Legal Business Blogs

A victory for legal privilege as ENRC triumphs in landmark SFO case

City litigators uttered a collective sigh of relief as legal professional privilege (LPP) was upheld in the judgment of the highly-anticipated Eurasian Natural Resources Corporation (ENRC) case against the Serious Fraud Office (SFO).

The decision has wide-ranging implications for businesses and litigators alike as to what information from internal investigations is protected by privilege, after the Court of Appeal today (5 September) ruled the ENRC is not obliged to disclose a series of documents which had been requested by the SFO.

Simmons & Simmons senior partner Colin Passmore told Legal Business: ‘This is incredibly good news for privilege. At long last we have some serious pushback on the previous ruling. Litigators across the City will no doubt be saying “Thank goodness, but why did it take so long?”’

Mining giant ENRC had argued that documents it prepared during an internal investigation should not be disclosed because they were covered by LPP, but a May 2017 High Court judgment from Justice Andrews ruled there was ‘a recognised public interest in the SFO being able to go about its business of investigation and prosecuting crime; and the sort of evidence which one would expect to be found in the disputed documents is likely to be of considerable value to its current investigation.’

At the time, an ENRC spokesperson said the company would appeal the decision ‘because the effect of this judgment is that a party who wishes to consult a lawyer in relation to an SFO dawn raid or criminal investigation is not entitled to the protections afforded by litigation privilege’.

ENRC was subsequently granted a right to appeal in October 2017, which led to today’s judgment in the Court of Appeal.

Also welcoming the decision was Clifford Chance litigation partner and president of the London Solicitors Litigation Association, Julian Acratopulo, although he noted that the Court of Appeal passed on the opportunity to make judgment on the separate issue of legal advice privilege. That issue dates back to the 2004 Three Rivers case, and who specifically in a company constitutes “the client” and can therefore be protected by privilege.

He told Legal Business: ‘The ruling on LPP is very important because it underpins the entire legal firmament of this country. While the court has given some useful guidance on the legal advice privilege, ultimately it said it should be left for the Supreme Court to determine.’

Herbert Smith Freehills disputes partner Julian Copeman agreed with Acratopulo’s assessment, commenting: ‘It’s a good judgment but it’s an opportunity missed to put a nail in the coffin of the Three Rivers decision.’

The judgment noted change was needed on the issue of legal advice privilege, but conceded it would be better dealt with by the Supreme Court: ‘In the modern world… we have to cater for legal advice sought by large national corporations and indeed multinational ones. In such cases, the information upon which legal advice is sought is unlikely to be in the hands of the main board or those it appoints to seek and receive legal advice.’

ENRC was represented in the case by Hogan Lovells partner Michael Roberts, who instructed Bankim Thanki QC, Tamara Oppenheimer and Rebecca Loveridge of Fountain Court Chambers. ENRC had previously been represented by Signature Litigation and its founder Graham Huntley, but Hogan Lovells took over the mandate in May 2017.

In addition to the privilege ruling, the case brought to light allegations from ENRC that Dechert partner Neil Gerrard had leaked confidential information to the press in July 2011 to expand the scope of the SFO’s investigation.

ENRC had enlisted Dechert and Gerrard in 2011 to assist in self-reporting ahead of the SFO probe, but the company alledges Gerrard arranged for privileged information to be passed on to The Times, which wrote an August 2011 article which led to the initial approach from the SFO.

ENRC said it was pursuing legal proceedings against Dechert and Gerrard. The relationship between ENRC, Dechert and Gerrard had already been soured after the mining giant claimed to have been overcharged last year.

In February last year, the High Court ruled that the ENRC will be able to have £11.6m bills assessed, after Master Rowley noted that Dechert’s billing estimates were ‘considerably awry on every occasion’.

A Dechert spokesperson said the firm defended its work and denied what it called ‘unfounded’ allegations: ‘We stand by the work we did and look forward to the opportunity of defending it in open court. We note that the criminal investigation by the Serious Fraud Office into ENRC is continuing and deplore ENRC’s attempt to discredit that investigation by seeking now to publicise unwarranted allegations against Dechert and its personnel.’