Scots law decision confirms that privilege doesn’t change its spots

19 July 2023. Published by Tim Potts, Senior Associate and Parham Kouchikali, Partner

The Scots law judgment in University of Dundee v Chakraborty [2023] CSIH 22 has reiterated that whether or not a document is protected by legal professional privilege is determined at the point in time at which the document is created. A non-privileged document cannot later acquire privileged status. The judgment also made certain findings about waiver of privilege which may be more controversial, particularly in the context of regulatory investigations.

Background

The claimant, an employee of the defendant university, raised a grievance about a colleague, alleging bullying and discrimination.

The defendant conducted a factual investigation into this grievance, appointing an independent member of staff to conduct interviews and to prepare a report without involving legal counsel. The investigation report was duly prepared by that independent member of staff and it was accepted by the defendant that, at this point in time, the report was not privileged; it was not a communication between lawyer and client for the purposes of obtaining legal advice and no litigation was in reasonable contemplation.

Shortly after the investigation report had been prepared it was, at that later point in time, reviewed by external lawyers who had by then been appointed by the defendant. The external lawyers suggested some amendments which were provided to the independent member of staff who had drafted the original report and incorporated into a revised version, alongside some further comments from that independent member of staff which they discussed with the defendant's lawyers. Reflecting this review process, the revised version of the investigation incorporated a footnote stating " amended and reissued…following independent legal advice’".

The claimant's grievance escalated into employment tribunal proceedings and, in the course of those proceedings, the defendant served the amended version of the investigation report as part of its evidence, but not the original version. In response, the claimant demanded that the University also disclose the original report.

The defendant resisted disclosure of the original version of the investigation report. Its argument was that, while it accepted the original report had not been privileged when it was created, if it was required to disclose both versions of the report, the claimant would be able to compare the two versions side by side, see what had changed and therefore deduce or infer the legal advice which the defendant had received from its lawyers in the intervening period.

Decision

The Employment Tribunal rejected the defendant's arguments and held that there was no basis on which a document which was not privileged at the point in time it was created could later be cloaked in legal privilege. While there are authorities saying that documents which might betray the tenor of legal advice are privileged, those cases concern documents or selections of document that are privileged at the point in time at which they were created. These authorities do not support the proposition that a non-privileged document might later acquire privileged status. The defendant appealed this decision to the Court of Session.

In the present judgment, the Court of Session refused the defendant's appeal. In so doing, the Court of Session applied the principle set out in Three Rivers Council v Bank of England [2002] EWHC 2730 (Comm) that "It is ... axiomatic that it ought to be possible to say of any material at its creation whether or not it is privileged from disclosure. Its status ought not to depend upon the use subsequently made of it, or the fortuity whether it is used in the manner intended ..." and upheld the findings of the Employment Tribunal that the original version of the investigation report did not retrospectively become privileged after it was amended following input from the defendant's lawyers.

The Court of Session also made some interesting comments regarding waiver of privilege and determined that, not only was the original version of the investigation report not privileged, the defendant had also waived privilege over the legal advice that it had subsequently received from its legal advisers.

Confirming that privilege will be waived if, viewed objectively, "the party possessing the right behaves in a manner which is inconsistent with its maintenance", the Court held that:

a) privilege was "probably" waived as soon as the legal advice obtained by the defendant was revealed to the independent member of staff conducting the investigation; and

b) privilege was "certainly" waived once it became known through the footnote in the revised version of the report that it had been amended as a result of that legal advice.

Analysis

The court's finding that the original version of the investigation report could not retrospectively become privileged is unsurprising and is consistent with the English law position to privilege. Similarly, the court's finding that the footnote referencing legal advice amounted to a waiver is also understandable on the facts of this case.

However, the suggestion that the defendant waived privilege merely by sharing legal advice, apparently on a confidential basis, with the member of staff conducting the investigation is harder to follow and may have practical implications, particularly in the context of regulatory and/or employment law investigations where it is relatively common for an investigation report to be drafted internally, before then being sent to external counsel for legal advice. While this finding appears to have been highly fact specific, and may have been influenced by the fact that the investigation was intended to be impartial, practitioners may need to consider carefully the circumstances in which legal advice regarding an investigation report is obtained and disseminated.

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