NMC Health PLC v Ernst & Young LLP

For a claim to litigation privilege, documents containing privileged information or advice remain covered where that material cannot be disentangled from the remainder, or where disclosure would otherwise reveal it. The precise wording used to describe that approach is immaterial. What matters is whether the evidence demonstrates that the correct analysis was applied. Evidence supporting a privilege claim should also identify the relevant analysis and, for litigation privilege, the purpose for which the documents were created. Where the evidence is insufficiently clear, the court may require a further witness statement clarifying the basis of the claim before determining the issue.

This was an interlocutory ruling concerning 18 regulatory documents produced by NMC Health PLC’s joint administrators in communications with UK and US regulators. NMC claimed litigation privilege, and in part legal advice privilege, over presentations, letters, emails and attachments containing material derived from its investigation into alleged fraud and prospective claims against Ernst & Young LLP.

The issue was whether the evidence sufficiently explained why documents created for regulatory investigations were nevertheless covered by privilege because they reflected or revealed privileged investigation material. The court considered the approach in WH Holding Limited v E20 Stadium LLP and the evidential requirements discussed in West London Pipeline and Storage Limited and Others v Total UK Limited and Others.

1. Approach to mixed documents. The court accepted that the approach described by the Court of Appeal in WH Holding Limited v E20 Stadium LLP was the relevant approach: documents are covered where privileged information or advice cannot be disentangled from the remainder, or where the document would otherwise reveal that information or advice. The use of the word “reflecting”, rather than the precise language of the Court of Appeal, did not determine the issue.
2. Evidence supporting privilege. The court considered the requirement, identified in West London Pipeline and Storage Limited and Others v Total UK Limited and Others, that evidence claiming privilege should be sufficiently specific to show something of the deponent’s analysis of the documents and, in a litigation privilege claim, the purpose for which they were created.
3. Application to the evidence. The witness evidence described the regulatory presentations as a current snapshot of the administrators’ investigations and distinguished legal advice privilege from litigation privilege. The judge had a strong sense that the witness had the correct approach in mind, including an apparent inability to disentangle the privileged litigation material. However, the evidence did not state the analysis in sufficiently specific terms to resolve the point finally.
4. Procedural order. The court directed the claimant to serve a further witness statement confirming and clarifying that the inseparability approach had been applied. The ruling did not finally determine whether the documents were privileged.