B e f o r e :
MR JUSTICE MANN
MR. I. CROXFORD Q.C. and MR. M. CANNON (instructed by Messrs. Kendall Freeman) for the Claimant.
MR. R. STEWART Q.C. and MR. H. EVANS (instructed by Mayer, Brown, Rowe & Maw LLP) for the Defendant.
Hearing date: 30th January 2006
HTML VERSION OF JUDGMENT
Crown Copyright ©
Mr Justice Mann :
- This judgment gives reasons for the decision that I made on 31st January 2006 when I declined an application made by the defendants in this case with one relatively minor qualification. The disclosure sought covered legal advice given by counsel and solicitors to the claimant across a period of some four months at the end of 2001 and at the beginning of 2002. It arises in the following circumstances.
- This action is a claim for professional negligence, brought by the claimant against solicitors who were acting for it when it purchased an interest in Fulham Football Club in 1997. The negligence is said to have arisen because the defendants allowed the transaction to complete on a footing which gave minority shareholders greater rights than it is said they should have had. It is said that that was neither agreed nor pointed out to the claimant. The details of all that do not matter for present purposes. In the period in question, the claimant was taking advice in relation to its position vis-à-vis the club and the minority shareholders. On 11th October 2001, Mr Benson, a solicitor and consultant who was advising the claimant in relation to those matters, instructed Mr Michael Briggs QC to give some advice on the construction and effect of the documents in question. He gave that advice in consultation on 11th October 2001. The attendance note of that consultation, and the instructions which gave rise to it, have been voluntarily disclosed by the claimant, and indeed the advice is referred to in its particulars of claim and in various witness statements. The claimant has also disclosed the "slides" of an electronic slide show prepared and presented by Messrs DJ Freeman, who were solicitors acting for the claimant at that time, that show having been made on an occasion on which a presentation was made to Mr Mohammed Al Fayed (who for these purposes can be taken as controlling the claimant) on 4th December 2001.
- One element of the claim made by the claimant in this case is the amount of legal professional fees spent in trying to sort out the position with the minority shareholders. In that context, and late in the day, the claimant has disclosed invoices from DJ Freeman and fee notes from counsel, from which it is now apparent that there was greater involvement of solicitors and counsel than merely their involvement in giving advice on the two occasions just referred to. For example, it is apparent that Mr Briggs was involved on a date after the date on which he gave advice, and junior counsel was acting as well (as indeed was anticipated by the attendance note of the consultation with him). The nature of the involvement of the lawyers, other than that referred to above, is not apparent from any of the material disclosed because it has been redacted. All that one can see is that the lawyers were acting in relation to the claimant, and it is said that they were so acting in matters relevant to this action. It has therefore been made apparent to the defendants that other legal advice was taken, and other legal services rendered, in connection with the matters on which Mr Briggs and DJ Freeman can be seen to have advised. A short witness statement has been provided by the claimant in this context, from a Ms Robson (a partner in the claimant's current solicitors), who confirms that counsel were instructed to draft and advise in relation to the preparation of legal proceedings which were not issued and to which the defendant was not an intended party, and that neither Mr Briggs nor junior counsel instructed with him in due course were instructed to revisit the advice given by Mr Briggs on 11th October 2001.
- As a result of the disclosure of that material, the defendants advanced the contention, several days into the trial, that the claimant has waived privilege in a category of documents, thus opening them up to disclosure and inspection. The category is described in Mr Stewart's skeleton argument as follows:
"The documents setting out or recording the instructions received and/or work done and/or advice given by Mr Briggs, Mr Marshall and DJ Freeman in relation to the claimant's dispute with the Muddymans in the period 2nd October 2001 to 31st January 2002 as set out on the invoices and fee-notes disclosed for the first time on the evening of 19th January 2006."
The invoices are then more specifically identified.
