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Cite as: [2018] EWHC 1763 (Comm)

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Neutral Citation Number: [2018] EWHC 1763 (Comm)
Case No: CL-2015-000536

IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
QUEEN'S BENCH DIVISION
COMMERCIAL COURT

Royal Courts of Justice
Rolls Building, 7 Rolls Buildings
Fetter lane, London EC4A 1NL
13/07/2018

B e f o r e :

MR. JUSTICE TEARE
____________________

Between:
SINGLE BUOY MOORINGS INC
Claimant
- and -

ASPEN INSURANCE UK LIMITED
(on behalf of all underwriters subscribing to Policy No. HL250608 save for AIG Europe Ltd)
Defendant

____________________

Mark Howard QC, Neil Calver QC, Stephen Midwinter QC, Fred Hobson and Sophie Shaw (instructed by Herbert Smith Freehills) for the Claimant
Alistair Schaff QC, Benjamin Parker and Alexander MacDonald (instructed by Clyde & Co LLP) for the Defendant
Hearing date: 4 July 2018

____________________

HTML VERSION OF JUDGMENT
____________________

Crown Copyright ©

    Mr. Justice Teare :

  1. This judgment concerns three applications by the Defendant, an insurer, relating to disclosure and privilege. The applications are made in an action which is due to be tried in October, November and December 2018. In the action a very substantial claim is made for an indemnity under a policy of insurance in respect of damage to an oil rig, known as a MOPUstor (a mobile offshore production unit attached to a storage tank on the seabed). In view of the proximity of the trial it is necessary for the court to rule on the applications as soon as possible. I was asked to read some long and very detailed statements by the solicitors involved. It is not possible in the short time available to summarise it all. I have concentrated on those matters which appear important in the context of the applications which have been made.
  2. One application is for permission pursuant to CPR 31.20 to rely upon certain documents said to have been mistakenly disclosed by the Claimant to the Defendant in circumstances where the Claimant maintains that they were in fact privileged from inspection (and therefore from use at trial). Another is an application for specific disclosure of certain categories of documents. The third application concerns redactions made from disclosed documents. A common theme to all the applications is a contention by the Claimant that the documents in question are privileged from inspection.
  3. It is first necessary to recount, very shortly, why the documents sought in these applications are relevant. There is no dispute that they are relevant. In 2006 SBM, the Claimant, contracted with an energy company, Talisman, to design, build and erect a MOPUstor. In June 2011 the MOPU platform was towed out to a location in the North Sea where it was to be attached to the stor by means of legs which would fit into sleeves protruding upwards from the stor. The legs required "grouting" but there was delay in the grouting operation which was not completed until 12 July 2011. In May 2012 problems were found with the grouting, which were said to have caused fatigue damage to parts of the legs and to the structure below them. On 10 July 2012 Talisman ordered the demanning of the platform on the grounds of safety. By the time the MOPU was remanned in 2014 it had been left exposed for two winters in the North Sea which caused damage to the topsides. That damage, together with the sub-sea damage, is claimed from several insurers. All but one of those claims have been settled. The claim against the Defendant is the one remaining claim. Whilst the Claimant alleges that the topsides damage was caused by the defective grouting the Defendant maintains that in reality the cause was the Claimant's decision to bring the contract to an end and to decommission the MOPUstor for commercial reasons connected with delays in, and the unexpected expense of, the construction project. The Defendant therefore seeks disclosure of documents concerning the circumstances in which the contract was ended and the MOPUstor was decommissioned in order to advance its case. It is those documents which are the subject of these applications. In response the Claimant says that relevant documents have been properly searched for (by electronic means) and disclosed but inspection of some of them has been properly withheld on the grounds of privilege. The Claimant says that all the applications should be dismissed.
  4. The application for permission to use documents said to have been disclosed by mistake

  5. This application is made pursuant to CPR 31.20 which provides that where a party has inadvertently allowed a privileged document to be inspected the party who has inspected the document may use it only with the permission of the court.
  6. It is common ground that the principles upon which that power should be exercised are those set out in Al Fayed v Commissioner of Police of the Metropolis [2002] EWCA Civ 780. It is necessary to set out paragraph 16 of the judgment of Clarke LJ (as he then was) which summarises the relevant principles.
  7. "i) A party giving inspection of documents must decide before doing so what privileged documents he wishes to allow the other party to see and what he does not.
    ii) Although the privilege is that of the client and not the solicitor, a party clothes his solicitor with ostensible authority (if not implied or express authority) to waive privilege in respect of relevant documents.
    iii) A solicitor considering documents made available by the other party to litigation owes no duty of care to that party and is in general entitled to assume that any privilege which might otherwise have been claimed for such documents has been waived.
    iv) In these circumstances, where a party has given inspection of documents, including privileged documents which he has allowed the other party to inspect by mistake, it will in general be too late for him to claim privilege in order to attempt to correct the mistake by obtaining injunctive relief.
    v) However, the court has jurisdiction to intervene to prevent the use of documents made available for inspection by mistake where justice requires, as for example in the case of inspection procured by fraud.
    vi) In the absence of fraud, all will depend upon the circumstances, but the court may grant an injunction if the documents have been made available for inspection as a result of an obvious mistake.
    vii) A mistake is likely to be held to be obvious and an injunction granted where the documents are received by a solicitor and:
    a) the solicitor appreciates that a mistake has been made before making some use of the documents; or
    b) it would be obvious to a reasonable solicitor in his position that a mistake has been made;
    and, in either case, there are no other circumstances which would make it unjust or inequitable to grant relief.
    viii) Where a solicitor gives detailed consideration to the question whether the documents have been made available for inspection by mistake and honestly concludes that they have not, that fact will be a relevant (and in many cases an important) pointer to the conclusion that it would not be obvious to the reasonable solicitor that a mistake had been made, but is not conclusive; the decision remains a matter for the court.
    ix) In both the cases identified in vii) a) and b) above there are many circumstances in which it may nevertheless be held to be inequitable or unjust to grant relief, but all will depend upon the particular circumstances.
    x) Since the court is exercising an equitable jurisdiction, there are no rigid rules."
  8. It is first necessary to summarise, briefly, the chronology of disputes between SBM and Talisman because these are the foundation of the claim to privilege. The principal dates can be taken from the skeleton argument of Mr. Howard QC. In 2011 a dispute developed between Talisman and SBM relating to the execution of the construction project. In November 2011 SBM started arbitration proceedings against Talisman relating to liability for certain costs (described by the Claimant's solicitor as reimbursement of certain build costs). In July 2012 Talisman notified SBM that it intended to submit a substantial cross-claim, which it did in February 2013 when it brought a cross-claim for USD 2.8 billion based on an alleged wilful breach of contract. "Wilful default" had been alleged as early as April 2011.
  9. In August 2012 SBM and Talisman established an "off-project" team which engaged in seven months of negotiations with Talisman with a view to settling the dispute. In particular Sietze Hepkema joined SBM in May 2012 as Chief Governance and Compliance Officer and his role was "to resolve disputes between SBM and Talisman and to find a way forward on the Project." He and Mr. Paul Warwick of Talisman in August 2012 established an "off-contract" team focused on resolving the ongoing disputes. The team met regularly but only a limited number of people within SBM were aware that settlement talks were taking place. The talks resulted in a settlement reached on 11 March 2013 pursuant to which it was agreed that the MOPUstor would be decommissioned once the parties were able to re-man it.
  10. This application concerns five documents which were provided by the Claimant to the Defendant without any claim to privilege. After a long and complex procedure of disclosure and the taking of witness statements the Claimant's solicitor formed the view that the whole or parts of those documents were in fact privileged from disclosure. They so informed the Defendant and requested their return. The question is whether the Defendant should be permitted to use the documents in this litigation.
  11. The March 2012 documents

