A question of privilege

The issue of how companies should maintain privilege over documentation produced by internal investigations is becoming an ever-more-frequent topic before the courts of England and Wales. And the same can be said of Guernsey.

This topic was discussed in an earlier blog about the 2017 judgment in SFO v Eurasian Natural Resources Corporation (ENRC). In that case, the court decided that reasonable anticipation of a criminal investigation didn’t amount to the reasonable anticipation of litigation.

The issue of litigation privilege reared its head again before the English High Court last December. This time, the court tried to reverse some of the more controversial elements of the earlier ENRC decision, which has caused a considerable amount of comment in legal circles.

The claimants in the more recent case applied for the disclosure of documents held by the Royal Bank of Scotland (RBS), created during an investigation by a law firm to prepare a report to HM Revenue & Customs (HMRC). The court had to decide whether the documents had been created with the ‘sole or dominant purpose’ of responding to litigation which was threatened by HMRC.

The court ruled that it wasn’t possible to apply the same conclusions reached about ENRC’s interactions with the SFO to RBS’s interactions with HMRC.

If your business is facing an internal investigation, it’s usually helpful to instruct external legal advisers at an early stage. That way you can make sure the investigation is conducted in a manner which, as far as possible, maintains privilege over any documents produced.