Loreley Financing (Jersey) No 30 Ltd v Credit Suisse Securities (Europe) Ltd  EWHC 1136 (Comm)
In this case, the High Court dealt with the novel question of law as to whether the identity of the persons who are authorised to give instructions to solicitors on behalf of a corporate client in ongoing litigation a matter which is covered by litigation privilege.
The Claimant (‘Loreley’) brought proceedings for fraudulent misrepresentation and unlawful means conspiracy in relation to its purchase of purchase of US$100m of notes, which formed part of a collateralised debt obligation transaction, from the Third Defendant in 2007.
The Defendants (‘Credit Suisse’) raised a limitation defence, which raised the issue of what facts and matters relevant to its claim Loreley knew or could with reasonable diligence have discovered before November 2012 or 2015.
Loreley was an SPV with no employees. Its directors were ‘supplied’ by a professional services company. Credit Suisse contended that, in reality, the decisions of Loreley were made by two German banks: IKB Deutsche Industriebank AG (‘IKB’) and its successor, Kreditanstalt fur Wiederaufbau or KfW Bankengruppe (‘KfW’) (together, ‘the Banks’), albeit then formally approved by directors. Credit Suisse therefore contended that the knowledge of the Banks was relevant to the issue of limitation and, as part of this, alleged that KfW initiated the present proceedings and appeared to be providing instructions to Loreley’s solicitors (‘RPC’) on behalf of Loreley.
A Part 18 Request from Credit Suisse asked Loreley to confirm whether this was the case. Lorerely declined to do so on the grounds “the that information sought is irrelevant and ‘by its nature, subject to legal professional privilege’”.
The Present Application
Accordingly, Credit Suisse made an application for orders that “the names of the individuals who are, or have been, authorised to give instructions to RPC in relation to the litigation are not subject to [legal professional privilege];” that Loreley provide a full response to the relevant CPR Part 18 Request; and that certain documents provided by Loreley with redactions be provided without those redactions.
Before the court, Loreley accepted that the question who gives instructions on behalf of Loreley to RPC is “relevant [as a small building block] for Credit Suisse’s contention that the claims against it are time barred”. The sole issue was, therefore, legal professional privilege
Accordingly, Credit Suisse sought Orders: that “the names of the individuals who are, or have been, authorised to give instructions to RPC in relation to the litigation are not subject to [legal professional privilege];” that Loreley provide a full response to the relevant CPR Part 18 Request; and that certain documents provided by Loreley with redactions be provided without those redactions.
For Credit Suisse, it was argued that “because legal professional privilege protects communications not facts, the identity of the person giving instructions to a lawyer is not privileged.” There may be some ‘exceptional’ circumstances where the identity of a client can be said to be an integral part of a confidential communication, but no such exceptional circumstances applied in the present case: Credit Suisse simply wanted to know who was party to communications “privileged or otherwise” between RPC and Loreley.
For Loreley, it was submitted that “the identity of those authorised to provide instructions is in itself an aspect of those instructions,” and as such, is within a “zone of privacy” around a party’s preparation for litigation. Loreley described Credit Suisse’s position as “in effect, inviting the Court to create an exception to the application of [litigation privilege], such that it would cover all aspects of a party’s preparation for litigation except the identity of the persons authorised to give instructions”.
The Authorities and Legal Principles
Robin Knowles J CBE (‘the Judge’) examined the relevant authorities on legal professional privilege and summarised the key principles as follows:
- Legal professional privilege is “a single integral privilege, whose sub-heads are legal advice privilege and litigation privilege” (Three Rivers DC (No. 6) v Bank of England  UKHL 48,  per Lord Carswell. The two sub-heads “have different characteristics” (SFO v Eurasian Natural Resources Corp Ltd  EWCA Civ 2006, - per Sir Brian Leveson PQBD, Sir Geoffrey Vos CHC and McCombe LJ).