  12. I shall deal first with what have been described as the March 2012 documents. They consist of minutes of a "Talisman MOPUstor Sponsor Meeting" between representatives of SBM and Talisman on 16 March 2012. Parts 1-4 concerned an update of current activities and discussions concerning the Rowan Stavanger. Part 5 concerned "feedback" from Talisman further to discussions between B. Chabas and T. Meggs, the chief executives of SBM and Talisman. Part 6 concerned how to respond to questions from the media and part 7 was a summary of "identified topics", which included certain of the topics mentioned in part 5, and in particular the "position of Talisman to take over remaining scope of work and relevant negotiation". It is only part 5 of these minutes which SBM seeks to redact. It is said that this part of the meeting was conducted on a without prejudice basis. The March 2012 documents also include a short email chain which SBM seeks to withhold in full. It begins with an email dated 14 March 2012 from Mr. Meggs to Mr. Chabas following what I am told was a without prejudice meeting between them on 10 March 2012. The email envisaged a meeting which appears to be that which took place on 16 March 2012. There is then an email dated 30 March 2012 from Mr. Chabas to Mr. Meggs and finally an internal email dated 30 March 2012 from Mr. Chabas to SBM personnel. All of these documents are claimed to be privileged from inspection on the grounds of without prejudice and/or litigation privilege. The arguments addressed to me assumed that the documents were, when they were created, privileged from inspection.
  13. It is first necessary to describe the circumstances in which these documents were provided by the Claimant to the Defendant.
  14. The minutes of the meeting on 16 March 2012 were first provided by or on behalf of the Claimant to the Defendant on 12 June 2014 when a report on the cause of the loss of fatigue life in the shear plates was provided as "confidential information". Paragraph 2.16 of the report referred to the meeting of 16 March 2012 and quoted from part 5 of the minutes which were referred to in a footnote and, I infer, attached. The minutes were again provided by the Claimant's solicitor by way of early disclosure on 20 May 2016. The purpose of the letter was "to set out the position as currently understood by SBM in relation to the work carried out by Aker for Talisman and to provide copies of certain documents." Paragraph 4.1.1 of the letter referred to the meeting of 16 March 2012 and to the minutes of the meeting which "have been provided to insurers previously but which are enclosed again for convenience." The minutes and other documents were deployed in support of an argument (set out in paragraph 4.3.5) that "it is abundantly clear that both SBM and Talisman remained focused on the completion of the project".
  15. The emails between 14 and 30 March 2012 were also referred to in the letter dated 20 May 2016 and quoted from. They were referred to in a footnote and, I infer, enclosed with the letter. They were disclosed again in September 2016.
  16. It is next necessary to consider what the Defendant did with these documents upon their receipt. They were not deployed by the Defendant but they were read. The evidence of the solicitor who received the letter dated 20 May 2016 is to the effect that he read and considered them at the time but did not appreciate their significance. Even when a draft Defence was provided on 31 July 2017 their significance had not been appreciated and no reference was made to them. Their significance was only later appreciated. It was on the basis of this evidence that Mr. Schaff QC submitted that the documents had been read and evaluated.
  17. The submission by Mr. Schaff QC, on behalf of the Defendant, is that it was not obvious to the solicitor receiving the March 2012 documents that they were privileged. This was not disputed by Mr. Howard QC. His point was that the Defendant had made no use of the March documents before it was told by the Claimant's solicitor on 26 July 2017 that they were in fact privileged and therefore, applying paragraph (vii)(a) of the Al Fayed principles the solicitor must have appreciated that a mistake had been made before use was made of the March documents. On that basis Mr. Howard QC submitted that permission to use the March documents should be refused.
  18. There is no definition of what "use" denotes in this context. Mr. Howard QC referred to English & American Insurance Ltd v Herbert Smith [1988] FSR 232 in support of the proposition that the critical fact is whether the documents have been tendered in evidence or not; see p.236. However, that was a case where it was undoubtedly obvious that the documents were privileged and that they had come into the solicitor's possession by mistake. I do not consider that it assists in the very different circumstances of the present case. The court followed the decision in Goddard v Nationwide Building Society [1987] Q.B. 670 which is again a rather different type of case.
  19. It would be, it seems to me, too narrow a meaning of "use" to say that it requires that the documents must be tendered in evidence in court or even that the documents must be deployed in a letter, pleading or statement. All will depend upon the circumstances of the particular case. In the present case the March documents had not merely been provided to the Defendant by the Claimant but the Claimant had deployed them in support of an argument which it wished to persuade the Defendant was correct. The documents were therefore read and evaluated by the Defendant, or rather by its solicitor. I consider that that amounts to making use of the documents for the purpose of the Al Fayed principles. The solicitor was invited to read them and consider whether they supported the Claimant's case. He did so as a part of his professional duty as a solicitor. He did not at that stage appreciate that they could be viewed as supporting the Defendant's case rather than the Claimant's case but that, it seems to me, does not detract from the conclusion that he made use of them.
  20. At the time he made use of them in that way it was not obvious that they were privileged and so, in accordance with the Al Fayed principles, he should be permitted to use them in the action notwithstanding that they were once, it is to be assumed, privileged from inspection. That privilege must have been waived in 2016 by the Claimant's solicitor who had, as the Al Fayed principles make clear, ostensible authority to waive privilege.
  21. If I am wrong on the meaning of "use" I would nevertheless consider that it would be unjust and inequitable to refuse permission for the documents to be used. The last sentence of paragraph (vii) of Al Fayed principles requires that justice and equity must always be addressed. In circumstances where the Claimant's solicitor deployed the March documents in support of an attempt to persuade the Defendant of the merit of the Claimant's case it seems to me that justice and equity require that the Defendant must also be entitled to use them in support of its case. Mr. Howard QC submitted that there was no unfairness because both the Claimant and the Defendant would now be debarred from using the March documents in court. I am not however persuaded by that submission. In circumstances where the Claimant has invited the Defendant to read and consider the March documents and the Defendant's solicitor has done so it seems to me not only fair but also common sense that the Defendant should be entitled to say that the March documents in fact support its case.
  22. I therefore grant permission to the Defendant to use the March 2012 documents.
  23. The January 2012 documents

