Burkle Holdings Ltd. v Laing No 2

Material disclosed by a solicitor may lose legal professional privilege as against the opposing party where the disclosure was authorised, or where it reveals the fact and terms of a concluded agreement between the parties. The loss of privilege does not necessarily end the court’s ability to protect confidentiality in equity. The court must balance the circumstances of disclosure, the relevance of the material, the manner in which it came into the other party’s hands, and any delay, acquiescence or other equitable defence. Relief restraining use will ordinarily be the starting point, but it may be refused where the material has already been deployed in the proceedings and confidentiality can no longer realistically be restored.

The proceedings concerned a dispute between Burkle Holdings Ltd and David Eric Laing about loans, shares in a development vehicle and an alleged profit-sharing entitlement. The immediate application arose before trial. Burkle sought to prevent Mr Laing from relying on passages in documents prepared by Burkle’s solicitor, Mr Kelly, which reported an alleged admission by Mr Watson concerning a second oral agreement.

A previous disclosure application had been dismissed by Judge Toulmin, who held that Mr Kelly acted for Burkle alone and that the relevant solicitor-client communications were privileged: [2005] EWHC 638 TCC. The issue was whether the later documents remained protected by privilege or confidence, and whether Mr Watson had waived or lost that protection.

1. Applications refused. The disputed documents and statements could be deployed at trial.
2. The material comprised first- or second-hand hearsay reporting an alleged admission against interest. Its admissibility was governed by the Civil Evidence Act 1995 and the applicable Civil Procedure Rules provisions. The fact that the material was hearsay did not resolve the separate questions of privilege and confidentiality.
3. Following Webster v James Chapman & Co [1989] 3 All ER 939, legal professional privilege and confidentiality were distinct. Privilege, once lost through unauthorised disclosure, could not be reclaimed, although equity might still restrain use of confidential material where appropriate.
4. The alleged admission was communicated in the context of instructions to prepare and negotiate replacement agreements. Those instructions extended by necessary implication to explanations for withdrawing the proposed profit-share agreement. Further, if the alleged oral agreement had been made, statements by one contracting party about its fact and terms were no longer privileged as against the other contracting party. The fact that Mr Watson disputed making the admission or concluding the agreement did not prevent disclosure of the statements as evidence.
5. The equitable jurisdiction was discretionary. The court considered the manner of disclosure, the relevance of the statements to the central issues, the deployment of the documents in the earlier privilege hearing, and the delay in making the application. Although the ordinary starting point was protection of privileged material, following USP Strategies Plc v London General Holdings Limited [2004] EWHC 373 (Ch), the balance in this case favoured refusing relief. The earlier use of the documents meant that confidentiality could no longer realistically be restored.

This was a first-instance application in the High Court. The judgment records an earlier disclosure application determined by Judge Toulmin, which was dismissed: [2005] EWHC 638 TCC. The present applications were refused.