore, unless ENRC was sure of its guilt, it could not reasonably have contemplated a prosecution.

The Court of Appeal, in placing less weight on the status of the process, considered that the evidence, including the contemporaneous statements of the parties, did reveal ENRC's contemplation of a prosecution. It determined that the "sub-text of the relationship between ENRC and the SFO was the possibility, if not the likelihood, of prosecution if the self-reporting process did not result in a civil settlement". ENRC's formulation of that view was reasonable in the circumstances, not least of all given its receipt of a letter from the SFO mentioning recent intelligence and media reports about corruption, coupled with an admonishment to consider carefully the Self-Reporting Guidelines.

Whilst this aspect of the appeal is characterized as "primarily factual", the judgment reasserts a less rigid, and more realistic, approach than that adopted by Justice Andrews. The judgment dismisses the notion that the investigative stage of a matter is, by its nature, almost incapable of prompting a reasonable contemplation of prosecution. Instead, the stage of the process is one aspect of the factual matrix against which a party's belief, and its reasonableness, is assessed. Moreover, in observing that an international corporation is obviously less capable of being aware of its guilt than an individual, the Court rejected Justice Andrews' focus on the lack of corporate knowledge regarding the alleged misconduct. That a corporation does not know the full facts surrounding potential misconduct, and hence continues its internal enquiries, does not negate the reasonable contemplation of a prosecution.

"Dominant Purpose" in the context of corporate compliance and governance

Whereas the Court's resolution of ENRC's "reasonable contemplation" principally emerged from a review of the facts, its assessment of "dominant purpose" was grounded in a fundamental challenge to Justice Andrews' position on the guiding legal principles. Justice Andrews had rejected the notion that litigation privilege attached equally to material created for the purpose of avoiding or settling contemplated litigation, as it did to resisting or defending it. The Court of Appeal disagreed. The fact that ENRC may have been seeking a civil settlement in order to avoid prosecution did not defeat its privilege claim.

A more difficult issue for the Court concerned ENRC's ostensible dual-purpose when investigating the facts of the alleged misconduct. The SFO's letter of 10 August, whilst impliedly identifying the benefits of self-reporting, also expressed an interest in discussing "ENRC's governance and compliance programme and its response to the allegations as reported". In reacting to this letter, ENRC arguably had two purposes. The latter, a prospective review of its governance and compliance programme would not have attracted the protection of litigation privilege. The Court's response to this argument is both practical and sensible. It found that the two purposes were sufficiently interconnected; criminal litigation (and its threat) was the "stick used to enforce appropriate standards" of compliance and governance.

Having ironed out those wrinkles, the Court turned to consider whether the facts demonstrated that ENRC's dominant purpose was to resist contemplated criminal litigation, in preference to (as Justice Andrews had found) an intention to disclose the relevant materials to the SFO. In doing so, it took an alternative view of the facts. The Court found no evidence of ENRC's actual commitment to share the materials with the SFO, notwithstanding their cooperative position.

Legal advice privilege- primed for reform

Given the Court's decision on litigation privilege, the question of whether legal advice privilege applied became largely academic. It was also easily dismissed. ENRC's claim hinged on whether communications between its lawyers and its employees attracted legal advice privilege. The Court in the Three Rivers (No. 5) case had already found that legal advice privilege would not attach to communications between a company's lawyer and its employee, unless the employee is authorised to seek and receive legal advice and hence can stand in the shoes of the 'client' for the purposes of the lawyer-client relationship. Therefore, the Court of Appeal rightly concluded that the issue was a matter for the Supreme Court alone to resolve.

The state of the law was not however passed over without comment. Sir Brian Leveson, giving judgment for the Court, observed that the current scope of legal advice privilege may not be fit for purpose, particularly in the context of large corporations where information is in the hands of persons who do not have the authority to seek and receive legal advice. The difficulties caused by the restriction in Three Rivers (No. 5) are particularly acute for parent companies seeking information from its group entities. The level of protection which a company is afforded through legal advice privilege is a product of its size. That, in the opinion of Lord Justice Leveson, was unfair. It was also undesirable, being "out of step with the international common law on this issue".


By focusing on the contemporaneous evidence of the parties', and by taking a more realistic view of the relationship between a prosecuting authority and a company with concerns about potential criminal conduct, the Court of Appeal has offered a more workable approach to the operation of litigation privilege. The Court clearly took a different perspective of what was "reasonable contemplation", informed by a more pragmatic outlook on how companies (and their legal advisors) view the world. The judgment, by reestablishing the status quo will adjust the temperature of the legal community. Looking forward, the big question will be the viability of the current restraints on legal advice privilege and whether its current scope is unsuitably anachronistic. The answer lies in the Supreme Court.

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Morrison & Foerster LLP
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Morrison & Foerster LLP
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions