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Andrew Reeves: Five lessons about privilege in internal investigations

The English Court of Appeal’s decision in SFO v. ENRC has reset the boundaries of litigation privilege in investigations under English law.

Here’s a summary of the decision and some key practical takeaways. 

Litigation privilege. Under English law, documents are protected by litigation privilege where adversarial litigation is reasonably in contemplation and the documents in question are created for the dominant purpose of use in that litigation.

The appeal sought to overturn the lower court’s decision that various communications connected with an internal investigation (including notes of interviews and forensic accounting materials) were not protected by litigation privilege because: (i) a Serious Fraud Office investigation was not sufficiently adversarial, (ii) litigation was not in contemplation, and (iii) that in any case the documents were not created for the dominant purpose of use in the litigation. 

The Court of Appeal reversed the lower court’s decision, holding that litigation was in reasonable contemplation from the outset of the internal investigation and that the materials in question were created for the dominant purpose of resisting or avoiding contemplated criminal proceedings, and so privileged.

The Court of Appeal held that:

  • The Judge in the lower court had been wrong “to suggest a general principle that litigation privilege cannot attach until either a defendant knows the full details of what is likely to be unearthed or a decision to prosecute has been taken.” 
  • Not every SFO manifestation of concern would constitute adversarial litigation, but when the SFO specifically makes clear to a company the prospect of criminal prosecution, and legal advisers are engaged to deal with that situation, there are clear grounds for contending that prosecution is in reasonable contemplation. 
  • “Where there is a clear threat of a criminal investigation, even at one remove from the specific risks posed by the SFO should it start an investigation, the reason for the investigation of…allegations must be brought into the zone where the dominant purpose may be to prevent or deal with litigation.”

Legal advice privilege. The appellant also claimed that certain of the documents were covered by legal advice privilege. The Court of Appeal declined to interfere with the narrow definition of client under English law (i.e. that only communications between lawyers and those individuals at the corporate client authorized to seek and receive legal advice on behalf of the corporate would be protected by legal advice privilege), holding that it is properly a matter for the UK Supreme Court. 

Key takeaways

1. Companies faced with allegations of wrongdoing can conduct investigations with greater confidence that documents relating to the investigation will be protected by litigation privilege under English law. The Court of Appeal stressed that it is in the public interest for companies to be able to investigate allegations prior to reporting to a prosecutor without losing the benefit of legal professional privilege (they otherwise might be minded not to investigate at all).

2. The decision does not mean there is blanket protection for internal investigations under English law: the party asserting litigation privilege will still have to show that the dominant purpose of the communication in question related to adversarial litigation that is in progress or reasonably in contemplation.

3. Documenting the purpose and scope of an internal investigation and the justification for documents being covered by privilege is vitally important at the outset of and throughout an investigation. When assessing whether or not privilege applies, the court will consider carefully the nature, quality and content of the evidence supporting the claim for privilege.

4. The narrow definition of “client” for the purposes of legal advice privilege under English law still stands (although the Court made clear that it views this narrow definition as unworkable). Notes of interviews with witnesses who do not constitute “the client” will therefore only be privileged where litigation privilege applies.

5. Lawyers’ working papers will only be covered by legal advice privilege to the extent that they betray the tenor of legal advice. As a result, notes taken by lawyers of investigation interviews will not automatically be privileged by virtue of the fact the notes were taken by a lawyer.

For a more detailed summary, please see our firm’s briefing here.


Andrew Reeves, pictured above, is a Senior Associate based in Norton Rose Fulbright’s London office. He represents corporates, financial institutions and ‎senior executives in relation to a range of major regulatory and criminal investigations, including those brought by the UK Serious Fraud Office, Financial Conduct Authority, and Information Commissioner’s Office, as well as U.S. and various local regulators and prosecutors. He can be contacted here

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