Court of Appeal finds that those instructing lawyers in litigation will likely need to reveal their identities

Loreley Financing (Jersey) No. 30 Limited v Credit Suisse Securities (Europe) Limited & Ors  (RFI).

[2022] EWCA Civ 1484 is a unanimous decision of the Court of Appeal which addresses a novel issue of privilege of particular relevance to corporate litigants – is the identity of the individuals who are authorised to give instructions to the company’s solicitors covered by legal professional privilege?  The judgment also helpfully explains the limits on what information can properly be sought through a Request for Further Information

Loreley had in 2007 purchased $100m of notes from a collateralised debt obligation linked to the credit of residential mortgage-backed securities (RMBS). Loreley alleged fraudulent misrepresentation and unlawful means conspiracy against Credit Suisse in relation to the securitisation of the RMBS and representations made in the sale of the notes. The claim was issued in 2018. Credit Suisse contended that the claims are time barred.

Loreley is a special purpose vehicle with no employees, thereby raising issues as to whose knowledge is to be attributed to it for the purposes of limitation. In that context, Credit Suisse sought disclosure of the identity of those authorised to give instructions to Loreley’s solicitors in the proceedings. Loreley resisted this attempt, including on the basis that the information is inherently privileged.

Is the identity of those authorised to give instructions to solicitors on behalf of a corporate client covered by privilege?

The Court concluded that, as a matter of principle, the answer to this novel question of law is that in most cases (including in Loreley) the identity of such individuals is not privileged.

The Court rejected Loreley’s submission that there is a concept of litigation being subject to a “zone of privacy” within which everything which happens is subject to litigation privilege. Rather, “litigation privilege attaches to communications (including secondary evidence of such communications) rather than information or facts divorced from such communications.”

The Court of Appeal decided that instead litigation privilege only extends to the identity of the persons communicating with a solicitor in relation to litigation if disclosure of that person’s identity would either:

• inhibit candid discussion between the solicitor and the person communicating on behalf of the corporate client; or
• reveal the content of the communication or the litigation strategy being discussed with the solicitor, in what the court considered likely to be “an unusual case”.

Loreley had not contended that the identity of those providing instructions would betray the content of any legal advice sought or inhibit discussions with the solicitors, so this was not such a case.

The role of an RFI

The Court ruled that the request to disclose the identities of those individuals authorised to give instructions on behalf of the corporate client was not suitable for an RFI under Part 18 of the Civil Procedure Rules. The Court noted that its Part 18 power is limited by Practice Direction 18 paragraph 1.2 and so it will only order a party to respond to an RFI if the request is “concise and strictly confined to matters which are reasonably necessary and proportionate to enable [a party] to prepare its case or understand the case that it had to meet”.

Credit Suisse “already [had] considerable information about the roles played” by Loreley’s creditor (a German bank to which Credit Suisse was seeking to attribute Loreley’s knowledge for limitation purposes) at the relevant time. In those circumstances, the Court confirmed that Loreley should not have been ordered at first instance to answer the RFI. The disclosure of the identities of those authorised to instruct Loreley’s solicitors, quite apart from the question of privilege, was of “only peripheral relevance” to the limitation defence and, as such, did not fit within the scope of an RFI.

Conclusion

This is a useful judgment in setting the ambit of litigation privilege while also making clear that there is a “spectrum of relevance” that must be assessed when preparing an RFI as “not everything which is relevant is the subject of a proper request under CPR 18”.