Throwing a lifeline to the increasingly eroded principle of legal professional privilege (LPP), Eurasian Natural Resources Corporation (ENRC) has this week been granted the right to appeal against a controversial order to disclose documents in a Serious Fraud Office (SFO) investigation. Hogan Lovells is the latest in a series of firms to be instructed by ENRC over the SFO investigation.
In May, the High Court had ruled that documents prepared by the mining giant ENRC relating to an SFO probe into alleged fraud, bribery and corruption were not covered by LPP and therefore had to be disclosed.
Justice Andrews held that there was ‘a recognised public interest in the SFO being able to go about its business of investigating 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.’
On a wider point, she noted ‘legal privilege attaches only to communications between the lawyer and those individuals who are authorised to obtain legal advice on that entity’s behalf. Communications between the solicitors and employees or officers of the client, however senior in the corporate hierarchy, who do not fall within that description will not be subject to legal advice privilege.’
At the time, ENRC confirmed it 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.’
Herbert Smith Freehills disputes partner James Norris-Jones told Legal Business that it is a difficult situation for clients at the moment due to the SFO and Financial Conduct Authority (FCA) taking ‘increasingly aggressive approaches in an incredibly regulated world’.
He added: ‘It’s becoming increasingly difficult to preserve LPP. I don’t think it’s good for this country to be out of step on an issue like privilege’.
Simmons & Simmons senior partner Colin Passmore described the appeal being granted as ‘good news’, but also called for the matter to be concluded quickly.
‘If you talk to lawyers who advise corporates, they find the whole issue very difficult. How can you gather information when employees of a company are not regarded as part of the client?’
Signature Litigation had been representing ENRC throughout the investigation, led by founder Graham Huntley, who had instructed Fountain Court Chambers’ Richard Lissack QC and Tamara Oppenheimer, in addition to Outer Temple Chambers’ Saaman Pourghadiri.
However, Hogan Lovells has today (12 October) taken over the mandate, with commercial litigation partners Chris Hardman and Michael Roberts advising ENRC on its appeal.
ENRC had initially hired Dechert to represent it and undertake a self-reporting process in 2011, but dropped the firm in 2014 after the company claimed it had been overcharged by over £11m.