Clements -V- Frisby - unintentional waiver of privilege is not In The Style!

It is commonly known that, in a legal dispute, parties can confidentially receive advice on the merits of their case and the strength of their argument under the notion of ‘legal professional privilege’, which permits evidence to be withheld from production to a third party, even in court.

It is also common for parties, upon the receipt of privileged legal advice which is beneficial to their case, to assume control and deliberately inform the opposing party of the strength of their case, referring to the existence of the legal advice received.

Although the intention of the relevant party is likely to be as simple as asserting the strength of their position and seeking to intimidate the other side it carries a high risk that the opposing party will seek to have that advice on the merits of their case, and potentially other privileged communications with lawyers, disclosed. This is a collateral waiver of the legal professional privilege, often referred to as the cherry-picking rule, and can be fatal to a party’s case.

The Legal Dispute

The judgment in the recent case of Paul Clements -v- Adam Frisby [2022] EWHC 3124 (Ch) adds to this tricky area of law and provides guidance to practitioners on how to minimise the risk of waiving privilege, particularly in the case of its utilisation in preparation of witness evidence. 

In Clements -v- Frisby, the claimant contended that the defendant stole his original business concept for the online fashion brand ‘In The Style’. The claimant was therefore seeking a declaration that the defendant held the business on trust for the claimant. The defendant denied that the claimant had any involvement in the invention of the business idea, which was supported by the claimant’s lack of activity in pursuing a claim against the defendant for several years. 

The claimant stated in his witness statement that his reason for failing to pursue legal proceedings against the defendant, until this point, was a result of legal advice he had received which informed him that the fashion business did not appear to be of value and consequently did not present a target worth pursuing. 

The Decision

The High Court held that the claimant’s reference in his witness statement to the time taken by his solicitors in progressing his claim against the defendant constituted as collateral waiver of privilege. The court determined it was appropriate to order disclosure of supporting documentation relating to the privileged legal advice given to the claimant as the advice was potentially relevant to the substantive merits of the case. 

The judge applied the leading case law in PJSC Taftnet -v- Bogolyubox [2020] EWHC 3225 and held that weight was given to whether there had been reliance on the communication to advance the party’s case on an issue that the court had to decide.

The substantiated point is that a waiver cannot arise if the reference is to the effect of the legal advice, rather than the content. In this case, the claimant’s witness statement not only made reference to the fact that legal advice had been given, but fundamentally made reference to the content of the legal advice itself. Though the judge disagreed with the defendant’s contention that the waiver extended to all of the documentation containing legal advice provided to the claimant, it was held that the waiver applied to the transaction document. 

The judge also rejected the idea that a reference to the subject matter of a privileged communication, as opposed to details of its content, was unlikely to be viewed as a waiver.

Approach to Waiver of Privilege 

This case aptly highlights the dangers of litigants referring to legal advice, in witness statements, pleadings and submissions, when advancing their case. Nevertheless, the court has distinctly applied and adopted a nuanced and fact-specific approach in determining whether the waiver principle has been engaged, and in the instance that it has, to what extent that waiver applies.

Ultimately, for a waiver of privilege to arise, there must be:

1. reference to the contents of the legal advice
2. relevance to an issue which the court has
3. the party purporting privilege has been waived must put forward a positive argument in reliance on the privileged material.

Comment

Parties should act with caution if they openly rely on any privileged material within legal proceedings. Legal advice should not be used as a bargaining chip, as it can result in the inadvertent waiver of not only the documentation specifically referred to, but can extend far further too.

For more information on this topic please contact Callum Powell and Tasha Millar.