Atlantisrealm Ltd v Intelligent Land Investments (Renewable Energy) Ltd

Where a privileged document is disclosed inadvertently and the mistake is obvious to the opposing party, the court has an equitable discretion under CPR rule 31.20 to permit or restrain its use. The mistake may be obvious even if the solicitor who first inspected the document did not recognise it, where a more percipient colleague identified it before use. The court must assess all the circumstances and apply no rigid rule. Subsequent use after the mistake was recognised does not necessarily make an injunction unjust. Parties and their lawyers should co-operate promptly to correct obvious disclosure mistakes.

Intelligent Land Investments (Renewable Energy) Ltd appealed from an interlocutory judgment of His Honour Judge Klein, sitting as a High Court Judge in the Technology and Construction Court at Leeds. The judge dismissed its application for an injunction requiring Atlantisrealm Ltd to destroy a privileged email and preventing its use in ongoing warranty litigation.

The disputed email had been disclosed among 4,891 documents. A junior lawyer had categorised it as disclosable, while the receiving solicitors later treated it as significant and used it in preparing the case. The lower court held that inadvertent disclosure had not been established and, alternatively, that any mistake was not obvious. The appeal concerned the proper application of the principles governing inadvertent disclosure, including whether the mistake was obvious and whether later use made relief unjust.

1. Appeal allowed. The March 2014 email was a privileged document disclosed inadvertently within CPR rule 31.20. Neither the responsible solicitor, the partner nor the client had taken a considered decision to waive privilege; its disclosure resulted from a junior lawyer’s classification error (paras [35]–[38]).
2. The absence of evidence from the junior lawyer who made the error did not prevent that conclusion. The surrounding evidence sufficiently established what had happened, contrary to the first-instance judge’s approach (para [37]).
3. The mistake was obvious to the receiving party. The solicitor who first reviewed the email, Mr Fallon, did not appreciate the mistake, and that finding of fact could not be displaced on appeal. However, Mr Newton later recognised the significance of the email and appreciated that its disclosure was a mistake before it was put to use. The court added a modest gloss to the principles in Al-Fayed ([2002] EWCA Civ 780) and Rawlinson ([2014] EWCA Civ 1129): where the inspecting solicitor misses the mistake but a more percipient colleague identifies it before use, the court may grant relief on the basis of obvious mistake (paras [39]–[49]).
4. Once inadvertent disclosure and obvious mistake were established, the court retained an equitable discretion under CPR rule 31.20. There were no rigid rules. Atlantisrealm’s subsequent circulation and use of the email after 5 December 2016 did not make it unjust to restrain further use (paras [51]–[53]).
5. The court exercised the discretion in favour of ILI, following the approach the first-instance judge indicated he would have taken if he had found an obvious mistake. The injunction was therefore granted, restraining use of the email and requiring the relief sought by ILI (para [54]).
6. The court stressed that electronic disclosure is large and error-prone, that lawyers should co-operate promptly to correct obvious mistakes, and that the disclosure process depends on honesty by both the disclosing and inspecting parties (paras [55]–[56]).

1. Court of Appeal (Civil Division) — [2017] EWCA Civ 1029: appeal allowed. The Court of Appeal held that the privileged email had been disclosed inadvertently, that the mistake was obvious to the receiving party, and that its use should be restrained.
2. Queen’s Bench Division, Leeds District Registry — interlocutory judgment of His Honour Judge Klein, sitting as a High Court Judge in the Technology and Construction Court: application for an injunction dismissed. The judge held that mistaken disclosure had not been established and, alternatively, that the mistake was not obvious.