Loreley Financing (Jersey) No 30 Limited v Credit Suisse Securities (Europe) Limited & Ors

Litigation privilege protects communications made for the sole or dominant purpose of conducting adversarial litigation, including secondary evidence which would reveal their content. It does not create a general zone of privacy around litigation or ordinarily protect facts such as the identity of persons authorised to instruct a solicitor.

Exceptionally, an identity may be privileged where its disclosure would tend to reveal privileged communications or litigation strategy. The party claiming privilege must explain that consequence in sufficiently general terms.

A request under Part 18 must be concise and strictly confined to information reasonably necessary and proportionate for preparing or understanding a case. Mere relevance, particularly peripheral relevance, is insufficient.

Loreley, a special purpose vehicle with no employees, claimed damages from Credit Suisse entities arising from its purchase of notes linked to residential mortgage-backed securities. Credit Suisse pleaded limitation and contended that knowledge held by two German banks, IKB and KfW, should be attributed to Loreley for the purposes of section 32 of the Limitation Act 1980.

Credit Suisse sought the identities of all individuals authorised to instruct Loreley’s solicitors. Robin Knowles J held in [2022] EWHC 1136 (Comm) that those identities were not privileged. He ordered Loreley to answer a Part 18 request and to disclose its solicitors’ engagement letter without a redaction concealing the relevant identities.

The appeal concerned whether the identities were inherently protected by litigation privilege, whether the general declaration should stand, and whether the Part 18 request was reasonably necessary and proportionate.

1. The appeal was allowed in part. The general declaration and the order requiring an answer to Request 17 were set aside. The appeal against the order requiring disclosure of the engagement letter with Redaction 6 removed was dismissed.

2. Litigation privilege is concerned with communications. It covers communications between parties or their solicitors and third parties where adversarial litigation is in progress or contemplation and the sole or dominant purpose is conducting that litigation. It also protects secondary evidence which would tend to reveal the content of privileged communications. It does not establish a general zone of privacy surrounding litigation: Three Rivers District Council v Governor and Company of the Bank of England (No 6) [2004] UKHL 48 and Director of the Serious Fraud Office v Eurasian Natural Resources Corpn Ltd [2018] EWCA Civ 2006 applied.

3. Ordinarily, identifying a person authorised to instruct a solicitor reveals nothing about the content of the communications and does not inhibit candid discussion or full preparation of the case. Such an identity is therefore not inherently privileged. In an unusual case, privilege may arise if disclosure would tend to reveal the content of a communication or litigation strategy. The party asserting privilege must explain that consequence without revealing the privileged matter itself.

4. Redaction 6 concealed only the identities of persons to whom the solicitors would report and from whom they would take instructions. Loreley did not contend that disclosure would reveal advice, communications or litigation strategy. The identities were therefore not privileged in that document, and the order for its unredacted disclosure stood.

5. The declaration was too abstract and served no useful purpose. Questions of privilege should be determined by reference to particular communications and their circumstances.

6. Part 18 of the Civil Procedure Rules 1998 confers a broad power, but paragraph 1.2 of its Practice Direction confines requests to matters reasonably necessary and proportionate for preparing or understanding the case. Relevance alone is insufficient. The requested identities were, at most, peripherally relevant to attribution of knowledge years earlier. Credit Suisse already possessed extensive information about IKB’s and KfW’s roles and had shown no difficulty preparing its case. Request 17 was unnecessary and disproportionate.

Nicola Davies LJ and Sir Geoffrey Vos MR agreed with Males LJ.

• Court of Appeal (Civil Division): By [2022] EWCA Civ 1484, allowed the appeal in part. It set aside the general declaration and the order requiring an answer to Request 17, but upheld the order requiring disclosure of the engagement letter with Redaction 6 removed.
• High Court, Commercial Court: Robin Knowles J held in [2022] EWHC 1136 (Comm) that the identities of persons authorised to instruct Loreley’s solicitors were not privileged. He ordered an answer to Request 17 and unredacted disclosure of the relevant part of the engagement letter.
• High Court case management: Picken J had earlier ordered Loreley to provide the requested identities and engagement letters, subject to any properly particularised claim to privilege.