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England and Wales High Court (Technology and Construction Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Technology and Construction Court) Decisions >> Transport for Greater Manchester v Thales Transport & Security Ltd  EWHC 149 (TCC) (08 February 2013)
Cite as: 146 Con LR 218,  EWHC 149 (TCC)
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QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Strand, London, WC2A 2LL
B e f o r e :
| TRANSPORT FOR GREATER MANCHESTER (formerly Greater Manchester Passenger Transport Executive)
|- and -
|THALES TRANSPORT & SECURITY LIMITED
Jonathan Acton Davis QC and Simon Crawshaw (instructed by Linklaters LLP) for the Defendant
Hearing by way of written submissions
Crown Copyright ©
Mr Justice Akenhead:
"54. Item 18 raises some interesting issues on privilege. It seems to be common ground that genuinely privileged documents, such as advice given by solicitors, would not be discloseable pursuant to Clause 27 or 28, at least generally. The documents sought are those "relating to resource planning and project reviews carried out by The Nichols Group from the commencement of their involvement in the Project to the present, including their terms of appointment, activities undertaken and outputs (including reviews and reports)". The Nichols Group was engaged by Thales, it is said by Mr Done (for Thales) in December 2010 and prepared reports on an ad hoc and regular weekly basis, albeit these were "very high level, ex post facto" reviews "of the issues experienced on the project". The fact that they are high-level or after the event is neither here nor there for reasons given earlier in this judgment. It is clear that they were brought in and for some two years at least were giving advice and reporting on the issues, which must have included delays, compensation events, cost overruns, which are all symptomatic of good or poor performance of contractual obligations. Subject to the issue of privilege, these reports should be provided as well as those more generally relating to resource planning and project review and the other classes of document referred to within this Item.
55. The privilege issue arises because Mr Done says at Paragraph 10 that since December 2011 "the reports produced by Nichols have been prepared for Thales Legal department for the dominant purpose of gathering evidence and information for use in relation to contemplated adjudication and/or litigation disputes arising under the Contract". Ms Cairns of the legal department and herself a solicitor repeats that almost verbatim and adds that the reports since December 2011 were to assist her in advising in relation to the claims. This assertion is in one sense slightly odd because there is no detail provided about this and no explanation as to whether the Nichols Group is continuing to provide exactly what it did before December 2011 (in which case, it is at least arguable that the dominant purpose remains as it did before) or whether there has been a new retainer for it only to provide adjudication or litigation related services. Bearing in mind what Mr Justice Beatson said in the case of West London Pipeline and Storage Ltd and another v Total UK Ltd and others  EWHC 1729 (Comm) and in particular his observation at paragraph 86(1) that affidavits "should be as specific as possible without making disclosure of the very matters at the claimant of privilege is designed to protect", I can not make a decision on the available evidence. Because the witness statements from Thales are somewhat opaque on the issue and raise genuine questions, I consider that it is appropriate in my discretion to give Thales an opportunity to submit further witness evidence which is more specific and provides a sufficient substratum of fact to enable the Court to form a view as to dominant purpose and any other issues relating to privilege. Further witness evidence needs to be put in reasonably promptly, albeit that it may have to be after the Christmas and New Year break, by 9 January 2013."
"Assembly of historical documents, correspondences pre-launch of claims team
i. Creating a timeline framework and commencing its population with:
b) Jira logs
c) Key events
ii. Collating programme evidence and commencing correlation with 1 above
iii. Pursuing the 6-step process
iv. Support on commercial-technical correspondence for IT, CC and AJ
v. Suggesting shared communication tool(s) for commercial team (including
The second one dated 30 March 2012 contains the following:
"Background: Thales has selected its advisers and key team members for its commercial and claims activities going forward and wishes to retain Nichols Group staff to support those activities.
Objectives: To prepare documentation as part of the "Business as Usual" and "Claims" teams. As stated below, the tasks that each member of the Claims Team perform will be subject to regular review, depending on the merits and priority of each claim. Specific responsibilities will flow from that process and will be clarified on a weekly basis.
• All consultants will report to Robert Dalton
- Direction on Business as Usual matters will be by Ian Tildesley
- Direction on Claims matters will be by Robert Dalton"
"5. Reports provided by Nichols from December 2011 were for the dominant purpose of gathering evidence and information for use in relation to contemplated adjudication and/or litigation of disputes arising under the TOS [Contract] and to assist me in advising in relation to the claims. The reports were (and continue to be) provided to me for these purposes.
