(1) Pcp Capital Partners Llp (2) Pcp International Finance Ltd v Barclays Bank Plc

Waiver of legal professional privilege requires a sufficiently substantive reference to legal advice and reliance on that reference to support or advance a live issue. A statement of the advice’s conclusion may suffice; the content/effect distinction is not a rigid test. The court must examine reliance, its purpose and the case context. If waiver is established, the relevant issue or transaction must be identified realistically, and disclosure should cover all privileged material within that scope. Earlier loss of privilege through third-party deployment does not prevent a later collateral waiver where the material is relied on. On the facts, reliance on lawyers’ approval of advisory agreements waived privilege and justified further disclosure of legal advice concerning them.

PCP, an investment consortium including investors from Abu Dhabi, brought substantial civil claims against Barclays arising from the 2008 capital raisings. PCP alleged that Barclays represented that it would receive the same deal as Qatari investors, while concealing additional payments made under advisory services agreements.

Before trial, PCP sought further disclosure of privileged material concerning those agreements. It relied on references to legal advice in Barclays’ witness statements and trial opening, including documents previously deployed by the Serious Fraud Office in related criminal proceedings. Barclays disputed waiver and raised timing, scope and proportionality objections. The central issue was whether the references amounted to waiver and, if so, the extent of the resulting disclosure.

Order. The application was granted in the terms of paragraph 1.1 of the application notice, subject to questions of timing, compliance and drafting. Issues 2 and 3 were therefore unnecessary to determine.

1. Legal professional privilege is a fundamental client right and waiver is not readily established. A reference to legal advice must be sufficiently substantive, and the party must rely on it to support or advance its case on an issue for decision. A purely narrative reference to the fact of advice is insufficient.
2. The content/effect distinction cannot be applied mechanically. The court must consider whether there was reliance on the privileged material, the purpose of that reliance and the particular context. A reference only to the conclusion of advice may still waive privilege. The approach was consistent with the contextual reasoning in Marubeni v Alafouzos [1986] WL 408062, and with the nuanced approaches discussed in Brennan v Sunderland City Council [2009] ICR 479, Digicel v Cable & Wireless [2009] EWHC 1437 and Mid-East Sales v United Engineering [2014] EWHC 892.
3. Mr Jenkins’ statements that he took comfort from, and followed, the lawyers’ advice conveyed that the lawyers had approved the advisory services agreements as lawful. The references were relied on to support Barclays’ case that the agreements were legitimate rather than sham transactions. Mr Varley’s evidence and Barclays’ opening made the same substantive point. Waiver was therefore established.
4. The scope of waiver is determined by identifying the relevant issue or transaction realistically. All privileged material falling within that issue or transaction must be disclosed, avoiding artificially narrow or wide outcomes. Here, Barclays’ compendious reliance on legal advice concerning the advisory services agreements required disclosure of the privileged advice relating to those agreements, including material necessary to understand the instructions on which the advice was based.
5. The fact that the Open Documents had lost privilege through deployment in the criminal proceedings did not make them irrelevant to a later waiver analysis. A two-stage collateral waiver remained possible. The timing of the application was acceptable, and the disclosure exercise was not disproportionate given the scale of the litigation, the resources deployed and the dates on which the relevant witnesses were due to give evidence.
6. In obiter observations, the judge indicated that an interview answer concerning an Open Document would not be privileged, provided it contained no reference to another privileged communication. A document substantially reproducing the privileged communication need not be a verbatim copy to require disclosure, applying the ruling referred to from the 2010 Baha Mousa Inquiry.