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The Court of Appeal has handed down its much-anticipated judgment in the case of The Director of the Serious Fraud Office v Eurasian Natural Resources Corporation Limited [2018] EWCA Civ 2006. The judgment can be found here. The judgment represents a key judicial interpretation of the boundaries of litigation privilege, particularly in the context of a criminal investigation into corporate wrongdoing.

Most importantly, the Court of Appeal agreed with ENRC that the majority of the documents in question (including notes of interviews with company employees prepared by ENRC’s lawyers) were protected by litigation privilege and therefore protected from disclosure. In addition, the Court of Appeal overturned arguably the most controversial aspect of the first instance decision and found that litigation privilege can attach, even if a formal criminal investigation has not been commenced by the UK authorities.

The decision is important as it will make it easier for companies to rely on the protection afforded by litigation privilege during internal investigations conducted when a criminal investigation is in prospect. All eyes will be on the SFO to see if it makes an appeal to the Supreme Court.


In December 2010, ENRC began an internal investigation following whistle-blower allegations of fraud, bribery and corruption in Kazakhstan and an African country. ENRC began communicating regularly with the SFO from August 2011, which led to the SFO launching its own criminal investigation in April 2013. As part of its investigation, the SFO exercised its powers under section 2(3) of the Criminal Justice Act 1987, compelling ENRC to produce documents relevant to the investigation. The SFO’s powers of compulsion do not extend to documents that are subject to litigation privilege, which ENRC claimed applied to certain categories of documents (the “Disputed Documents“).

First instance decision

On 9 May 2017, the High Court held that litigation privilege did not apply to the Disputed Documents, as ENRC could not demonstrate that adversarial litigation was contemplated at the time that the documents were produced. The Court cited USA v Phillip Morris in its decision stating that, for litigation privilege to apply, it fell on ENRC to establish that, as of the date it approached the SFO, it was “aware of circumstances which rendered litigation between itself and the SFO a real likelihood rather than a mere possibility“. The Court concluded that ENRC’s claim to litigation privilege failed as, although the SFO’s investigation was in reasonable contemplation, as a point of principle a criminal investigation by the SFO should not be treated as adversarial litigation. Andrews J stated that the investigation and inception of prosecution could not “be characterised as part and parcel of one continuous amorphous process“. ENRC’s claim for legal advice privilege also failed except in respect of one category of documents.

Our alert on the original judgment can be found here.

The impact of the judgment for companies conducting internal investigations in the shadow of a criminal investigation was chilling. Most notably, it required companies seeking to rely on litigation privilege to prove that, at the time of the creation of the documents, the company genuinely considered that a criminal prosecution (rather than an SFO investigation) was reasonably contemplated and that the documents were created for the purpose of that prosecution.

The decision of the Court of Appeal

Litigation Privilege

The Court of Appeal agreed with ENRC that the majority of the Disputed Documents (including notes of interviews with employees produced by its lawyers) were protected from disclosure on the basis that the evidence proved that a criminal prosecution was reasonably in prospect when the documents were created. In addition, the Court of Appeal held that the judge at first instance was “not right 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. The fact that a formal investigation has not commenced will be one part of the factual matrix, but will not necessarily be determinative.”

The Court of Appeal also disagreed with the first instance judge on the question of the purpose for which the majority of the Disputed Documents had been created. The Court concluded that, not only was a criminal prosecution reasonably in ENRC’s contemplation, but the documents were brought into existence for the dominant purpose of resisting or avoiding those (or some other) proceedings.

Accordingly, the Court of Appeal ruled that the vast majority of the Disputed Documents were, contrary to the first instance decision, covered by litigation privilege and therefore do not fall to be disclosed to the SFO.

This aspect of the judgment is good news for all corporates and practitioners caught up in internal investigations. It is important to note that each case will remain very much driven by its own facts. Nevertheless, it should now be easier for companies to prove that litigation was reasonably in prospect at any given time – even in the absence of a formal criminal investigation by the authorities – and, therefore, that litigation privilege is triggered. Indeed, the Court of Appeal specifically recognized that it was “obviously in the public interest that companies should be prepared to investigate allegations … prior to going to a prosecutor such as the SFO, without losing the benefit of legal professional privilege.”

Legal Advice Privilege

The Court of Appeal’s decision as to whether the Disputed Documents were also protected by legal advice privilege is far less conclusive. Although the issue was, to a large extent, moot given the findings in respect of litigation privilege, the Court of Appeal stated that they were bound by the law as set down in the Three Rivers (No. 5) case. In that case, the Court held that communications between an employee of a corporation and the corporation’s lawyers could not attract legal advice privilege unless that employee was tasked with seeking and receiving such advice on behalf of the client. However (and interestingly) the Court of Appeal gave a very clear steer that, although they were bound by Three Rivers (No 5), they did not agree with it noting “if, therefore, it had been open to us to depart from Three Rivers (No. 5), we would have been in favour of doing so. For the reasons we have given, however, we do not think that it is open to us, so it is a matter that will have to be considered again by the Supreme Court in this or an appropriate future case.”