  24. The application also concerns certain documents which were brought into existence in January 2012. These comprise an internal SBM presentation delivered in Monaco on 20 January 2012 (from which three pages, or part thereof, are sought to be redacted), a shorter SBM internal document dated 23 January 2012 (which is sought to be withheld in full) and an internal SBM presentation to the board dated Amsterdam 23 January 2012 (from which part of one page is sought to be redacted).
  25. These documents were disclosed with no redactions on 19 May 2017. However, it is accepted on behalf of the Defendant that its solicitor had not read the documents before the Claimant sought to withhold the documents on 26 July 2017 on the grounds of privilege. Accordingly it is also accepted that the "primary" point is whether the documents are privileged. It seems to me that that, in substance, is the only point.
  26. It is first necessary to consider the basis upon which it is claimed that the documents are privileged from inspection. That is explained by Mr. Oddy, the solicitor at Herbert Smith who has conduct of the claim on behalf of the Claimant, in his third witness statement dated 27 March 2018 which was made in connection with the Defendant's application pursuant to CPR 31.20. In section 3 he deals with the basis of the claim to privilege in respect of the documents in question. In paragraph 51 he refers to the backdrop to the claim to privilege, namely, "the wide ranging disputes between SBM and Talisman". He said at paragraph 52 that "beyond the formal arbitrations, there was an ongoing dispute, liable to crystallise into proceedings, that went to the heart of the contractual relationship between the parties and threatened the continuation of the Project as a whole". At paragraphs 66-74 he dealt with the January 2012 documents.
  27. With regard to pages 5 and 6 of the Monaco 20 January 2012 document he said that they "evidence internal analysis of the legal options and strategies being considered in the context of the arbitral proceedings commenced a month earlier and the wider dispute described above". He said that "it is therefore subject to (at least) litigation privilege".
  28. In assessing this evidence I have borne in mind the summary of the court's approach to claims for litigation privilege provided by Hamblen J. (as he then was) in Starbev GP Ltd. v Interbrew Central European Holding BV [2013] EWHC 4038 (Comm).
  29. The law relating to "litigation privilege"
    11. The legal requirements of a claim to litigation privilege may be summarised as follows:
    (1) The burden of proof is on the party claiming privilege to establish it – see, for example, West London Pipeline and Storage v Total UK [2008] 2 CLC 258 at [50].
    (2) An assertion of privilege and a statement of the purpose of the communication over which privilege is claimed in a witness statement are not determinative and are evidence of a fact which may require to be independently proved. The court will scrutinise carefully how the claim to privilege is made out and the witness statements should be as specific as possible – see, for example, Sumitomo Corporation v Credit Lyonnais Rouse Ltd (14 February 2001) at [30] and [39] (Andrew Smith J); West London Pipeline and Storage Ltd v Total UK Ltd [2008] EWHC 1729 (Comm) at [52], [53], [86] (Beatson J); Tchenguiz v Director of the SFO [2013] EWHC 2297 (QB) at [52] (Eder J).
    (3) The party claiming privilege must establish that litigation was reasonably contemplated or anticipated. It is not sufficient to show that there is a mere possibility of litigation, or that there was a distinct possibility that someone might at some stage bring proceedings, or a general apprehension of future litigation – see, for example, United States of America v Philip Morris Inc [2004] EWCA Civ 330 at [68]; Westminster International v Dornoch Ltd [2009] EWCA Civ 1323 at paras [19] – [20]. As Eder J stated in Tchenguiz at [48(iii)]: "Where litigation has not been commenced at the time of the communication, it has to be 'reasonably in prospect'; this does not require the prospect of litigation to be greater than 50% but it must be more than a mere possibility".
    (4) It is not enough for a party to show that proceedings were reasonably anticipated or in contemplation; the party must also show that the relevant communications were for the dominant purpose of either (i) enabling legal advice to be sought or given, and/or (ii) seeking or obtaining evidence or information to be used in or in connection with such anticipated or contemplated proceedings. Where communications may have taken place for a number of purposes, it is incumbent on the party claiming privilege to establish that the dominant purpose was litigation. If there is another purpose, this test will not be satisfied: Price Waterhouse (a firm) v BCCI Holdings (Luxembourg) SA [1992] BCLC 583, 589-590 (cited in Tchenguiz at [54]-[55]); West London Pipeline and Storage Ltd v Total UK Ltd at [52].
    12. In relation to the Court's approach to the assessment of evidence in support of a claim for privilege, it has been stated that it is necessary to subject the evidence "to "anxious scrutiny" in particular because of the difficulties in going behind that evidence" – per Eder J in Tchenguiz at [52]. "The Court will look at 'purpose' from an objective standpoint, looking at all relevant evidence including evidence of subjective purpose" – ibid. 48(iv). Further, as Beatson J pointed out in the West London Pipeline case at [53], it is desirable that the party claiming such privilege "should refer to such contemporary material as it is possible to do without making disclosure of the very matters that the claim for privilege is designed to protect".
    13. As was further stated by Beatson J in the West London Pipeline case at [86]:
    "(3) It is, however, difficult to go behind an affidavit of documents at an interlocutory stage of proceedings. The affidavit is conclusive unless it is reasonably certain from:
    (a) the statements of the party making it that he has erroneously represented or has misconceived the character of the documents in respect of which privilege is claimed: Frankenstein v Gavin's House to House Cycle Cleaning and Insurance Co, per Lord Esher MR and Chitty LJ; Lask v Gloucester Health Authority.
    (b) the evidence of the person who or entity which directed the creation of the communications or documents over which privilege is claimed that the affidavit is incorrect: Neilson v Laugharane (the Chief Constable's letter), Lask v Gloucester HA (the NHS Circular), and see Frankenstein v Gavin's House to House Cycle Cleaning and Insurance Co, per A L Smith LJ.
    (c) the other evidence before the court that the affidavit is incorrect or incomplete on the material points: Jones v Montivedeo Gas Co; Birmingham and Midland Motor Omnibus Co v London and North West Railway Co; National Westminster Bank plc v Rabobank Nederland."
  30. It is to be observed that the claim to litigation privilege in respect of pages 5 and 6 of the 20 January 2012 document is short and concise. Further, no assertion is made that the dominant purpose of pages 5 and 6 was for use in the actual or anticipated proceedings or in settling the actual and anticipated disputes. It is also to be noted that no particulars are given of the "legal options and strategies being considered".