- It should be noted that disclosure is not sought on the footing that the cost of obtaining that legal advice forms part of the damages claimed in this action. Mr Croxford QC, who appears for the claimant, has relied on Paragon Finance plc v Freshfields  1WLR 1883 as authority for the proposition that he has not waived privilege in such documents merely by making a claim for the cost of the legal advice. Mr Roger Stewart QC, who appears for the defendants, does not advance his claim on that basis. Instead, Mr Stewart advances his claim on the basis that there has been a waiver of privilege because of the disclosure of documents that has taken place, and because of the reliance on those documents. I have already indicated what documents have been disclosed. The reliance placed on them is as follows:
(i) In paragraph 46 of the particulars of claim, the advice given by Mr Briggs in consultation is summarised in a number of sub-paragraphs. Paragraphs 47 and 48 go on to plead the consequences of that in terms of the position in which the claimant claims to have found itself.
(ii) One of the witnesses in this case is Mr Benson himself. He gave evidence in general terms which confirmed that the references in fee notes which we see to Mr Briggs acting further, and his junior acting further, related to the present matter. That of itself cannot amount to a waiver, not least because Mr Benson, in giving that evidence, is not acting on behalf of the claimant, and Mr Stewart does not rely on that act as being part of the waiver. However, in his witness statement he refers to going to Mr Briggs for advice, and in one sentence summarises Mr Briggs' view.
(iii) In his second witness statement he refers again in general terms to going to see Mr Briggs to take his advice "in the circumstances I mentioned in paragraph 38 of my first witness statement. Thereafter DJ Freeman (as they then were) prepared a presentation to [Mr Al Fayed]….on the ways forward regarding the dilution issue, which took place in December 2001."
(iv) Mr Byrne, another witness, refers in his witness statement to advice in general and historical terms. He merely recites that Mr Benson went to get advice from DJ Freeman. There are later references to advice taken the next year from another leader, but that does not matter for present purposes.
(v) Mr Fallowfield, financial controller for the Harrods Group, has provided a witness statement in which he refers to the fact that Mr Benson sought advice from Mr Briggs and that further discussions with Mr al Fayed culminated in a meeting with a partner at DJ Freeman on 4th December 2001.
Of those witnesses, Mr Benson was part way through his oral evidence when this issue arose. The other two gentlemen had not yet given evidence.
- In addition to that material, Mr Stewart also sought to rely on the way the case was put in Mr Croxford's opening written argument. At paragraph 123 of that document, Mr Croxford drew attention to the fact that Mr Benson decided to seek advice from Mr Briggs and summarised parts of it. It contains the sentence:
"Mr Benson's Instructions are at E17/51- 53 and contain a helpful and important summary of Mr Benson's understanding and recollection in 2001 of the negotiations in 1997." (his emphasis)
Paragraph 124 lists various points that came out of the consultation and paragraph 125 summarises the situation as at that date, with Mr Briggs having advised. Paragraph 126 says very shortly that in the following months the claimant and Mr al Fayed considered what to do, and draws attention to the DJ Freeman slide show as being a "relevant document".
The arguments on privilege
- Put shortly, the arguments of the respective parties on this point are as follows. Mr Stewart says that what has been disclosed in relation to the legal advice sought in the four months in question is a partial disclosure, or a partial selection of otherwise privileged material. He points out that the claimant seeks to rely upon it to support its assertions that its conduct was reasonable, to support what was Mr Benson's understanding and recollection in 2001 and to support what it says was the commercial position in negotiations which took place in 2002 when the minority shareholders were bought out. Since it was only partial disclosure, the doctrine of fairness comes into play, and fairness required that they and the court should see all the relevant material relating to advice so that it can be seen that the selection of material represents the whole of the material relevant to the issue just referred to. In support of this entitlement, he relies on R v Secretary of State for Transport Ex parte Factortame (CA unreported 7th May 1997). In that case Auld LJ referred to the leading authority of Nea Karteria Maritime Co Ltd v Atlantic & Great Lakes Steamship Corp  Comm LR 138 and referred to the dangers of a party being allowed to cherry pick which bits of privileged material he did and did not disclose. Mr Stewart relied on the fact that Auld LJ said:
"It also extends to attempted partial waiver of privilege in respect of certain of a number of documents relevant to the same issue or transaction. Of course, the scope for unfairness depends on the breadth of the matter in issue or their severability if more than one, and on the exact relationship and/or relevance to such issue(s) of the documents respectively disclosed and sought to be withheld."
