SFO v ENRC: landmark privilege ruling by the Court of Appeal

On 5 September 2018, the Court of Appeal handed down its judgment in The Director of the Serious Fraud Office v Eurasian Natural Resources Corporation Limited and the Law Society [2018] EWCA Civ 2006, which considered the scope of legal professional privilege in internal investigations.

The Court of Appeal allowed the appeal on the question of litigation privilege, overturning the narrow interpretation applied in the High Court. It held that documents generated as part of an investigation were protected by litigation privilege.

The claim

This was a claim by the Director of the Serious Fraud Office (the SFO) for a declaration that certain documents generated during investigations by solicitors and forensic accountants into the activities of Eurasian Natural Resources Corporation Limited (ENRC) were not subject to legal professional privilege. 

The facts

In April 2013, the SFO began criminal investigations about the activities of ENRC, its subsidiaries, officers and employees focusing on allegations of fraud, bribery and corruption in two foreign jurisdictions. ENRC denied it had committed any criminal offence which warranted investigation by the SFO. 

As part of the investigation, the SFO exercised its powers and issued notices against various entities and individuals compelling the production of documents under Section 2(4) of the Criminal Justice Act 1987. The SFO's powers did not extend to documents which ENRC "would be entitled to refuse to disclose or produce on grounds of legal professional privilege in proceedings in the High Court" (see Section 2(9)). 

The issue

The Court was therefore asked to consider whether ENRC were entitled to resist the production of documents (namely notes of interviews between ENRC's lawyers and its employees (and others) together with other documents produced as part of the investigation) to the SFO on grounds of legal advice privilege or litigation privilege. 

The High Court's Decision

After hearing submissions, the Court looked at the two types of legal professional privilege: litigation privilege and legal advice privilege.

Litigation Privilege

For litigation privilege to apply:

  • Litigation must be in progress, pending or reasonably in contemplation;
  • The communications must be made for the dominant purpose of the litigation; and
  • The litigation must be adversarial, not investigative or inquisitorial.

The High Court decided ENRC's claim of litigation privilege failed because ENRC was unable to show it was "aware of circumstances which rendered litigation between itself and the SFO a real likelihood rather than a mere possibility."  The Court also decided the documents were not created with the dominant purpose of being used in the conduct of litigation. 

Legal Advice Privilege

Legal advice privilege applies to all communications between a client and the client's lawyer which have come into existence for the purpose of giving or receiving legal advice. There is no need for litigation to be contemplated.

The Court decided there was no evidence that any of the persons who were interviewed were authorised to seek and receive legal advice by ENRC and their communications with the solicitors were not communications "in the course of conveying instructions" to ENRC's solicitors.  The Court also decided there was a public interest in allowing these documents to be disclosed to the SFO.

The appeal to the Court of Appeal

After hearing submissions, the Court of Appeal decided:

On litigation privilege:

  • the High Court was wrong to decide a criminal prosecution was not reasonably in prospect once the SFO had written to ENRC;
  • because the SFO had specifically made the prospect of a criminal prosecution clear to ENRC, and legal advisers were engaged to deal with that situation, there is a clear ground for contending that criminal prosecution was in reasonable contemplation; and
  • a criminal prosecution was reasonably in ENRC's contemplation at the time the documents were brought into existence and they were brought into existence for the dominant purpose of resisting or avoiding these, or some other, proceedings;
  • the documents (except for two emails) were therefore covered by litigation privilege;

On legal advice privilege:

  • the Court of Appeal was unable to overturn this part of the judgment because it was bound by the judgment in Three Rivers (No 5);
  • therefore, communications between an employee of a corporation and the company's lawyers could not attract legal advice privilege (unless that employee was tasked with seeking legal advice for the company);
  • but there was "much force" in ENRC's case, and had it been open for them to depart from Three Rivers (No 5), they would have done so.


This is a welcome and pragmatic decision from the Court of Appeal.  It recognises the importance of companies being in a position to investigate before going to a prosecutor without losing the protection of legal professional privilege.

The issue of the scope of legal advice privilege (and a decision to depart from the principles in Three Rivers (No.5) remains to be reconsidered by the Supreme Court (whether in this case of some other suitable case).  It therefore remains to be seen whether a more sensible conclusion will be reached on legal advice privilege.

For more information please contact Russell Kelsall (Partner), Warren Clark (Partner), Alanna Tregear (Associate), Sam McCollum (Associate) or Dominic Pinder (Solicitor).

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at September 2018. Specific advice should be sought for specific cases. For more information see our terms & conditions.

Date published

10 September 2018


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