Serious Fraud Office (SFO) v Eurasian Natural Resources Corporation Ltd

Litigation privilege requires adversarial litigation to be in progress or reasonably in contemplation, and the communication or document must have the sole or dominant purpose of conducting that litigation. An investigative process, including an SFO criminal investigation, is not itself adversarial litigation. Anticipation of an investigation does not necessarily establish a reasonable contemplation of prosecution.

For a corporate client, legal advice privilege protects communications with persons authorised to seek or receive legal advice on the company’s behalf. It does not protect factual information gathered from employees, former employees or other third parties merely to enable lawyers to advise. Lawyers’ working papers are privileged only where they would betray the tenor of the legal advice. Documents intended to be shared with the prospective adversary are not protected by litigation privilege.

The Director of the Serious Fraud Office sought declarations concerning documents generated during internal investigations undertaken for Eurasian Natural Resources Corporation Ltd and its subsidiaries. The documents included lawyers’ interview notes, forensic accountants’ books-and-records materials, documents presented to the company’s Board, and communications said to contain legal advice.

The SFO’s investigation concerned suspected fraud, bribery and corruption. It had issued notices under section 2 of the Criminal Justice Act 1987. ENRC claimed litigation privilege, legal advice privilege, or both. The principal issues were whether criminal proceedings were reasonably in contemplation, whether the documents were created for the dominant purpose of conducting such proceedings, and whether particular communications were privileged.

1. Litigation privilege. The claim failed in relation to Categories 1, 2 and 4. The applicable requirements were that litigation was in progress or reasonably in contemplation, that the communication or document was made for the sole or dominant purpose of conducting that litigation, and that the litigation was adversarial rather than investigative or inquisitorial.
2. An SFO investigation was a preliminary criminal investigative process, not adversarial litigation. Although an investigation was reasonably in contemplation by 11 August 2011, that did not establish a reasonable contemplation of prosecution. The evidence showed only a speculative possibility of prosecution. A prosecution became a real prospect only where the prospective defendant knew enough about the circumstances or likely discoveries to appreciate that prosecution was realistic.
3. Even if prosecution had been reasonably contemplated, the documents were not created for the dominant purpose of conducting it. The internal investigations were directed principally to fact-finding, compliance, remediation, self-reporting and possible avoidance of prosecution. Documents intended to be shared with the SFO, including underlying materials used to prepare reports and presentations, could not attract litigation privilege.
4. Legal advice privilege. Category 1 interview notes were not privileged. The interviewees were not shown to have been authorised to seek or receive legal advice for ENRC. The notes were preparatory factual material, and did not reveal the trend of legal advice. A lawyer’s selection or distillation of information did not itself cloak the information with privilege.
5. The five Category 3 documents were privileged. They were prepared for confidential solicitor-client communications in which legal advice was given to the Board. Factual material otherwise unprivileged could fall within the privilege when incorporated into that confidential communication. The privilege extended to the advice and the record of what was said in that context, but not generally to the underlying investigation reports or data.
6. The October 2010 emails involving ENRC’s Head of Mergers and Acquisitions were not privileged. The evidence showed that he was acting as a business executive rather than as ENRC’s legal adviser.
7. The court granted the SFO declaratory relief in respect of all disputed documents except Category 3. The SFO was entitled to use Part 8 proceedings to resolve the privilege dispute, and there was no basis for refusing relief on procedural or discretionary grounds.

First-instance decision. The judgment itself does not state any prior appellate decision.