He said that this authority justified resolving the present situation by reference to the principle of fairness.
- He also relied on J Sainsbury plc v WSP Consulting Engineers plc  EWHC 2610. That case involved partial redaction of various documents. HHJ Seymour QC, sitting in the TCC, had to consider whether various redacted parts should be disclosed. He set out passages from the two authorities I have referred to above, and stated that they contained the principles that he was going to apply. He then applied them and concluded that in some respects the disclosure created a partial or misleading picture.
- Mr Croxford submitted that Mr Stewart's case proceeded from the wrong starting point. He said that the first thing to do was to identify the "transaction" in relation to which disclosure had been given. Once that had been identified, then the court had to consider whether proper disclosure had been given in relation to that transaction. It was only at that point that questions of fairness came into play. It would come into play if, in relation to that transaction, the level of disclosure was such as to make the material misleading or its deployment unfair.
The relevant principles and their application to this case
- The first thing that has to be identified is the correct starting point. Mr Stewart's starting point is to treat the disclosure that has been made as partial, but a partial disclosure pre-supposes that there is a relevant greater whole. For example, the advice of Mr Briggs will be part of the totality of all the advice given by him; it is also a part of all the advice given by counsel; it is also a part of all the legal advice given in the period in question. The first thing to do is to identify what that greater whole is, in the context of this case.
- Based on the authorities which I am about to refer to, it seems to me that the relevant process should be as follows:
i) One should first identify the "transaction" in respect of which the disclosure has been made.
ii) That transaction may be identifiable simply from the nature of the disclosure made – for example, advice given by counsel on a single occasion.
iii) However, it may be apparent from that material, or from other available material, that the transaction is wider than that which is immediately apparent. If it does, then the whole of the wider transaction must be disclosed.
iv) When that has been done, further disclosure will be necessary if that is necessary in order to avoid unfairness or misunderstanding of what has been disclosed.
That chain is not articulated in terms in the authorities to which I am about to refer, but it seems to me that it is apparent from it.
- The starting point to me seems to me to identify what Hobhouse J called the "transaction" in General Accident Fire and Life Assurance Corp Ltd v Tanter  1 WLR 100. In that case Hobhouse J was dealing with a wide ranging request for disclosure and inspection of otherwise privileged documents (covered by legal professional privilege), on the basis of use of one note at a trial. Hobhouse J refused to order that disclosure, and in the course of his judgment he considered the then existing authorities on the point. At page 111 he cited part of the judgment of Cotton LJ in Lyell v Kennedy 27Ch D1, which he described as "the cardinal quotation":
"There was this contention raised, which I have not forgotten, that the defendant had waived his privilege, and therefore could not claim it at all. That, in my opinion, was entirely fallacious. He had done this, he had said 'Whether I am entitled to protect them or not I will produce certain of the documents for which I had previously claimed privilege – I will waive that and I will produce them' but that did not prevent him relying on such protection with regard to others which he did not like to produce. It is not like the case of a man who discloses part of a conversation and then claims protection for the remainder, and we think there is no ground for the contention that there has been here a waiver of privilege."
- It is apparent from that that it is open to a party to disclose some but not all of the documents falling within a privileged category. If further authority for that proposition is required, it is to be found in Paragon Finance v Freshfields  1WLR 1183 at p.1188D where Lord Bingham of Cornhill CJ said:
"While there is no rule that a party who waives privilege in relation to one communication is taken to waive privilege in relation to all, a party may not waive privilege in such a partial and selective manner that unfairness or misunderstanding may result."