6. Accordingly, I believe that litigation privilege applies to the Nichols reporting documents produced from December 2011 and Thales objects to the production of such reports on this basis."
"50. Legal professional privilege is recognised as a fundamental substantive right which prevails over the public interest in all relevant material being available to courts when deciding cases: see R v Derby Magistrates' Court, ex p. B  AC 487, 507-508; In re L (A Minor) (Police Investigation: Privilege)  AC 16, 32; R (Morgan Grenfell & Co Ltd) v Special Commissioner of Income Tax  1 AC 563 at . The burden of establishing that a communication is privileged lies on the party claiming privilege. This is implicit in Lord Edmund Davies's words in Waugh's case, quoted in paragraph  below, and is also implicit in the other speeches in Waugh's case: see also Re Highgrade Traders Ltd.  BCLC 151, at 175d; National Westminster Bank plc v Rabobank Nederland  EWHC 2332 (Comm) at ; LFEPA v Halcrow Gilbert & Co Ltd  EWHC 2340 (QB) at ; Matthews & Malek on Disclosure (2007) 11-46.
51. Litigation privilege differs from legal advice privilege, which protects all communications to lawyers. It relates only to communications at the stage when litigation is pending or in contemplation, and only those made for the sole or dominant purpose of obtaining legal advice or conducting that litigation. The modern law on litigation privilege stems from the decision of the House of Lords in Waugh v British Railways Board  AC 521, a decision in which the approach of the High Court of Australia in Grant v. Downs (1976) 135 C.L.R. 674, and in particular the formulation of Barwick CJ (at 677), was adopted.
52. In Waugh's case Lord Edmund Davies stated that he would certainly deny a claim for privilege when litigation was merely one of several purposes of equal or similar importance intended to be served by the material sought to be withheld from disclosure. He stated (at 542) "it is surely right to insist that, before the claim is conceded or upheld, such purposes must be shown to have played a paramount part" and (at 543) that "the public interest is, on balance, best served by rigidly conforming within narrow limits the cases where material relevant to litigation may lawfully be withheld". Lord Wilberforce said (at 531) that it was clear that the due administration of justice strongly required the disclosure and production of the Board's report on an accident, and that in order to override this public interest the sole or dominant purpose of the report had to be to prepare for litigation. In Bank Austria Akt. v Price Waterhouse 16 April 1997 Neuberger J said:
"A claim for privilege is an unusual claim in the sense that the legal advisers to the party claiming privilege are, subject to one point, the judges in their own client's cause. The court must therefore be particularly careful to consider how the claim for privilege is made out."
53. Thus, affidavits claiming privilege whether sworn by the legal advisers to the party claiming privilege as is often the case, or, as in this case, by a Director of the party, should be specific enough to show something of the deponent's analysis of the documents or, in the case of a claim to litigation privilege, the purpose for which they were created. It is desirable that they should refer to such contemporary material as it is possible to do so without making disclosure of the very matters that the claim for privilege is designed to protect. On the need for specificity in such affidavits, see for example, Andrew Smith J in Sumitomo Corp v Credit Lyonnais Rouse Ltd  151 NLJ 272 at , referred to without criticism by the Court of Appeal  1 WLR 479 at , although the court did not (see ) consider the criticisms of the affidavit in that case were justified…
74. Where the Court is minded to go behind an affidavit, there are four options open to it. It may conclude, as happened in Neilson v Laugharne and Lask's case, that the evidence in the affidavit does not establish that which it seeks to establish, i.e. that the person claiming privilege has not discharged the burden that lies on him, and order disclosure or inspection. It may order a further affidavit to deal with matters the earlier affidavit does not cover or on which it is unsatisfactory. This is seen in cases on inadequate affidavits disclosing assets in response to freezing orders, but also in the case of an affidavit as to disclosure or inspection: see Birmingham and Midland Motor Omnibus Co. Ltd. v London and North Western Railway Co.  3 KB 850. See also National Westminster Bank plc v Rabobank Nederland  EWHC 2332 (Comm) at  and ; Atos Consulting Ltd. v Avis plc (No 2)  EWHC 323 (TCC) at [36-37], although in those cases the evidence was by witness statement rather than by affidavit: see  EWHC 2332 (Comm) at  –  and  EWHC 323 (TCC) at , , . They are also cases on the third option open to the Court, to inspect the documents, which it may do in the circumstances set out in the next two paragraphs. The fourth option is that, subject to the restrictions in paragraphs 79-84 of this judgment, the Court may order cross-examination of the deponent"
(a) Her first statement of 4 December 2012, whilst brief, suggested that all the reports, the December 2011 report and what are now referred to as the "flash reports", were for the dominant purpose of contemplated litigation and were provided to her for that purpose. There has been a major "rowing back" from that in two respects:
(i) First, Linklaters in their letter of 18 January 2013 ask the reader to infer that she had not had the weekly flash reports identified and collated for her to review before she prepared her first statement or indeed until she returned on 7 January 2013 from her Christmas break. It is surprising that she can say on the one hand in her first witness statement that these documents were provided to her and that they were privileged but that she had not reviewed them for the purpose of unequivocally asserting litigation privilege.
