Flowcrete UK Limited & Ors. v Vebro Polymers UK Limited & Ors.

Where privileged documents have been disclosed and read by the opposing party, the court must distinguish between whether the documents are privileged and whether they were disclosed by an obvious mistake. Relief is available only where the mistake would have been obvious to the recipient or a reasonable solicitor in that position, applying the principles in [2002] EWCA Civ 780. Even then, the court retains an equitable discretion and must ask whether restraint would be just and equitable. Potential wrongdoing may justify refusing relief where it would be unconscionable to restrain use of the material. A party seeking relief must establish inadvertent disclosure. Delay, context, document presentation and the absence of obvious privilege markers may be relevant to obviousness.

The defendants applied for injunctions preventing the claimants from using specified documents, requiring their destruction and granting ancillary relief. The documents had been disclosed within two large PDF compilations during extended disclosure. The defendants asserted litigation privilege and inadvertent disclosure.

The claimants accepted, for the purposes of the application, that the documents could be treated as subject to litigation privilege. The issues were whether the defendants had established inadvertent disclosure, whether any mistake was obvious, and whether it would nevertheless be unjust or inequitable to restrain use of the documents. The defendants also sought indemnity costs and a wasted costs order against the claimants’ solicitors.

1. Application dismissed. The defendants failed to establish that the disputed documents had been inadvertently disclosed. The evidence did not explain why the documents had been included in the compilations or why the compilations had been disclosed when they were not privileged as compilations.
2. The court adopted the distinction in Al Fayed v Commissioner of the Police of the Metropolis [2002] EWCA Civ 780 between privilege and obvious mistake. The question was not whether it was obvious that the documents were privileged, but whether a reasonable solicitor would have realised that an obvious mistake had been made. The two-limbed approach in that decision applied.
3. Even if inadvertent disclosure had been established, the mistake was not obvious. The PDF format, the disclosure-exercise email address and the documents’ location within compilations containing plainly non-privileged material did not put the claimants on notice. The documents were not marked privileged or without prejudice, lawyers were not copied on the correspondence, and the defendants themselves took time to identify the alleged mistake.
4. The court accepted the approach in Pickett v Balkind [2022] EWHC 2226 (TCC). In exercising the equitable jurisdiction, the court may refuse to restrain use where the disclosed material reveals wrongdoing or inappropriate conduct and it would be unconscionable for the recipient to rely on it. The test differs from the separate question whether privilege never attached because the document evidences iniquity.
5. The categories of documents concerning the preparation of a witness statement raised sufficient questions about possible influence on the evidence to amount to unconscionable conduct. The other categories did not reach that threshold. The delay in asserting privilege would not alone have justified refusal if the other requirements for relief had been satisfied.
6. The claimants were granted permission to use the disputed documents. The application for a wasted costs order was rejected.