14th January 2019
West Ham Football Club entered into an agreement with E20, owners of the London Stadium, to use the venue for its home football matches. A dispute arose as to the number of seats in the stadium West Ham was entitled to use. West Ham wished to inspect six emails passing between the E20 board members and stakeholders which discussed a commercial proposal for the settlement of the dispute. E20 resisted the disclosure application on the basis that the emails were privileged.
It was common ground that in order to fall within the ambit of litigation privilege, the documents must at least have been produced for the "dominant purpose" of conducting that litigation.
Privilege allows a party to withhold a document from production, or disclosure, to a third party or the court. In general, privilege cannot be claimed unless the evidence is confidential. The purpose of privilege is to allow lawyers to provide confidential advice to their own clients. Litigation privilege arises from the principle that a potential or actual litigant is free to enter into communications seeking evidence for the purposes of litigation which must be “… in progress or in contemplation”; the litigation must be adversarial and not investigative; and must be made for the dominant purpose.
In this case, the issue was whether or not litigation privilege extended to documents concerned with settlement or avoidance of litigation. West Ham argued that as the emails were not directed at obtaining evidence or advice, they did not fall within the scope of privilege.
The Court of Appeal agreed with E20 that "conducting litigation" encompassed avoiding or settling litigation. However, the court did not find that litigation privilege extended to "purely commercial discussions". Litigation privilege does not cover all documents brought into existence for the purposes of “actual or contemplated litigation”. The courts should be able to decide disputes with the aid of all relevant material. The court fully accepted that the document revealing the nature of advice or litigation would be privileged.
E20 claimed privilege by arguing that the dominant purpose the emails were created for was to discuss “… a commercial settlement of the dispute when litigation with West Ham was in contemplation". The court found that a claim for privilege on such terms did not fall within the scope of litigation privilege, and allowed West Ham's appeal entitling West Ham to inspect the documents.
In summary, not all internal corporate communications are covered by a "blanket" of litigation privilege, even if those communications were deemed to be confidential. Therefore, companies and their employees must consider carefully the subject matter of their internal discussions with regard to litigation which is "in progress or contemplation", and the records created of such discussions, including emails and minutes of meetings.