(ii) Secondly, the claim for litigation privilege in relation to the "flash reports" has now been dropped, it not being suggested that it was being voluntarily waived. There is no comprehensive or indeed any explanation as to why privilege was claimed in the first place. When one looks at the flash reports, it is clear why litigation privilege can not be claimed for them: they elide equally the "Claims" and "Commercial" imperatives driving the process at least of those reports: while "Claims" might describe claims which imply that adjudication/litigation is contemplated, "Commercial" does not necessarily or at all so imply. There is no discernible weighting between the two imperatives.
It could not, unfairly, be said that a claim for privilege should not be asserted unless either it has been considered carefully and the relevant documents for which privilege is to be claimed have actually been considered by the deponent or at the very least an explanation is provided to the Court as to why the deponent has not at least yet had a full opportunity to review such documents.
(b) By the time of her second statement at the latest, Ms Cairns had clearly had time to review the flash reports and she still unequivocally asserted litigation privilege in relation at least to parts of them. That assertion has now been abandoned, and properly so for the reasons given above.
(a) It is not possible to attach much weight to the judgment of Ms Cairns in her assessment, honest though it may well be, as to the dominant purpose. I have regard to the contents of Paragraph 10 above and also to the fact that it does not appear clearly or otherwise that Thales' highly experienced solicitors have been asked to verify and confirm the basis of the claim for privilege.
(b) It is therefore necessary to look at those documents which have been disclosed. The flash reports indicate clearly that for reporting purposes in those reports at least "Claims" and "Commercial" matters were dealt with together. This suggests at least that Nichols did not regard one or other as having a dominant purpose.
(c) There is no evidence from Nichols and, extremely surprisingly, there was apparently no written instruction to them about the December 2011 report which it might reasonably be expected there would be if there was to be a departure from its previous retainer to something the dominant purpose of which was contemplated litigation. Thales is a highly sophisticated party with access to its own legal department and to independent solicitors of the highest calibre.
(d) The first "deliverables" document dated 5 December 2011 which is said to evidence in some way the new retainer does no such thing. The reference in the "Management Plan" to assembling historical documents and correspondence "pre-launch of claims team" suggests that at best this was to involve some preparatory step before any claims team was constituted. The production of "a timeline framework" with reference to correspondence, "Jira logs" and "key events" is consistent only with a consideration of time issues. "Support on commercial-technical correspondence" is more consistent with non-claims related matters than with claims. It may be that CC is a reference to Ms Cairns whose initials are CMMC; there is no suggestion that the other two "IT" and "AJ" are lawyers and indeed IT may be Mr Tildesley. The production or reference to a "shared commercial tool for commercial team" does not suggest anything particularly to do with contemplated litigation.
(e) Unlike the second deliverable which is at least entitled "TMS Claims Support", the first deliverable is just said to be "Project Management & Forensic Support". If anything, on the basis of Ms Cairns' evidence, it was the first deliverable which resulted in or evidenced the basis for the production of the December 2011 report. The title alone suggests no differentiation in weight to "Forensic Support" over "Project Management", assuming for the moment that "Forensic Support" relates to some sort of support for the work associated with contemplated litigation.
(f) It would not be reasonable or necessary to assume in the light of the evidence that the December 2011 report falls into any different category than the flash reports, given Ms Cairns' witness statements, although of course it may be the case that the December 2011 report contains more information which Thales commercially would rather not disclose.