  31. I have compared the claim to litigation privilege with the terms of the document itself. It is headed "Talisman project alternatives" and "SBM Internal Presentation". The objective of the presentation is described on page 2 document as being "to compare the assumptions of the current MOPU Stor forecast ………with various options to be considered as possible alternatives to mitigate current costs forecast deviations." Reference is then made to three options 1 C-D, 3 A-B and 4 A-B. Those same options are shown in the form of a graph on p.3. More details of those options are given on pp.8-13 and 15. Option 5-1 and 5-2 are considered on pp. 16-17. The text of these latter options, 5-1 and 5-2, mentions a "settlement" and the "drop of the current claim against Talisman". There is no suggestion that any of these pages should be withheld from the Defendant.
  32. I shall not describe the contents of pages 5 and 6 in detail (since the Claimant maintains that they are privileged) but the court was permitted to read them de bene esse. They appear to record a conclusion or a proposal that there are "only 2 viable ways forward". One appears to be a proposal by which the project is completed and the other appears to be a proposal by which it is not, or at any rate not in the expected manner. SBM's costs are to be subject to a stated maximum.
  33. No reference is made in the document, or on pages 5 and 6 in particular, to "legal options and strategies". The basis of Mr. Oddy's statement that pages 5 and 6 evidence an "analysis of legal options and strategies" is not stated. It is possible that some legal options or strategies had been advised or considered but when or by whom is not stated. The off-contract team who sought to resolve the disputes between SBM and Talisman did not begin its work until August 2012, six months after the documents came into existence. The court is left to speculate what is meant by "legal options and strategies". Further, options 1 C-D, 3 A-B, 4 A-B, 5-1 and 5-2 appear to be "options to mitigate current costs forecast deviations". It seems that "the 2 viable ways forward" on pp.5 and 6 are of a similar character, namely ways to mitigate costs. Yet the former group of options is not said to be privileged from inspection and the latter 2 "viable ways forward" are said to be privileged from inspection. In the result it is difficult for the court to conclude on an objective basis that pages 5 and 6 are the subject of litigation privilege. On an objective basis the purpose of all the options appears to have been to consider how costs could be reduced. That is not a purpose which would attract litigation privilege.
  34. If that was one purpose and "an analysis of legal options and strategies" was another that would also not be enough to make pp.5 and 6 subject to litigation privilege unless the latter analysis was the dominant purpose of pp.5 and 6. There is no evidence from Mr. Oddy that that was the dominant purpose. It may be that the reason why there is no such evidence is that Mr. Oddy's evidence is that the only purpose of pp.5 and 6 was to analyse legal options and strategies. But if so, such evidence would sit unhappily with the language of the document itself which suggests that the aim of the document was to consider options to mitigate costs.
  35. I have in mind that in Mr. Oddy's fourth and later witness statement dealing with the application for specific disclosure he makes reference to the dominant purpose test; see paragraph 36.7. However that reference is made immediately after making reference to the work of the off-contract team which did not commence until August 2012; see paragraph 36.6. The documents I am presently concerned with are dated January 2012. In his third and earlier witness statement dealing with the January 2012 documents he makes no reference to dominant purpose. In a claim for litigation privilege I find that omission striking.
  36. I have sought, as directed by the authorities, to give the claim to litigation privilege "anxious scrutiny". I have also borne in mind, as stated by the authorities, that a witness statement claiming privilege is normally conclusive. In this regard I have borne in mind, as submitted by Mr. Howard QC, that Mr. Oddy is a most experienced solicitor. But the conclusion which I have reached, bearing in mind (a) the objective indications that pp.5 and 6, like the rest of the document, are concerned with reducing costs, (b) the shortness of the explanation for claiming privilege, and (c) the absence of any assertion as to what the dominant purpose of pp.5-6 was, is that something must have gone wrong with the claim to litigation privilege in this case. I am reasonably certain, to use the phrase mentioned in the authorities, that the character of pp. 5 and 6 has been misconceived.
  37. The three page document, which I am told is dated 23 January 2012, is headed Talisman Strategy and describes a "commercial strategy" to achieve "dropping claim and/or capping" SBM's exposure.
  38. It is said that the document "evidences internal analysis of the legal option and strategies being considered in the context of the arbitral proceedings commenced a month earlier, and the wider disputes described above." It is "therefore subject to (at least) litigation privilege." Thus the claim is put on the same basis as pp.5-6 of the 20 January 2012 document. Mr. Oddy makes a further specific point that the final bullet point on the first page (which I have quoted) "makes clear beyond doubt that the measures under discussion are part of an overall strategy to resolve the extant arbitration and wider ongoing disputes which, inter alia, concerned allocation of responsibility for increasing costs."
  39. The words "dropping claim" are consistent with a strategy to persuade Talisman to drop its claim. But the words "and/or capping …..exposure" suggest that the document had two purposes. Mr. Oddy does not state that the document was brought into existence for the dominant purpose of being used in the arbitration or to settle the existing and anticipated claims.
  40. As with the earlier document dated 20 January 2012 I am reasonably certain that something must have gone wrong with this claim for privilege and that the character of the document has been misconceived.
  41. The third document (dated Amsterdam 23 January 2012) contains a short redaction about a "commercial strategy". I have had difficulty in identifying the basis upon which privilege is claimed with regard to this passage. But I assume that it is also on the grounds of litigation privilege based upon the same concise statement which was made in relation to the other two documents. For the reasons which I have given in relation to those two documents I consider that this claim is also not made out on objective basis.
  42. Both documents dated 23 January 2012 contain a table with a column headed "Evaluation (legal)". I understood Mr. Schaff to accept that he could not challenge the redaction of this column on the grounds that it is protected by legal advice privilege.
  43. Having concluded that the claim to litigation privilege has not been made out it follows that the Defendant should be permitted to use the unredacted copies of the January 2012 documents (save in respect of the table referred to above). Mr. Oddy did not seek to claim without prejudice privilege in respect of the January 2012 documents.
  44. The application for specific disclosure