As such, the debate regarding the scope of legal advice privilege is left to rumble on, until it can be conclusively determined by the Supreme Court. In the meantime, Three Rivers (No. 5) remains good law on this point, such that the definition of the “client” remains very restricted for the purposes of legal advice privilege. As a result, care must be exercised by all companies to ensure that the concept of the “client” is carefully considered and understood at the beginning of and throughout any matter, particularly in those circumstances when litigation privilege is unlikely to apply because, for example, a prosecution (or other adversarial action) is not reasonably in prospect. As the Court of Appeal itself commented, this issue is particularly important for multinational companies operating across borders, given that English law is “out of step” on this point with the approach taken in the USA and other jurisdictions.

Further judicial consideration of this issue would certainly be welcome. In particular, we share the Court of Appeal’s concern that, under the current law as it relates to legal advice privilege, a larger, multinational company will be in a less advantageous position than a smaller entity seeking legal advice. Such an outcome is undesirable and unfair.

A more detailed alert on the Court of Appeal judgment will follow in due course, together with some practical tips that corporates can take to maximise the prospects of privilege applying. We will also be hosting a presentation on 31 October 2018 on the decision and its impact for clients. Please let us know if you have any questions or comments, or if you would like to attend the presentation.


Charles Thomson is a partner and solicitor advocate in Baker McKenzie’s Dispute Resolution Practice Group in London. He co-manages the Business Crime Unit, and is part of the Financial Institutions Disputes, Contentious Trusts and Compliance and Investigations Groups. Charles joined the Firm as a trainee in 2002, and concurrently spent three months on secondment as a judicial assistant at the Royal Courts of Justice in the Civil Appeals Division. A solicitor advocate since 2007, Charles appears as an advocate in all Higher Courts in England and Wales. Chambers and Legal 500 both commend Charles for his legal practice. Charles is also listed as a Rising Star in Litigation by Legal Week.


Jonathan chairs the firm's Financial Institutions Global Industry Group and is a partner in the London Dispute Resolution practice. Jonathan has deep experience in advising boards, executive teams and individuals dealing with issues of market integrity, ethics, brand and reputation impact, conduct risk, whistleblowing, market misconduct, systems and controls failings and remediation, public statements and investor relations, financial crime, fraud, regulatory investigation and enforcement, public policy, public law and civil and criminal litigation. Jonathan's substantial in-house experience delivers a highly strategic and commercial focus aimed at re-establishing confidence in the brand and individuals. Jonathan joined Baker McKenzie from Barclays Bank PLC. Spanning a decade of unique pressure in the financial sector amidst the global financial crisis, he led the global litigation, investigations and enforcement function and established the bank's financial crime legal team. Jonathan was responsible for a series of high-profile regulatory and criminal investigations in EMEA, the US and Asia Pacific regions and led a significant portfolio of wholesale and retail litigation. Supporting the bank's risk and compliance functions, he implemented and improved systems and controls in respect of money laundering, bribery and corruption, fraud and international sanctions. Jonathan worked with UK and US law enforcement and government intelligence agencies on counter-terrorism, organised crime and other domestic and international security initiatives. Jonathan is the contributing author to a number of leading legal and sector publications, including: Banks and Financial Crime: International Law of Tainted Money (Oxford University Press 2008, 2016); Global Investigations Review - The Evolution of Risk Management in Global Investigations (GIR 2016, 2017, 2018); and's annual Top 10 Operational Risks (2018-2022).


Joanna Ludlam is a partner in the Dispute Resolution team in Baker McKenzie's London office, where she leads the market-leading Regulatory, Public & Media law team and also co-leads the office's Compliance & Investigations Practice Group. At an international level, she co-chairs the Firm's Global Compliance & Investigations Steering Committee. In 2016, Joanna was named as one of The Lawyer’s “Hot 100” for her practice, and is recognised by Legal 500 and Chambers & Partners.


Yindi is a partner in the Baker McKenzie Dispute Resolution team based in London, and a member of the Compliance and Investigations group. Yindi’s practice includes a broad spectrum of complex and high-value international and domestic commercial litigation for multinational clients, with specialist expertise in anti-bribery and corruption investigations, compliance and trust disputes.


Henry Garfield is a senior associate in Baker McKenzie's Dispute Resolution department based in London. Henry's practice focuses on fraud, asset tracing, internal investigations and business crime. He also undertakes general commercial litigation. Henry has just completed an 11 month secondment to the Serious Fraud Office, during which he was the Case Lawyer on an investigation into a £60 million fraud. The investigation involved unravelling trust and company structures in several offshore jurisdictions and has recently resulted in two individuals being charged with fraud and forgery offences.