- The question therefore arises as to where the boundaries of the waiver are, or are taken to be. The first boundary is defined by reference to the "transaction" in relation to which disclosure is made. In the course of his judgment in Tanter Hobhouse J summarised various principles which applied and they included the following (at pp.114 – 5):
"Sixth, by adducing evidence at a trial one does get involved in potential further waiver. The underlying principle is one of fairness in the conduct of the trial and does not go further than that. The fact that this principle does not arise unless you adduce the evidence at the trial is clearly stated in the judgment of Mustill J [in the Nea Karteria case] and it was clearly raised by the facts in the Doland case and it was likewise raised by the facts in the Great Atlantic and Burnell cases. Further, if the evidence is adduced, then the extent of the waiver relates to the transaction to which that evidence goes. The extent of the transaction has to be examined and where it is what somebody said on a particular occasion, then that is the transaction. It is not the subject matter of those conversations. It does not extend to all matters relating to the subject matter of those conversations."
Hobhouse J's principles, including that one, were cited with approval by the Court of Appeal in Tanap Investments (UK) Ltd v Tozer (unreported, 11th October 1991, Balcombe and Taylor LJJ). It is from his sixth principle that the need to identify the transaction is apparent. It is the first means of ascertaining what limits there are to the waiver that has been made.
- Earlier passages in Hobhouse J's judgment shed light on what he means by the "transaction". At page 113 he considers the judgment of Mustill J in the Nea Karteria case and says:
"Furthermore, he applies what for convenience can be called a single transaction test. He looks to see what is the issue in relation to which the material has been deployed. He held that the issue was what was said at the meeting between the lawyer and the Greek seaman, and the correct evaluation of that meeting, but he did not accept that it extended to other matters which did not form part of the transaction…. Furthermore, it is central to Mustill J's judgment that you must define what is the subject matter with which you are concerned. He did not treat the subject matter as all the things about which the seaman spoke, but he merely treated as the subject matter what had been said on that occasion."
At page 114C, applying his principles to the facts of his case (which involved the disclosure of information about one conversation) he said:
"What will have happened is that the putting into evidence of that document will have opened up the confidentiality of that transaction. It has not opened up the confidentiality of later privileged communications….."
That process enables the parties and the court to identify how far the disclosing party has gone (it being that party's right to limit waiver if he wishes to do so).
- A similar approach can be detected in the judgment of Auld J in the Factortame case, though he uses different language. In that case (of which only an unpaginated transcript was made available to me) he started his analysis by referring to the:
"…classic judicial statement of principle…of Mustill J in Nea Karteria at 139:
'Where a party is deploying in court material which would otherwise be privileged, the opposite party and the court must have an opportunity of satisfying themselves that what the party has chosen to release from privilege represents the whole of the material relevant to the issue in question. To allow an individual item to be plucked out of context would be to risk injustice through its real weight or meaning being misunderstood.'
"The most obvious application of that principle is in relation to a single document, where a party waives privilege as to part of it but seeks to withhold the rest of it…... It also extends to attempted partial waiver of privilege in respect of certain of a number of documents relevant to the same issue or transaction. Of course, the scope for unfairness depends on the breadth of the matter in issue or their severability if more than one, and on the exact relationship and/or relevance to such issue(s) of the documents respectively disclosed and sought to be withheld. It may or may not be that partial disclosure of documents going to a matter or matters in issue, say in an exchange of correspondence with legal advisers, would be unfair.
