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Legal Professional Privilege – SFO v ENRC
12 Feb 2019
Article by: Zaki Hashmi



The Court of Appeal’s recent judgment in Director of the Serious Fraud Office v Eurasian Natural Resources Corporation Limited [2018] EWCA Civ 2006 has been welcomed by the legal profession and is of benefit to all organisations potentially facing criminal investigation. This article sets out to explain how this case affects the operation of legal professional privilege.


Legal professional privilege

There are two categories of legal professional privilege which protect the client-lawyer relationship.

Litigation privilege covers communication, between a lawyer and their client, agent, or any third party, made in connection with or in contemplation of legal proceedings. If you are the subject of proceedings in the civil or criminal courts then you can expect all such communication to remain private and confidential between yourself and your lawyer.

Litigation privilege will obviously apply once legal proceedings have commenced but it will also apply when legal proceedings are reasonably contemplated in future.

Legal advice privilege covers communications between a lawyer and their client/agent made in connection with the giving of legal advice. This ensures that discussions with your lawyer remain private and confidential, regardless of whether or not any court proceedings are taking place.

In SFO v ENRC the Court of Appeal extended the scope of litigation privilege to the advantage of the client.  The Court also made some interesting and significant observations on legal advice privilege, but did not change the relevant law.


The facts of the ENRC case

In December 2010 the Eurasian Natural Resources Corporation received an email from a whistle blower alleging serious corruption within its subsidiary company in Kazakhstan. ENRC instructed lawyers to investigate the allegations. As part of the investigation a substantial body of documentation was prepared from a large number of employees, former employees and third parties.

In August 2011 the Serious Fraud Office contacted ENRC and stated that, while they were not carrying out a criminal investigation at this stage, ENRC should consider carefully the SFO guidelines relating to the self-reporting of criminal activity.

In April 2013 the SFO announced that there would be a criminal investigation of ENRC. They applied for disclosure of the whistle blower investigation documents and argued that these documents were not subject to either litigation privilege or legal advice privilege.

In 2017 the High Court found in favour of the SFO, concluding that when they contacted ENRC in August 2011 a criminal prosecution was not reasonably in contemplation, and that consequently the documentation sought by the SFO was not subject to any form of legal professional privilege.

The High Court determined that, since ENRC could not have known whether or not criminal proceedings were likely after the whistle blower’s allegations were first brought to their attention, it could not be said that ENRC were in reasonable contemplation of criminal proceedings arising in the future.

The High Court further stated that litigation privilege did not include documents created in order to obtain legal advice on how best to avoid future litigation.

Consequently the whistle blower investigation documentation was not subject to legal professional privilege and must be disclosed to the SFO.


The Court of Appeal’s decision on litigation privilege

The Court of Appeal rejected the High Court’s line of reasoning and stated that

“in the present case the uncertainty [as to whether or not criminal proceedings were likely] was a function of ENRC not having the information required to evaluate the whistle blower email. An individual suspected of a crime will of course know whether he has committed it. An international corporation will be in a different position…We think the [High Court] judge was wrong to regard the uncertainty as pointing against a real likelihood of a prosecution…It would be wrong for a potential defendant to be denied the benefit of litigation privilege when he asks his solicitor to investigate the circumstances of an alleged offence.”

The Court of Appeal concluded that when it commenced its internal investigation in December 2010 ENRC did have the prospect of criminal proceedings reasonably within its contemplation; and that by the time the SFO first made contact in August 2011 such criminal proceedings were certainly in contemplation. It followed that the correspondence, emails and other documentation prepared during that investigation was subject to litigation privilege and need not be disclosed to the SFO.

The Court of Appeal also rejected the distinction, made by the High Court, between seeking legal advice in anticipation of criminal proceedings, and seeking advice to avoid proceedings. Both were covered by litigation privilege.

The Court of Appeal also made the important point that

“it is obviously in the public interest that companies should be prepared to investigate allegations from whistle blowers or investigative journalists, prior to going to a prosecutor such as the SFO, without losing the benefit of legal professional privilege…Were they to do so, the temptation might well be not to investigate at all, for fear of being forced to reveal what had been uncovered…”


The Court of Appeal’s non-decision on legal advice privilege

The Court of Appeal did not pass judgment in SFO v ENRC on the operation of legal advice privilege, stating that its hands were tied by the case of Three Rivers District Council and Others v Governor and Company of the Bank of England (No.5) [2003] QB 1556.

Three Rivers (No.5) concerned the nature of the lawyer-client relationship where the client was an organisation and not an individual. Consideration was given to which persons within an organisation would receive the benefit of legal advice privilege.

It was determined in Three Rivers (No.5) that communication between an employee and lawyer would only attract legal advice privilege if the employee were tasked with seeking and receiving legal advice on behalf of the organisation client. Legal advice privilege would therefore arise in respect of some, but not all, employees.

Three Rivers (No.5) has remained a controversial decision, since such restrictions on the lawyer-client relationship is capable of causing difficulty for large organisations. The Court of Appeal noted in ENRC that it could not depart from the ruling in Three Rivers (No.5) but made it clear that it did not agree with it.

The current law has the paradoxical effect of making it more likely that a smaller organisation will enjoy the protection of legal advice privilege than a larger organisation, where there will be larger numbers of employees, and where the persons capable of providing important information to the organisation’s lawyers may not be “tasked with” seeking or receiving legal advice.

The Court of Appeal concluded that

“If the ambit of Three Rivers (No.5) is to be decided differently that decision will, in our judgment, have to be made by the Supreme Court rather than this court.”



The Court of Appeal’s decision in ENRC has been praised by the Law Society president, Christina Blacklaws, who stated that

“If the High Court ruling had been upheld, any organisation facing a prosecution could have to turn over private communications with their lawyers. The rule of law depends on all parties being able to seek confidential legal advice without fear of disclosure.”

The Serious Fraud Office announced that they would not be seeking to overturn the Court of Appeal’s ruling in ENRC to the Supreme Court.

Given that Three Rivers (No.5) has now been law for over 15 years it remains to be seen whether the Supreme Court will ever address the concerns raised by the Court of Appeal in ENRC, and provide organisations and their lawyers with a welcome broadening of the ambit of legal advice privilege.


The Law Society Article can be found on this link: https://www.lawsociety.org.uk/communities/the-city/articles/successful-law-society-intervention-in-privilege-case/

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