26 April 2024

Privilege Under English Law – The Lay Of The Land Following Al Sadeq V Dechert LLP

Legal professional privilege is a longstanding and fundamental principle of English law, and yet it finds itself before the Courts with such frequency that it is also one that is continually evolving.
United States Litigation, Mediation & Arbitration
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Legal professional privilege is a longstanding and fundamental principle of English law, and yet it finds itself before the Courts with such frequency that it is also one that is continually evolving.

Most recently, on 24 January 2024, the Court of Appeal of England and Wales handed down its judgment in Al Sadeq v Dechert LLP and Others [2024] EWCA Civ 28. That decision considers a number of key aspects of the English law position on legal professional privilege, which will usually arise in the following two circumstances:

  • Legal advice privilege that applies to "communications between a lawyer and its client for the sole or dominant purpose of giving or receiving legal advice, and documents which would reveal the contents of such communications"; and
  • Litigation privilege that applies to "communications between a lawyer and its client or third parties which are brought into existence for the sole or dominant purpose of use in the conduct of existing or contemplated adversarial litigation."

The judgment considers certain key elements of the criteria for each of these categories of privilege to apply, including (a) the need to define a "client" for the purposes of litigation privilege, and (b) the circumstances in which investigatory work will attract legal advice privilege.

Importantly, the Court also:

  • Confirmed that parties (including funders and insurers) are able to assert litigation privilege in relation to anticipated or actual proceedings to which they themselves are not parties; and
  • Considered the scope of the so-called "iniquity exception" to privilege, ultimately finding that the threshold for establishing that the exception applies may in fact be higher than many had previously understood to be the case.

Background Facts

The Claimant, Mr. Karam Salah Al Din Awni Al Sadeq ("Mr. Al Sadeq"), had, between 2008 and his resignation in 2012, held various positions, from legal advisor to Deputy CEO, within the Ras Al Khaimah Investment Authority ("RAKIA").

RAKIA claimed that, in around 2012, it had discovered that its CEO throughout that time, Dr. Khater Massaad ("Dr. Massaad"), had perpetrated "systematic and wide ranging fraud" against RAKIA and related entities, resulting in losses in the hundreds of millions of dollars.

Mr. Al Sadeq was arrested in connection with that fraud in September 2014 and was subsequently convicted and imprisoned in Ras Al Khaimah. He maintains his innocence and claims that his wrongful conviction was politically motivated.

The First Defendant, Dechert LLP ("Dechert") was the law firm engaged in 2013 to investigate the suspected fraud by Dr. Massaad. The Second to Fourth Defendants were former Dechert partners who were involved in the investigation (the "Former Partners"). It was Dechert's investigation that resulted in the proceedings being brought against Mr. Al Sadeq, and that resulted in numerous other sets of civil and criminal proceedings against various individuals, in numerous jurisdictions.

There were various issues arising from Dechert's engagement including, crucially for privilege purposes, the identities of the lawyer and the client. Although these in themselves can be complex and fact-sensitive issues, it suffices to say that, in this case, the Court found that the lawyer was the "global law firm known as Dechert, including as necessary all its constituent parts and local offices." The client, in relation to the events which formed subject of the appeal, was Ras Al Khaimah Development LLC ("RAK Development") (to whom responsibility for various matters, including the investigation, had been transferred from another RAK entity).

The High Court Proceedings

Mr. Al Sadeq's claim in the English High Court was, in summary, that Dechert had used various unlawful methods, including threats and intimidation, to force him to give evidence (some of which was false) to assist them in building a case against Dr. Massaad and his alleged co-conspirators, at the behest of the ruler of Ras Al Khaimah, Sheikh Suad bin Saqr al-Qasimi (the "Ruler"). Mr. Al Sadeq claimed that mistreatment, which amounted to a breach of his human rights under UAE and international law, had caused him physical, emotional, psychological, and moral harm, as well as financial loss and damage, and sought compensation in relation to the same.