"Much depends on whether the party making partial disclosure seeks to represent by so doing that the disclosed documents go to part or the whole of an 'issue in question', the expression used by Mustill J in the passage from his judgment in Nea Karteria that I have cited. The issue may be confined to what was said or done in a single transaction or it may be more complex than that and extend over a series of connected events or transactions. In each case the question for the court is whether the matters in issue and the document or documents in respect of which partial disclosure has been made are respectively severable so that the partially disclosed material clearly does not bear on matters in issue in respect of which material is withheld. The more confined the issue, for example as to the content of a single document or conversation, the more difficult it is likely to be to withhold, by severance, part of the document or other documents relevant to the document or conversation."
- In that passage, Auld LJ refers to the "transaction" but he also uses the expression "issue", which was the word used by Mustill J in Nea Karteria. He is apparently using the same concept as that deployed by Hobouse J.
- What those citations show is that it is necessary to bear in mind two concepts. First of all, there is the actual transaction or act in respect of which disclosure is made. In order to identify the transaction, one has to look first at what it is in essence that the waiving party is seeking to disclose. It may be apparent from that alone that what is to be disclosed is obviously a single and complete "transaction" – for example, the advice given by a lawyer on a given occasion. In respect of disclosure before a trial that may be all that the non-disclosing party has to go on, because a wider context may not yet be apparent (or at least not until the exchange of witness statements). This may explain the contrast that Hobhouse J drew between disclosure before a trial and deployment at trial. However, in order to ascertain whether that is in fact correct one is in my view entitled to look to see the purpose for which the material is disclosed, or the point in the action to which it is said to go. That explains at least some of the references to the "issue" or "issues" in the judgments of Auld LJ and Mustill J. Mr Croxford submitted that the purpose of the disclosure played no part in a determination of how far the waiver went. I do not agree with that; in some cases it may provide a realistic, objectively determinable definition of the "transaction" in question. Once the transaction has been identified, then those cases show that the whole of the material relevant to that transaction must be disclosed. In my view it is not open to a waiving party to say that the transaction is simply what that party has chosen to disclose (again contrary to the substance of a submission made by Mr Croxford). The court will determine objectively what the real transaction is so that the scope of the waiver can be determined. If only part of the material involved in that transaction has been disclosed then further disclosure will be ordered and it can no longer be resisted on the basis of privilege.
- Once the transaction has been identified and proper disclosure made of that, then the additional principles of fairness may come into play if it is apparent from the disclosure that has been made that it is in fact part of some bigger picture (not necessarily part of some bigger "transaction") and fairness, and the need not to mislead, requires further disclosure. The application of this principle will be very fact sensitive, and will therefore vary very much from case to case, as Auld LJ observed in the first paragraph of his judgment cited above. It is in this sense too that the disclosure may be partial. It is part of some greater whole, not necessarily part of some larger individual transaction. I confess, with all due respect, to having had some difficulty in understanding precisely what he meant in the last sentence of the citation, but I think that my analysis is consistent with his judgment.
- I think that the point can be illustrated by how the principles worked in the Factortame case itself. One of the issues in that case was whether or not the United Kingdom's infringement of community law was intentional or reckless. The government had received advice from time to time on the legality of the legislation, and that went to the issue I have just referred to. The Secretary of State waived legal professional privilege in respect of legal advice up to a date in October 1987, but did not waive it for advice given after that date. That limitation was challenged, and it was said that in the light of the way that it took place, there should "in fairness" also be disclosure for a later period. The Court of Appeal held that the limitation of disclosure was not inconsistent with principle. The Secretary of State expressly stated that he would not suggest at the trial that his conduct after the October date was governed by the disclosed legal advice received before that date. Auld LJ held that in the light of that:
"It is not a case of partial disclosure in relation to his conduct throughout the period in issue, but one of clear severability over two periods within it and of the disclosed and undisclosed documents relating respectively to each period. If the Secretary of State keeps to Mr Richards' word, I can see no unfairness to the applicants…. If the Secretary of State does not seek to take an unfair advantage of his partial discovery at the trial, whether as a matter of evidence or argument, the applicants would be entitled to invite the trial judge to reopen the matter and determine whether there should be further disclosure."
