Last month the High Court ruled that documents prepared by mining giant Eurasian Natural Resources Corporation (ENRC) relating to a Serious Fraud Office (SFO) investigation were not protected by legal professional privilege.
The SFO began investigating ENRC in 2013 over allegations of fraud, bribery and corruption. As part of its investigation, the agency requested relevant documents from ENRC. ENRC refused on the basis that the documents were privileged. But Mrs Justice Andrews ruled that the SFO was warranted in its request to see the documents, stating that there is a ‘recognised public interest in the SFO being able to go about its business’.
ENRC, represented by Signature Litigation’s Graham Huntley, intends to appeal the decision that has alarmed litigation lawyers. The judgment will significantly affect criminal investigations, and the way that clients and lawyers conduct their business.
Simmons & Simmons senior partner Colin Passmore (pictured) summarised the impact: ‘This has really thrown a spanner in the works. It’s taking away a privilege which the vast majority of lawyers, solicitors and barristers assumed was available.
‘It means that we can no longer have any certainty around whether we can investigate, for example, a whistleblowing accusation, and we can no longer look into something we might see in the press that we know is suggestive of wrongdoing, and might well lead to a criminal prosecution, with the benefit of the cloak of privilege.’
Litigators also point out that the decision undermines the SFO’s rhetoric. Under the leadership of David Green QC, the SFO has been actively encouraging organisations to follow self-reporting guidelines and co-operate with it in return for more lenient sanctions. In January this year, the SFO entered into a £497.3m deferred prosecution agreement (DPA) with Rolls-Royce following a four-year investigation into bribery and corruption. Under the agreement, Rolls-Royce saved around 50% on what it would have spent fighting the claim and the SFO said the discount ‘reflected the gravity of the conduct and the full co-operation of Rolls-Royce in the investigation’.
Fieldfisher dispute resolution partner Tony Lewis said: ‘It’s a bit of an own goal. In the short term it’s a victory for the SFO, as it has obtained the ENRC investigation papers. But in the longer term this could signal the end of its preferred model – the carrot (the DPAs) and stick (criminal prosecution) leniency programme. As a result it could backfire on the SFO as businesses may become less willing to co-operate if they can’t claim privilege.’
tom.baker@legalease.co.uk