Post Brexit, Ireland will be the largest remaining common law jurisdiction in the EU. The position with regard to privilege is an important issue in the context of cross border litigation, and corporate and regulatory investigations spanning both the UK and Ireland.
Contracting parties weighing up jurisdiction and governing law provisions of their commercial arrangements should factor in to the approach of the Irish Courts, particularly in relation to the application of litigation privilege.
A narrow approach to litigation privilege continues in the UK based on the strict interpretation of the “dominant purpose test” in respect of documents prepared for litigation. In WH Holding Ltd v E20 Stadium LLP [2018] EWCA (Civ 2652), the EWCA held that emails between a company’s board members that had been prepared “with the dominant purpose of discussing a commercial settlement of the dispute when litigation…was in contemplation” were not covered by litigation privilege. This is because the documents did not have the purpose of obtaining advice, evidence or information, nor did they contain or reveal advice or evidence or information. They were therefore not privileged.
The Irish courts have demonstrated a broader approach to litigation privilege. A rationale for this, is to promote an environment which encourages litigants to resolve their own disputes through settlement. Mr Justice Twomey in Defender Limited v HSBC Institutional Trust Services (Ireland) Limited and Ors [2018] IEHC 587 has made it clear that the saving on court time and resources by parties settling their disputes underpins the rationale for disputing parties being able to prepare for litigation under a cloak of confidence. In other words, if the parties have matters that they wish to remain confidential and protected by litigation privilege in advance of a trial, the Irish courts will usually afford such protection up until such time as the parties give evidence.
Recent Irish case law suggests a continued willingness of the Irish courts to recognise privilege in non-traditional settings, namely in the context of regulatory investigations. Recent judgments from the UK courts have been inconsistent in recognising privilege in this domain, however, the Court of Appeal’s October 2018 decision in Serious Fraud Office (SFO) v Eurasian Natural Resources Corp. Ltd [2018] EWCA Civ 2006 appears to have corrected this position - bringing the UK more in line with the approach of the Irish courts. It has also been judicially recognised in Ireland, as in the UK, that a mere assertion of privilege or reliance on surrounding facts is not sufficient to ground a claim of privilege in the context of a regulatory investigation. Instead, evidence must be adduced to support the fact pattern being claimed.
However, the decision in Re: Sean Dunne (a bankrupt) v Yesreb Holding & anor: Celtic Trustees v Sean Dunne (a bankrupt) [2018] IEHC 51 saw the Irish courts take a narrow view in relation to the purpose for which a document is created during an internal investigation. The court held that litigation privilege did not attach to the transcript of an interview as the interview was conducted for the dominant purpose of fact finding rather than conducting litigation. Conversely, the UK Court of Appeal in ENRC did not distinguish between fact finding and preparing to conduct or resist litigation in relation to a transcript of an interview conducted as part of a regulatory investigation. The Irish court may have reached the conclusion that the interview was undertaken for investigative purposes on the basis that it was carried out under a statutory investigative order, of which investigation is the primary focus. It is likely then that the court’s refusal to recognise the transcript of the interview as privileged stemmed from the particular facts of that case, rather than a wider view that the early stages of an internal investigation are always conducted for investigative purposes and not for the dominant purpose of litigation. This fact focused approach is in step with the approach that has been taken by the UK judiciary in recent months. It is also further demonstrative of the more flexible, case by case approach that the Irish courts apply when assessing the merits of an assertion of privilege in the context of regulatory investigations.
This article was co-authored by Senior Associates Laura Pelly and Ciara Dunny.