Auld LJ did not at that point identify what the particular transaction was for these purposes, but it is to be inferred that it was one of two things. It was either the giving of advice on each relevant occasion, or, more likely, the giving of advice on the legal issue in question across the period in question, which presumably comprised several events. I say that the latter is more likely, because Auld LJ took the advice across the period as in effect one entity. One can only do that if one looks to some extent at the purpose of the disclosure, that is to say the reliance that would be placed on it in the proceedings. Since advice was only being relied on in order to support the government's case on its mental state for a certain period, that both defined and limited the transaction in question. However, if it were to transpire that use was to be made of the discovery outside that period and purpose, then it might transpire that that use would be unfair and that further matters would be opened up. Whether that is because the waiver would be taken to have been extended by virtue of the unfairness of limiting it, or whether it is because there is a separate principle of unfairness operating alongside or concurrently with the extent of the actual waiver, does not matter for these purposes. That is how the scheme seems to me to operate.
The application of those principles to this case
- I turn therefore to consider the application of those principles to the present case. I have indicated the disclosure given, and I have indicated the reliance that has been placed on it in the witness statements, pleadings and opening. If one looks at the disclosure on a narrow transactional basis, then the transactions in question are first the advice given by Mr Briggs (and the instructions, since those have been revealed as well), and the advice given by DJ Freeman on the occasion in question. If one looks more broadly to see the reliance that is to be made in relation to those events, then it still does not seem to me to go beyond reliance on the advice given on those occasions as representing advice received and, apparently, relied on. With a qualification I shall mention in a moment, that does not extend the transaction beyond that which I have just described. If one then applies a fairness criterion, it does not seem to me that it is unfair to allow the claimant to rely on that advice in that manner whilst at the same time having been in possession of other legal advice on later occasions. There is no ground for supposing that there has been some form of illegitimate partial disclosure. The claimant is not, for example, seeking to rely on the totality of legal advice taken across the period in question whilst disclosing only some of it. As in the Factortame case, if it turns out that there is a case for revisiting that point, then the scope of the disclosure of detail might have to be revisited, but looking at the nature of the reliance that has been made so far, there is no basis, it seems to me, for saying that the material is being deployed unfairly. In terms of disclosing its hand, the claimant has decided the hand it wishes to disclose (a party's right when it comes to waiving privilege – see Tanter above), and it can be seen to be a genuine hand and the whole of the hand in question.
- In the circumstances, the claimant is entitled to draw the waiver line more or less where it has drawn it. I say "more or less" because there is one potential qualification to what I have said. I have said that the transaction can be defined as the advice given by Mr Briggs and by DJ Freeman respectively. It is known that they had some involvement after the occasions on which they are recorded as having given advice, and it seems to me that for these purposes the advice given, and therefore the "transaction" in question, should extend to any later qualifications, extensions or amplification of that advice in the relevant period which can fairly be treated as being part of the same advice. Something similar apparently occurred in the In re Konigsberg (a bankrupt)  1 WLR 1257. At page 1265 Peter Gibson J dealt with the point on the basis of fairness, and at G observed that a letter which came after the events in respect of which there was an express waiver was to be admitted because it was "closely connected" with the disclosed letter. It seems that the same reasoning applied to an affidavit dealing with the same advice.
- I therefore refuse the defendants' application save that there shall be disclosed such later advice as was given by Mr Briggs or by D J Freeman which is an alteration, amplification or extension of the advice already disclosed. I should record that on the occasion when I gave my decision but not the reasons, there was a suggestion that I might have to give some further consideration to the further disclosure which I said was required (the qualification of the advice). At one stage it was suggested that I should look at certain otherwise privileged documents in order to see what came within my formulation at the time. However, the matter was then dealt with without the need for any further deliberation by me; the claimant served two further documents relating to the advice of Mr Briggs and DJ Freeman respectively (the former with some redactions).