COURT OF APPEAL ISSUES LANDMARK RULING ON PRIVILEGE IN INTERNAL INVESTIGATIONS
The first instance decision of Andrews J in The Director of the Serious Fraud Office v. Eurasian National Resources Corporation Ltd (ENRC) was controversial. This decision greatly narrowed the scope of litigation privilege in the context of investigations by companies into allegations of malfeasance. When the decision was handed down in May 2017, it was widely viewed as an assault on one of the foundational pillars of England’s adversarial justice system and a misapplication of the law of privilege.
On 5 September 2018, in reasons jointly written by Chancellor Geoffrey Vos, Sir Brian Levenson and Lord Justice McComb, the Court of Appeal overturned the decision at first instance in favour of the more balanced approach that Chancellor Vos had adopted in Bilta. In doing so, the judges reversed a worrying trend toward restricting privilege in documents created by companies and their external advisers in the course of internal investigations, which had left many companies with the view that internal investigations conducted in conjunction with their legal counsel would be open to scrutiny and potentially used against them by regulators or civil opponents. Going one step further, the Court also suggested that the restrictive approach to legal advice privilege that it had adopted in Three Rivers (No.5) should be overturned, although it stopped short of actually doing so.
This article considers this landmark decision and suggests several factors that may need to be taken into account when considering and conducting an internal investigation.
Privilege – a primer
Privilege is a legal doctrine which protects certain information or documents from having to be disclosed to regulators, such as the competition and markets authorities or Financial Conduct Authority (FCA), prosecuting authorities, such as the Serious Fraud Office (SFO) or police, or civil counterparties in the context of an investigation, prosecution or litigation.
Jan-Mar 2019 issue
Kirkland & Ellis International LLP