UK Insurance Limited v Bahader Hassankhail

The iniquity exception to legal professional privilege applies where conduct amounts to fraud or equivalent underhand conduct which abuses the professional relationship or is contrary to public policy or the interests of justice. Ordinary dishonest accounts of events in litigation do not, without more, satisfy the exception. The court must assess whether the iniquity is more likely than not on the material available, while recognising the provisional nature of an interim decision. Collateral waiver is defined by the transaction or issue for which disclosed material was deployed, subject to fairness and the need to avoid misleading disclosure. Specific disclosure depends on all the circumstances and the overriding objective, and orders should be confined and specific, particularly where privilege may have been wrongly invaded.

UK Insurance Limited sought to set aside a settlement approval order in earlier personal injury proceedings on the ground that it had been procured by fraud. The present judgment concerned three applications: specific disclosure sought by the insurer, specific disclosure sought by Mr Hassankhail, and an extension of the trial listing.

The alleged fraud concerned dishonest drug-use reporting, dishonest claims concerning capacity to manage property and affairs and litigate, and the procurement and reliance upon a false witness statement. The disclosure applications raised the iniquity exception, privilege waiver, collateral waiver, relevance, proportionality and the overriding objective.

1. Applications. The trial listing was extended by one day. UKIL’s application for specific disclosure was substantially granted. Mr Hassankhail’s application was granted in part.
2. Iniquity exception. Applying Al Sadeq v Dechert LLP [2024] EWCA Civ 28, the exception covers fraud or equivalent underhand conduct amounting to a breach of good faith or conduct contrary to public policy or the interests of justice. It does not ordinarily cover a dishonest account of events in litigation. The question is whether the conduct falls outside the normal scope of the professional engagement or abuses the relationship.
3. On the interim evidence, the court was satisfied on the balance of probabilities that prima facie iniquity was established in each of three respects: extensive and frequent drug use was dishonestly concealed from experts; capacity to manage finances and litigate was dishonestly represented; and Mr Mansour’s false evidence was procured or relied upon with knowledge of its falsity. The findings were provisional and were not intended to prejudice the trial judge after testing the evidence.
4. Collateral waiver. Applying General Accident Fire and Life Assurance Corpn Ltd v Tanter [1984] 1 WLR 100, the transaction test limited waiver to the issue or transaction in relation to which disclosed material had been deployed. Following R (Jet2.comLtd) v CAA (CA) [2020] EWCA Civ 35 and Fulham Leisure Holdings Ltd v Nicholson Graham & Jones [2006] EWHC 158 (Ch), fairness could require further disclosure where partial disclosure formed part of a bigger picture or would otherwise mislead.
5. UKIL was ordered to disclose bank and financial records, documents concerning the preparation and service of Mr Mansour’s statement, relevant instructions and advice, medical and rehabilitation records, travel documents, capacity documents, tenancy and driving-test records, and undisclosed surveillance material. Disclosure of the Aceris IT report and post-approval communications concerning the non-molestation order was refused because control, privilege or fairness had not been established.
6. The court ordered disclosure of communications and advice concerning Mr Mansour’s evidence, its significance, quantum and settlement, because privilege had been waived and full visibility was required. Orders were limited to relevant periods and categories, reflecting proportionality and the irreversibility of an erroneous invasion of privilege.

First-instance interlocutory decision. No prior appellate decision is stated in the judgment.