  45. This is an application for specific disclosure of documents relating to negotiations with Talisman, the termination of the contract and the decommissioning of the MOPUstor. They are known to those familiar with this case as categories 3 and 6. The negotiations took place between August 2012 and March 2013.
  46. Documents of this nature have been searched for and where not privileged from inspection have been disclosed. But some 5000 documents are the subject of a claim to privilege and they may contain documents within categories 3 and 6. The Defendant says that they cannot be privileged for the reasons claimed and so they should be re-assessed for privilege on a proper basis, it being accepted that some documents may attract legal advice privilege.
  47. The starting point is Mr. Oddy's fourth witness statement where he explains the reasons for claiming privilege. In his fourth witness statement he deals with this topic between paragraphs 35 and 45. He refers in paragraph 36 to the claims and counterclaims between SBM and Talisman, to the without prejudice discussions with Talisman with the aim of settling "this fundamental dispute" (which I think means "the broad question of liability for the delays to the MOPUstor project and whether the project would be completed") and to the work which was carried out to support SBM's negotiations in those discussions. He said, in paragraph 36.7, that "documents setting out or evidencing the negotiations with Talisman are subject to without prejudice privilege" and that "internal SBM communications and communications with third parties created for the dominant purpose of the dispute or its settlement are subject to litigation privilege".
  48. At paragraphs 40-41 he deals with category 3 documents, those concerning negotiations with Talisman regarding the termination of the contract. He confirms that the privilege relied upon is without prejudice and/or litigation privilege. There were negotiations concerning a resolution of the dispute which had arisen. Options for resolving the dispute included terminating the contract, transferring MOPUstor to Talisman and/or transferring the remaining scope of work to complete MOPUstor to Talisman. Offers made to settle a dispute and internal consideration of the possible outcomes of a dispute "fall squarely within without prejudice and/or litigation prejudice." At paragraph 45 he deals with category 6, documents concerning decommissioning and disposing of MOPUstor. Again he confirms that the privilege relied upon is without prejudice and/or litigation privilege. He states that work was carried out in order to support SBM in its negotiations with Talisman and also to identify whether possible settlement solutions (including decommissioning) were feasible from a technical perspective.
  49. Mr. Schaff QC submitted that work carried out in order to support SBM in its negotiations with Talisman and to identify whether possible settlement solutions (including decommissioning) were feasible from a technical perspective were protected neither by litigation privilege nor by without prejudice privilege.
  50. Dealing first with litigation privilege he submitted that there was a world of difference between documents prepared for use in proceedings and documents which were prepared to evaluate what commercial strategies should be adopted in relation to Talisman. I agree that there is or may be such a difference but the question of privilege arises in the present case with regard to proposals to settle the dispute on terms which included terminating the contract, transferring the MOPUstor to Talisman or decommissioning the MOPUstor. Mr. Howard QC submitted that documents obtained for use in proceedings include documents obtained for use in settling proceedings. In that I consider he is right; see also Director of SFO v Eurasian Natural Resources [2017] 1 WLR 4205 at paragraph 60. On that basis internal consideration of proposals to settle which involve the assessment in commercial terms of certain proposals to settle would be privileged from inspection.
  51. Mr. Schaff referred to an internal document of SBM entitled "Yme MOPUstor Decommissioning" which recorded what he described as "milestones" in the activities with regard to the investigation of decommissioning, which began with a technical study in July 2012 and ended in March 2013 with the settlement with Talisman. Along the way were feasibility assessments by Smit. Mr. Schaff said that it could not be maintained that a meeting with Smit was for the dominant purpose of the arbitration with Talisman. I am not sure that that could not be maintained. It would be necessary to examine the facts closely. If the position was that until the off-contract team began its work there had been no proposal to decommission but that such proposal was made as part of a proposed settlement then a feasibility study by Smit as to the technical feasibility of decommissioning would appear to be privileged. If, however, the position was that decommissioning was already being considered as a commercial solution to SBM's problems before the negotiations began with Talisman then the suggested feasibility study would only be the subject of litigation privilege if the study were produced for the dominant purpose of resolving the dispute with Talisman.
  52. Mr. Schaff said that Mr. Oddy had not applied the dominant purpose test because he did not refer to it between paragraphs 40-45 of Mr. Oddy's fourth witness statement. However, Mr. Oddy did refer to it at paragraph 36.7 and it is to be inferred that he must have had it mind when making his claim to privilege in paragraphs 40-45.
  53. Mr. Schaff further said that there was no dispute, actual or anticipated, between SBM and Talisman as to decommissioning. That may be so but if decommissioning were considered in the context of settlement then the discussion could be brought within the ambit of litigation privilege.
  54. I have, as required, sought to give "anxious scrutiny" to this claim for litigation privilege. But I have also borne in mind that the statement claiming privilege should usually be accepted unless the court is reasonably certain that the claim is misconceived. I am not reasonably certain that Mr. Oddy's claim to litigation privilege is misconceived in relation to documents coming into existence between August 2012 and March 2013 when there were negotiations to resolve the disputes between SBM and Talisman.
  55. However, category 3 related to the period from June 2011 until April 2013. My review of the January 2012 documents has persuaded me that they, the January 2012 documents, are not privileged from disclosure. The Claimant's mistaken claim to privilege in respect of them shows that the Claimant's review of its disclosure for the period June 2011 to August 2012 may have been conducted on a mistaken basis; namely, that because arbitration claims were in existence or anticipated internal consideration of options to reduce expenditure are subject to litigation privilege. I would therefore consider ordering the Claimant to review the documents which it has withheld on the grounds of privilege for the period from June 2011 until August 2012 but not thereafter.
  56. That would not be an appropriate order were the documents in categories 3 and 6 protected by without prejudice privilege.
  57. Mr. Schaff remarked that this was an "unattractive" claim in circumstances where both SBM and Talisman will benefit from a successful claim in this action (that was part of the settlement agreement between SBM and Talisman), where Norwegian law, which governs the arbitration between SBM and Talisman, does not recognise without prejudice privilege, where the claims between SBM and Talisman were settled in 2013 and where SBM has allowed some privileged documents to go into the trial bundles. However, I did not understand Mr. Schaff to say that any of these factors meant that the claim to without prejudice privilege was unsustainable in law. He merely relied upon them to say that the claim to without prejudice privilege is unattractive. Whether or not the claim is attractive does not determine the legitimacy of the claim.
  58. Mr. Schaff submitted that the court should not allow the claim to without prejudice privilege to stand because the Defendant was not seeking to embarrass SBM with admissions it had made against its interest in negotiations with Talisman. Rather, it was seeking evidence of a position taken or a statement made by SBM that the MOPUstor project would not be completed. He described that as the background to the negotiations and submitted that, by analogy with the decision of the Supreme Court in Oceanbulk v TMT Asia Ltd. [2011] 1 AC 662, statements made in without prejudice negotiations could be referred to as evidencing the factual matrix when construing the settlement agreement, so the statements made in the negotiations with Talisman could be referred to in this case in order to assist in showing what was the cause of the MOPUstor being unmanned during two winters.
  59. The relevant law as to without prejudice privilege and the existence of exceptions to it has been reviewed by Newey J. (as he then was) in EMW law LLP v Halborg [2017] EWHC 1014 (Ch). The judge said, at paragraphs 34-43:
  60. "Some principles
    34. The "without prejudice" rule operates to render evidence inadmissible. In general, "[t]he rule applies to exclude all negotiations genuinely aimed at settlement whether oral or in writing from being given in evidence" (Lord Griffiths in Rush & Tompkins Ltd v GLC [1989] 1 AC 1280, at 1299).
    35. One justification for the rule can be found in "the express or implied agreement of the parties themselves that communications in the course of their negotiations should not be admissible in evidence if, despite the negotiations, a contested hearing ensues" (Robert Walker LJ in Unilever plc v Procter & Gamble Co [2000] 1 WLR 2436, at 2442). The rule is also "founded upon the public policy of encouraging litigants to settle their differences rather than litigate them to a finish" (Lord Griffiths in the Rush & Tompkins case, at 1299).
    36. Without prejudice negotiations will normally be inadmissible in their entirety. In the Unilever case, Robert Walker LJ said (at 2448-2449):
    "But to dissect out identifiable admissions and withhold protection from the rest of without prejudice communications (except for a special reason) would not only create huge practical difficulties but would be contrary to the underlying objective of giving protection to the parties, in the words of Lord Griffiths in the Rush & Tompkins case [1989] AC 1280, 1300: 'to speak freely about all issues in the litigation both factual and legal when seeking compromise and, for the purpose of establishing a basis of compromise, admitting certain facts.' Parties cannot speak freely at a without prejudice meeting if they must constantly monitor every sentence, with lawyers or patent agents sitting at their shoulders as minders."
