Berezovsky v Hine & Anor

Legal professional privilege is founded on confidentiality, and loss of confidentiality may be limited to particular persons and purposes. Disclosure of privileged information to a prospective witness during proofing does not automatically destroy privilege generally. The scope of any restraint depends on the nature of the information and the circumstances in which it was communicated. Where its confidential character would have been obvious, the witness is subject to implied restrictions on use, but those restrictions do not ordinarily prevent the witness using the information for his own proper interests in litigation with the person who disclosed it. The waiver is not thereby extended to technically separate co-defendants. Disclosure to them may nevertheless occur through legitimate deployment of the information by estate representatives where the estate’s interests require it.

The claimant sought inspection of redacted passages in solicitors’ notes and transcripts of proofing meetings with the late Arkadi Patarkatsishvili. The material had been disclosed in related proceedings, subject to redactions for legal advice and communications concerning the conduct of litigation. The Family Defendants sought inspection in proceedings concerning claims to assets of the deceased’s estate.

The court assumed relevance and considered whether disclosure of privileged information to the deceased during witness proofing had waived privilege against him, his estate representatives, the Family Defendants, and a person who had attended some meetings.

1. The application was determined on the basis that the redacted material was privileged and confidential. The starting point was that privilege is based on confidentiality. Loss of confidentiality, or waiver, may operate against particular persons without destroying privilege against the rest of the world: Gotha City v Sotheby’s [1998] 1 WLR 114, Attorney General v Guardian Newspapers No. 2 1990 1 AC 109, and USP Strategies Plc v London General Holdings 2004 EWHC 373 (Ch).

2. The effect of disclosure may also be confined by purpose. The cases concerning disclosure for criminal disclosure, costs taxation, and regulatory purposes demonstrated that further use may be restrained according to the express or implied basis of the communication: British Coal Corporation v Dennis Rye Ltd [1998] 1 WLR 113, Bourns Inc v Raychem Corporation [1999] 3 All ER 154, and B v Auckland District Law Society [2003] 2 AC 736.

3. A witness receiving obviously privileged information will ordinarily understand that it is confidential and cannot use it generally. The relevant restraints depend on the information and the circumstances of communication: Istil Group v Zahoor [2003] 2 All ER 252.

4. On the assumed facts, the deceased could not have been restrained from using the information for his own proper interests in litigation against the claimant. The administrators therefore could not resist inspection or use on the same basis. The more stringent restrictions in Rye, Bourns and Auckland required clearer and more specific circumstances.

5. The waiver in favour of the deceased and his estate did not extend directly to the Family Defendants. The property-right analysis and the principles in Paragon Finance Plc v Freshfields [1999] 1 WLR 1183 and Lillicrap v Nalder & Sons [1993] 1 WLR 94 did not apply. The administrators could, however, disclose or deploy the material where they bona fide considered that this served the estate’s interests, subject to appropriate confidentiality arrangements.

6. The Family Defendants as such were not entitled to inspection. The Interim Administrators were entitled to inspection, and Mrs Gudavadze was entitled to inspect material disclosed at meetings which she attended, subject to equivalent restraints concerning her legitimate interests.