United States of America v Philip Morris Inc & Ors

Litigation privilege requires litigation to be reasonably in prospect. There must be a real prospect rather than a mere possibility, although litigation need not be more likely than not. A general apprehension that claims may arise is insufficient.

Legal advice privilege does not cover every communication made during a solicitor’s retainer. The court must examine whether the particular confidential communication formed part of the exchange through which legal advice on rights, liabilities or obligations was sought or given. Advice may extend to what should prudently be done in the relevant legal context.

On a request for overseas evidence, a blanket privilege objection should prevent an examination only in the clearest case. Potential claims should ordinarily be resolved by directions and rulings on particular questions.

The United States sought evidence from an English solicitor for proceedings against tobacco companies in the United States District Court for the District of Columbia. The evidence concerned the creation and implementation of document-management policies within the British American Tobacco group.

Moore-Bick J ordered the solicitor’s examination under the Evidence (Proceedings in Other Jurisdictions) Act 1975. The corporate client and the solicitor appealed. They contended that all material evidence was protected by legal advice privilege and litigation privilege, and that the proposed examination would be oppressive.

The central issues were whether tobacco litigation or third-party requests for documents had been reasonably in prospect when the solicitor was retained, whether the entire retainer and its communications attracted privilege, and whether safeguards governing particular questions could strike a fair balance.

1. The appeals were dismissed unanimously. The judge was entitled to order the examination and to resolve claims to privilege through advance directions and rulings on particular questions.

2. Litigation privilege requires confidential communications made for the dominant purpose of conducting, preparing for or advising upon pending or contemplated litigation. Litigation is contemplated when it is reasonably in prospect. This requires a real prospect rather than a mere possibility, but does not require a probability exceeding 50 per cent. A distinct possibility that someone might eventually make a claim, or a general apprehension of future litigation, does not suffice.

3. Litigation against the corporate appellant was not reasonably in prospect when the solicitor was retained. The contemporary material showed only possible future liability. The document-review exercise was not preparation of material for a brief in anticipated litigation.

4. Although a letter-of-request process compelling a non-party to produce documents is adversarial, that character alone does not confer litigation privilege. Such a process concerns the non-party’s legal obligation to provide documents. It does not ordinarily involve collecting evidence or information for the client’s brief. Communications about compliance, confidentiality or notification to another party therefore do not attract litigation privilege merely because the documents are wanted for litigation between others.

5. Legal advice privilege protects confidential lawyer-client communications forming part of the necessary exchange through which legal advice is sought or given. Legal advice is construed broadly and includes advice about what should prudently and sensibly be done in the relevant legal context. Nevertheless, privilege cannot be established simply by identifying the dominant purpose of a long retainer. Communications concerning activities such as collecting, listing, cleaning, storing or transporting documents may require no legal knowledge and must be assessed individually.

6. The English court should assist a requesting foreign court within the limits of the Evidence (Proceedings in Other Jurisdictions) Act 1975, while maintaining a fair balance with the witness’s interests. It was not clear that most relevant questions would be privileged. The use of English counsel, examination before a Commercial Court judge, advance disclosure of proposed questioning and judicial control adequately addressed the remaining risk of oppression.

• Court of Appeal (Civil Division): The appeals were dismissed unanimously. The order for Mr Foyle’s examination remained effective.
• Commercial Court: Moore-Bick J ordered Mr Foyle’s examination pursuant to letters of request from the United States District Court, subject to advance identification of documents and proposed questioning and a further directions hearing. The judge refused a similar order concerning Mr Broughton; that refusal was not appealed.