    37. The without prejudice rule can continue to apply even after a compromise has been agreed. In the Rush & Tompkins case, Lord Griffiths said (at 1301):
    "as a general rule the 'without prejudice' rule renders inadmissible in any subsequent litigation connected with the same subject matter proof of any admissions made in a genuine attempt to reach a settlement."
    In Avonwick Holdings Ltd v Webinvest Ltd [2014] EWCA Civ 1436, Lewison LJ (with whom Sharp and Burnett LJJ agreed) said (at paragraph 22):
    "The general rule however is still that stated in Rush & Tompkins Ltd v Greater London Council & Another …, namely that without prejudice negotiations once privileged remain privileged even after settlement."
    38. The implications of the without prejudice rule are, moreover, capable of extending beyond the parties to the relevant negotiations. In the Rush & Tompkins case, Lord Griffiths said (at 1301):
    "It of course goes without saying that admissions made to reach settlement with a different party within the same litigation are also inadmissible whether or not settlement was reached with that party."
    In Ofulue v Bossert [2009] UKHL 16, [2009] 1 AC 990, Lord Rodger observed of the Rush & Tompkins case (at paragraph 37):
    "The decision is important because it establishes that not only the parties to the correspondence, but third parties also, are prevented from making use of the contents of without prejudice correspondence."
    39. It is not open to one party to without prejudice negotiations to waive the privilege unilaterally. The privilege is a joint one and so can be waived only with the consent of both parties: see Avonwick Holdings Ltd v Webinvest Ltd, at paragraph 21.
    40. There are, however, exceptions to the without prejudice rule. Robert Walker LJ provided a list of some of "the most important instances" in the Unilever case, at 2444-2445. Two of those he identified are particularly relevant to the present appeal:
    "(1) As Hoffmann L.J. noted in [Muller v Linsley & Mortimer], when the issue is whether without prejudice communications have resulted in a concluded compromise agreement, those communications are admissible. Tomlin v. Standard Telephones and Cables Ltd. [1969] 1 W.L.R. 1378 is an example.
    …
    (6) In Muller's case (which was a decision on discovery, not admissibility) one of the issues between the claimant and the defendants, his former solicitors, was whether the claimant had acted reasonably to mitigate his loss in his conduct and conclusion of negotiations for the compromise of proceedings brought by him against a software company and its other shareholders. Hoffmann L.J. treated that issue as one unconnected with the truth or falsity of anything stated in the negotiations, and as therefore falling outside the principle of public policy protecting without prejudice communications. The other members of the court agreed but would also have based their decision on waiver …."
    41. The basis and extent of the latter exception (Robert Walker LJ's exception (6)) are controversial. I shall have to return to them later in this judgment.
    42. The list of exceptions to the without prejudice rule is not closed. In Ofulue v Bossert, Lord Neuberger (with whom Lords Hope, Rodger and Walker expressed agreement) said (at paragraph 98) that it was open to the House of Lords to create further exceptions to the rule, while also expressing the view that it would be inappropriate to do so on the facts of that case. In Oceanbulk Shipping and Trading SA v TMT Asia Ltd [2010] UKSC 44, [2011] 1 AC 662, the Supreme Court concluded that there should be an exception under which:
    "facts identified during without prejudice negotiations which lead to a settlement agreement of the dispute between the parties are admissible in evidence in order to ascertain the true construction of the agreement as part of its factual matrix or surrounding circumstances".
    Lord Clarke (with whom the other members of the Court agreed) said (at paragraph 46):
    "I would hold that the interpretation exception should be recognised as an exception to the without prejudice rule. I would do so because I am persuaded that, in the words of Lord Walker in the Ofulue case [2009] AC 990, para 57, justice clearly demands it. In doing so I would however stress that I am not seeking either to underplay the importance of the without prejudice rule …."
    43. While "[n]early all the cases in which the scope of the 'without prejudice' rule has been considered concern the admissibility of evidence at trial after negotiations have failed" (Lord Griffiths in the Rush & Tompkins case, at 1300), it can also render documents immune from disclosure. In the Rush & Tompkins case, Lord Griffiths noted (at 1304) that Rabin v. Mendoza & Co [1954] 1 W.L.R. 271 "shows that even as between the parties to 'without prejudice' correspondence they are not entitled to discovery against one another" and went on to explain (at 1305):
    "I have come to the conclusion that the wiser course is to protect 'without prejudice' communications between parties to litigation from production to other parties in the same litigation. In multi-party litigation it is not an infrequent experience that one party takes up an unreasonably intransigent attitude that makes it extremely difficult to settle with him. In such circumstances it would, I think, place a serious fetter on negotiations between other parties if they knew that everything that passed between them would ultimately have to be revealed to the one obdurate litigant. What would in fact happen would be that nothing would be put on paper but this is in itself a recipe for disaster in difficult negotiations which are far better spelt out with precision in writing."
    A little later, Lord Griffiths said (at 1305):
    "In my view the general public policy that applies to protect genuine negotiations from being admissible in evidence should also be extended to protect those negotiations from being discoverable to third parties."
  61. This summary of the law shows that third parties, in this case the Defendant, can be affected by without prejudice privilege and that the privilege continues notwithstanding that the dispute in question has been settled, as the disputes between SBM and Talisman were in this case. There are however exceptions to the rule where the justice of the case demands it. Mr. Schaff accepted that he could not submit that the court should in any particular case decide whether it was just and equitable to relax the without prejudice privilege. In my judgment an exception can only be allowed where it is of the same character as one already established or where it is an incremental but principled extension of an existing exception, as was the exception in Oceanbulk v TMT.
  62. The usual application of the without prejudice privilege is to deny the admissibility in evidence of an admission made in the course of without prejudice negotiations. But the rule is not circumscribed by that application, notwithstanding a clear statement that it is by Hoffman LJ, as a further extract from the judgment of Newey J. makes clear:
  63. "The implications of the Muller case
    57. Muller v Linsley & Mortimer involved a claim against solicitors in which the plaintiffs alleged that they had brought and compromised some proceedings against other parties in a reasonable attempt to mitigate their loss. The solicitors disputed this and sought discovery of documents relating to the settlement. The plaintiffs disclosed the letter before action and final settlement agreement, but maintained that the without prejudice rule allowed them to withhold letters and other documents leading up to the settlement. The Court of Appeal decided otherwise and ordered production of the documents.
    58. Hoffmann LJ approached matters on the basis that, since the solicitors were not parties to the relevant negotiations, the without prejudice rule must depend only on its public policy rationale, which he took to be directed solely to admissions (see 80). He explained (at 79):
    "If one analyses the relationship between the without prejudice rule and the other rules of evidence, it seems to me that the privilege operates as an exception to the general rule on admissions (which can itself be regarded as an exception to the rule against hearsay) that the statement or conduct of a party is always admissible against him to prove any fact which is thereby expressly or impliedly asserted or admitted. The public policy aspect of the rule is not in my judgment concerned with the admissibility of statements which are relevant otherwise than as admissions, i.e. independently of the truth of the facts alleged to have been admitted."
    It followed, in Hoffmann LJ's view, that the without prejudice rule did not apply. He said (at 80):
    "If this is a correct analysis of the rule, then it seems to me that the without prejudice correspondence in this case falls outside its scope. The issue raised by paragraph 17 of the statement of claim is whether the conduct of the Mullers in settling the claim was reasonable mitigation of damage. That conduct consisted in the prosecution and settlement of the earlier action.
    The without prejudice correspondence forms part of that conduct and its relevance lies in the light it may throw on whether the Mullers acted reasonably in concluding the ultimate settlement and not in its admissibility to establish the truth of any express or implied admissions it may contain. On the contrary, any use which the defendants may wish to make of such admissions is likely to take the form of asserting that they were not true and that it was therefore unreasonable to make them.
    I do not think that interpreting the rule in this way infringes the policy of encouraging settlements. It may of course be said that a party may be inhibited from reaching a settlement by the thought that his negotiations will be exposed to examination in order to decide whether he acted reasonably. But this is a consequence of the rule that a party entitled to an indemnity must act reasonably to mitigate his loss. It would, in my judgment, be inconsistent to give the indemnifier the benefit of this rule but to deny him the material necessary to make it effective."