- The policy underpinning legal advice privilege is that “a client must be free to consult his legal advisers without fear of his communications being revealed (R v Cox and Railton (1884) 14 QBD 153. Legal advice privilege applies to communications between a lawyer and the client for the purposes of obtaining legal advice, “notwithstanding that they do not contain advice on matters of law or construction, provided that they are directly related to the performance by the solicitor of his professional duty as legal adviser of his client” (Reassurantie Groep Holding NV v Bacon & Woodrow Holding  1 All ER 976, 982)
- Litigation privilege serves a different purpose. Its underlying policy is that, in adversarial proceedings, “each party should be free to prepare his case as fully as possible without the risk that his opponent will be able to recover the material generated by his preparations” (Three Rivers DC (No 6) v Bank of England  UKHL 48,  per Lord Rodger). Litigation privilege can extend to communications with third parties provided that litigation to be in existence or in contemplation, the sole or dominant purpose is of conducting that litigation, and that litigation is adversarial.
- In principle, there is no reason why legal advice and litigation privilege cannot apply to the same communications. The Judge commented, however, as legal advice privilege will apply to legal advice so that it is not necessary to claim litigation privilege too.
- The simple provision of an individual’s name, address, and contact details to a lawyer cannot, without more, be regarded as having been made in connection with legal advice for the purpose of privilege. Such provision and recording of details is a formality that occurs before the legal advice is sought or given (R (ex p Miller Gardner Solicitors) v Minshull Street Crown Court  EWHC 3077).
- There are some circumstances in which the identity of the client will be protected by privilege. For example, SRJ v Persons Unknown (being the author and commenters of Internet blogs) and D&Co  EWHC 2293 (QB) concerned the disclosure of the identity of the client, who was an anonymous blogger. Here, the client’s identity was not a routine communication, but the very information that linked him to the case and potential liability to the Claimant, who was keen to establish his identity. Also, BTA Bank v Ablyazov  EWHC 1252 (Comm) concerned the disclosure of a channel of communication by phone and email. In that case, Teare J observed, at , that “the connection between the telephone number and the email address and the seeking and receiving of legal advice in the present case is clear and manifest”.
From these, the Judge identified two requirements to be met when answering the question of whether the identity of a person communicating with a lawyer is privileged: (i) whether the communication itself is privileged; (ii) whether that privilege will be undermined by the disclosure of identity sought.
The Judge recognised that all of the cases recognised the potential for client identity to be required to be disclosed, and none of the cases suggested that there are no circumstances in which client identity can be required to be disclosed. Each case, therefore, requires a decision on its facts. Where, for example, there are limitations or restrictions on the matters than an individual is authorised to give instructions, answers on the identity of that individual would trespass into an answer on the content of those instructions.
However, in the present case:
- Loreley had adduced no evidence that “the revelation of the identity of the person giving instructions would … “give clues” as to the content of particular instructions,” and it was no answer for Loreley to state it could not do so because it would be “impossib[le] to descend into the particular facts without waiving privilege.” A party may be entitled to claim privilege on the basis that, on the specific facts and in the particular circumstances of the case, it cannot disclose the information of who gives instructions without waiving privilege over the content of the instructions. However, this was not the position taken by Loreley in the present case.
- the Request could not be characterised as a fishing expedition: was common ground on the application that the information sought related an issue to be resolved at trial in the case.
- There was no suggestion in the present case that the identity of the persons authorised was only available from privileged communications.
The Judge therefore concluded there was nothing in the present case to show that privilege would be undermined by disclosure of the identity sought by Credit Suisse.
This case draws attention to complex conceptual issues relating to the scope of legal professional privilege, and usefully summarises some of the basic principles underpinning its two forms. Although it also gives helpful guidance as to when identity of the persons who are authorised to give instructions to solicitors on behalf of a client is covered by litigation privilege, the complexity of the issues at hand are illustrated by the fact that an appeal has already been reported as currently outstanding.
Of particular note is the fact that the Judge enunciated what has potential to develop into a recognized, two-stage ‘test’ of wider application, applying as much where the person communicating does so as a person authorised to give instructions to the lawyer on behalf of the lawyer’s client as where that person has a different role. It will, therefore, be well worth keeping an eye on the appeal.
Article by Joshua Griffin and Amy Held.