Eurasian Natural Resources Corporation Ltd v Dechert LLP

An implied waiver of legal professional privilege arising from a solicitor-and-own-client costs assessment may be limited to the purposes of that assessment. It does not generally authorise wider disclosure or use of privileged material. Documents read by a judge at an open hearing do not invariably enter the public domain where the interests of justice require confidentiality to be preserved. Under Civil Procedure Rules 1998, rule 39.2, the court may order a hearing in private where publicity would prejudice confidentiality or justice. The restriction must be no wider than necessary, but a private hearing may be justified where public disclosure could prejudice a related criminal investigation.

Eurasian Natural Resources Corporation Ltd appealed against Master Haworth’s refusal to direct that its application under section 70 of the Solicitors Act 1974 be heard in private. The application concerned the detailed assessment of substantial bills delivered by its former solicitors, Dechert LLP, during an investigation into suspected fraud and possible self-reporting to the Serious Fraud Office. Dechert’s evidence contained extensive confidential material potentially protected by legal professional privilege. ENRC argued that any waiver of privilege was limited to the costs proceedings and that a public hearing could prejudice its position in the SFO investigation. The central issues were the scope of implied waiver, whether the evidence had entered the public domain because the costs judge had read it, and whether the assessment should be heard privately.

1. Appeal allowed. The application under section 70 of the Solicitors Act 1974, and any subsequent detailed assessment, were ordered to be heard in private.

2. A solicitor-and-own-client taxation is principally supervisory, reflecting the court’s jurisdiction over its officers. Although pursuing the assessment impliedly waived privilege so far as necessary for Dechert to resist the application and challenge the bills, the waiver was limited to the purposes of that assessment. It did not permit wholly irrelevant use or disclosure to third parties.

3. The authorities on implied waiver in professional negligence proceedings, including Lillicrap v Nalder & Sons, NRG v Bacon & Woodrow and Paragon Finance v Freshfields, did not decide whether an implied waiver could be limited where public disclosure would prejudice the client. The principles in Goldman v Hesper, Bourns Inc v Raychen Corp and B v Auckland District Law Society supported the conclusion that limited waiver may arise in appropriate circumstances.

4. The fact that the costs judge had read some of the evidence at a public hearing did not, in the particular circumstances, place it irreversibly in the public domain. The authorities concerning documents read by judges established only a prima facie position, subject to the interests of justice. The court retained power under section 37(1) of the Senior Courts Act 1981 to restrain further dissemination where it was just and convenient.

5. Under rule 39.2 of the Civil Procedure Rules 1998, the real risk that a public hearing would expose privileged material to the SFO and prejudice ENRC’s position justified a private hearing. Dechert’s interest in vindicating its reputation was adequately protected by a public judgment. It did not require the hearing itself to be public.

• High Court (Chancery Division): Appeal from Master Haworth’s decision in the Senior Courts Costs Office allowed. The application and any subsequent assessment under section 70 of the Solicitors Act 1974 were ordered to be heard in private.