    59. The other members of the Court, Leggatt and Swinton Thomas LJJ, expressed agreement with Hoffmann LJ, while also saying that the Court's decision could be justified on the basis of waiver. Swinton Thomas LJ, for instance, said (at 81):
    "By bringing their conduct into the arena, and putting it in issue, the plaintiffs have, in my judgment, waived any privilege attached to without prejudice negotiations and correspondence."
    60. Hoffmann LJ's reasoning has not, however, been endorsed in subsequent cases. In the Unilever case, Robert Walker LJ said (at 2443) that, "[w]ithout in any way underestimating the need for proper analysis of the [without prejudice] rule", he had "no doubt that busy practitioners are acting prudently in making the general working assumption that the rule, if not 'sacred' (Hoghton v. Hoghton (1852) 15 Beav. 278, 321), has a wide and compelling effect". In Ofulue v Bossert, Lord Walker, having referred to views expressed by Lord Hoffmann in Muller v Linsley & Mortimer (as Hoffmann LJ) and Bradford & Bingley plc v Rashid [2006] 1 WLR 2066 (as Lord Hoffmann), said (at paragraph 57):
    "As a matter of principle I would not restrict the without prejudice rule unless justice clearly demands it."
    In the same case, Lord Neuberger, having quoted from the first of the passages from Hoffmann LJ's judgment in Muller set out in paragraph 58 above, said (at paragraph 95):
    "Despite the very great respect I have for any view expressed by Lord Hoffmann, and the intellectual attraction of the distinction which he draws, I am inclined to think that it is a distinction which is too subtle to apply in practice …. In any event, the observation appears to be limited to the public policy reason for the rule, and says nothing about the contractual reason, which plainly applies here."
    61. On the other hand, I was not referred to any criticism of the actual decision in the Muller case. To the contrary, Lewison LJ observed in Avonwick Holdings Ltd v Webinvest Ltd (at paragraph 22) that it was "hardly surprising that … the court ordered disclosure of the negotiations leading to the settlement". Thanki, "The Law of Privilege", 2nd ed., states (at paragraph 7.22):
    "Whilst the result in the Muller case was undoubtedly correct, it is best analysed as another exception to the without prejudice rule."
    62. In the circumstances, I ought, as it seems to me, to proceed on the basis that Muller v Linsley & Mortimer was correctly decided on its facts. Further, I do not think that the case can be satisfactorily explained as one of waiver. Although Leggatt and Swinton Thomas LJJ suggested that the decision could be justified in that way, (a) they also both agreed with Hoffmann LJ and (b) it is hard to see how there can have been waiver since the authorities indicate that the benefit of the without prejudice rule cannot be waived by just one party to the negotiations. The correct inference must, in my view, be that (as is suggested in Thanki, "The Law of Privilege") there is an exception to the without prejudice rule that encompasses the facts of the Muller case."
  64. It thus appears that the fact that in the present case the Defendant is not seeking to embarrass SBM with admissions made in the course of its negotiations with Talisman is not by itself a good reason for concluding that the negotiations are not protected by the without prejudice privilege. They are protected by that privilege so long as the use to be made of what was said in the negotiations is not covered by an existing exception. No existing exception covers the present case and I am not persuaded that the exception recognised in Oceanbulk can properly be extended to the present case. That exception concerned the construction of the settlement agreement. In the present case no such question arises. Instead, the Defendant simply wishes to use statements made by SBM to advance its case that the cause of the topside damage to the MOPUstor was not the defective grouting but SBM's own preference to bring the MOPUstor project to an end. That would be, in my judgment, a new exception quite different from that which has so far been recognised.
  65. Mr. Schaff complains that SBM is seeking to prevent the Defendant and the court from fully understanding the full background to the termination of the contract between SBM and Talisman and to the abandonment of the project. I agree that it is. But that is the effect of claiming without prejudice privilege. It is not a reason for denying that privilege.
  66. I have therefore concluded that the negotiations between August 2012 and March 2013 are protected by without prejudice privilege, in addition to litigation privilege. However, the important question is whether without prejudice privilege applies to the period from June 2011 until August 2012.
  67. It does not appear that there were any settlement negotiations between SBM and Talisman until August 2012. The March 2012 documents to which I have referred (and ruled can be used) show that Talisman had not set up a negotiating team by 14 March 2012 and the minutes of the meeting on 16 March 2012 confirmed that Talisman had no mandate from its partners for "the negotiation". The email from Mr. Chabas dated 30 March 2012 showed that he appreciated that Talisman was not yet in a position to start discussions. The witness evidence to which I was referred showed that the off-contract team to negotiate a settlement was not set up and did not start work until August 2012.
  68. Thus there does not appear to be any basis upon which without prejudice privilege would apply to documents coming into existence before August 2012.
  69. It may be that the discussions between Mr. Chabas and Mr. Meggs on 10 March 2012 were expressly agreed to be without prejudice and it may be that section 5 of the minutes of the meeting on 16 March 2012 was agreed to be without prejudice but, for the reasons I have given, it is not just and equitable that the Defendant should be refused permission to rely upon the March 2012 documents.
  70. For these reasons I have concluded that SBM's claim to litigation privilege and without prejudice privilege cannot be denied (at any rate at this stage) for documents coming into existence between August 2012 and March 2013. However, I am reasonably certain that the claim for privilege in relation to documents coming into existence between June 2011 and August 2012 cannot be maintained and so, subject to one last point, the documents arising in that period which have been found to be relevant but in respect of which privilege has been claimed should be disclosed save for those, if any, which are protected by legal advice privilege.[1]
  71. The one last point is a suggestion made in evidence and in Mr. Howard's written submissions that the application has been made at "an unacceptably late stage" which would "almost certainly" lead to the trial date being lost.
  72. I accept that the application is now being heard at a late stage in the preparation for trial. The application was, however, made on 27 March 2018 following formal demands for disclosure in February 2018 after the last tranche of disclosure had been given in the Autumn of 2017. SBM says that it should have been made earlier since SBM has been claiming privilege for some time. Perhaps it could have been made earlier but in circumstance where disclosure was still being given in the Autumn of 2017 it is, arguably, understandable that the application was formally made after the process had come to an apparent end. The real question is whether making the order which the court proposes risks losing the trial date.
  73. When I read Mr. Howard's skeleton argument I was concerned by this point. It was said that the order sought would "require SBM to reopen its disclosure exercise, in which it reviewed over 2 million documents over the course of 10 months (disclosing over 350,000) and which would almost certainly lead to the trial date being lost". However, it became clear during the hearing that what would be required would be a review of the 5000 documents in relation to which privilege had been claimed. There is no question of reopening a disclosure exercise involving 2 million documents. As I understood the position, and as I would expect to be the case, SBM's solicitor knows what those 5000 documents are and can easily identify them. Since I am minded to make an order only in relation to the period from June 2011 until August 2012 the number of documents to be reviewed (for legal advice privilege) will, I assume, be less than 5000. Again, I would expect SBM's solicitor to know which documents, in respect of which privilege has been claimed, are dated within that period. In his oral submissions Mr. Howard said little about this matter. I asked for the relevant references to the evidence where this matter was dealt with. Although Mr. Oddy refers to the process at paragraph 43 of his fourth witness statement and states that the documents will be "peppered" with legal advice he appears to make that comment primarily in relation to documents coming into existence between July 2012 and March 2013 (as he also does in paragraph 38) and I am not proposing to make an order in relation to the period from August 2012 to March 2013. He refers to the need for the exercise to be done carefully and without haste. However, no indication is given of approximately how long the task can be expected to take. The most Mr. Howard could say was that the exercise would take a substantial time.
  74. It seems to me that the work required to comply with the order I propose to make is limited in time (it does not include the period from August 2012 to March 2013) and applies to documents which have already been identified. Obviously it will take some time and require some lawyers to direct their efforts to it rather than to other matters. But in a case of this magnitude where, judging from the attendance at the hearing, a large number of lawyers appears to be engaged I am not persuaded that the order I propose to make would give rise to a realistic risk that the trial date would be lost.
  75. I shall therefore make the order I have indicated.
  76. Part of the application for specific disclosure related to what have been described as financial documents. A statement was made in March 2013 that the settlement with Talisman had been welcomed by shareholders who "wanted this legacy project out of the way." The Defendant has requested documents which showed who wanted it out of the way. I make no order in this regard. Relevant documents have been searched for and such relevant documents as have been found have been disclosed. There is no good reason to require this exercise to be done again.
  77. The application concerning redactions

  78. As is usual in large and complex cases redactions have been made from some 215 documents on the grounds of irrelevance and privilege. The Defendant is concerned by this process but accepts that it can realistically advance this application for the redactions to be reviewed only in so far as the court accepts that the claim to privilege cannot be maintained. Since I have held that the claim to privilege cannot be maintained for the period from June 2011 to August 2012 I accept that it is appropriate for the redactions from documents falling within that period to be reviewed. Mr. Oddy says that this exercise will not be "straightforward" but I do not consider that it will risk losing the trial date.
  79. There has been discussion as to who should do that exercise. There is no reason why it should not be done by SBM's solicitor who, I have no doubt, will carry out the process properly and in accordance with this judgment.
  80. Conclusion

  81. The Defendant is entitled to rely upon the January and March 2012 documents.
  82. SBM is required to disclose those documents which came into existence between June 2011 and August 2012 and in respect of which privilege has been claimed save for those covered by legal advice privilege.[2]
  83. SBM is required to reconsider, in the light of this judgment, the redactions made in respect of documents which came into existence between June 2011 and August 2012.

Note 1   I was surprised, having sent out the judgment in draft, to receive a note from SBM suggesting an alteration to the substance of the judgment. That is not the purpose of sending out the judgment in draft. However, a party is entitled to make submissions as to the order which should be made as a result of the judgment and I view SBM’s note in that light. I phrased paragraph 62 of my judgment as I did because the terms in which litigation privilege and without prejudice privilege had been claimed (see paragraphs 41 and 42 of the judgment) related to settlement discussions with Talisman which only began in August 2012 (see paragraphs 48 and 59 of the judgment) . I therefore did not anticipate that there might be documents protected by such privilege prior to August 2012. However, if I am told that there are or may be documents which were brought into existence prior to August 2012 for the dominant purpose of settling the dispute with Talisman as opposed to being brought into existence for the purpose of reducing SBM’s costs and/or that there are or may be documents which came into existence before August 2012 which are truly covered by without prejudice privilege notwithstanding that settlement discussions did not commence until August 2012 then I will consider whether the order which the court makes should permit a review of pre-August 2012 documents not only for legal advice privilege but also for litigation and without prejudice privilege. If I am persuaded to permit that wider review it would be on terms that any documents withheld from inspection should be identified and the basis upon which privilege is claimed described. Otherwise, as the Defendant said in its responsive note, any claim for privilege cannot be considered by the Defendant.     [Back]

Note 2   The precise form of the order to be made by the court may permit a review of pre-August 2012 documents for litigation and without prejudice also; see the footnote to paragraph 62.     [Back]


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