A number of challenges to the Defendants' privilege claims followed the giving of standard disclosure, resulting in a two-day hearing before the English High Court in December 2021. Some of those issues then went to appeal, including:

  • Whether the correct legal test had been applied to determine whether documents fell within the iniquity exception to privilege and, consequently, whether the relevant threshold had been met in respect of the iniquities alleged so as to prevent those documents from attracting legal privilege;
  • Whether there was a requirement for Dechert's clients to have been parties to the proceedings which were said to have been in contemplation for the purposes of litigation privilege; and
  • As regards legal advice privilege:
    1. First, whether the Court of Appeal's decision in Three Rivers District Council & Ors v Governor and Company of the Bank of England (No. 5) [2003] EWCA Civ 474, that legal advice privilege would only attach to communications between (a) employees and representatives specifically authorized to seek and receive legal advice on behalf of a client, and (b) the legal advisers (the "Three Rivers No. 5 Principle"), was correct, and whether it also applied to litigation privilege; and
    2. Second, whether legal advice privilege could attach to Dechert's investigatory work, which Mr. Al Sadeq contended was not of a legal nature.

Issue 1: The Iniquity Exception

What was the Issue?

A document will not attract legal privilege if the "iniquity exception" applies: that will be the case if the document in question has come into existence "in relation to a fraud, crime, or other iniquity," where that iniquity "puts the conduct outside the normal scope of [the] professional engagement or is an abuse of the relationship which falls within the ordinary course of such engagement."

Dechert's evidence was that it had carried out a careful review to establish whether documents fell within the iniquity exception, by reference to eight possible iniquities, adopting a threshold test of (a) whether there was a "strong prima face case" that an iniquity existed (in accordance with Kuwait Airways Corporation v Iraqi Airways Co (No. 6) [2005] EWCA Civ 286) and (b) if that test was met, whether the document in question had been "brought into existence for the purpose of furthering the iniquity" (as per Barrowfen Properties v Patel & Ors [2020] EWHCA 2536 (Ch)). Applying those tests, no documents had been found to fall within the iniquity exception.

Mr. Al Sadeq maintained that the wrong test had been applied at both stages. He argued that the threshold test did not require a "strong" prima facie case, and that the lower threshold required had, in fact, been met in respect of the three alleged iniquities relied upon in support of his application:

  • Al Sadeq's unlawful abduction from Dubai (where he had been resident at the relevant time) and his detention in Ras Al Khaimah;
  • The unlawful prison conditions in which he had been held while in Ras Al Khaimah; and
  • The denial of access to legal representation in Ras Al Khaimah.

Mr. Al Sadeq's case on the second limb of the test was less clear, formulated as including documents generated "in furtherance of" an iniquity, as well as "as a result of", "generated by", "reporting on", "concerning", or "relating to and/or prompted by" the iniquity. Mr. Al Sadeq sought an order that documents and parts thereof "generated by or report[ing] on" the three iniquities be disclosed.

The first instance Judge had rejected Mr. Al Sadeq's interpretation of the second limb of the test as being overly broad, maintaining that the appropriate test was whether a document was specifically created "in furtherance of" an iniquity. In light of that, the Judge had concluded that he need not consider whether or not a "strong" prima facie case was required, though confirmed that, if necessary, he would have applied Dechert's proposed higher threshold of a "strong... if not a very strong" prima facie case.

What did the Court of Appeal find?

By the time of the appeal, it had become common ground that the relevant threshold test was whether there was a "strong prima facie case" that an iniquity existed, though it became apparent in the course of the parties' submissions that there was a discrepancy in their respective understandings of what that meant. The Court of Appeal was therefore asked to consider whether a "real prospect of success" test applied, or whether it simply required an iniquity to be established as "more likely than not", on the balance of probabilities.

The Court of Appeal concluded that the latter was the more appropriate test. In other words, save in exceptional circumstances, it needed to be more likely than not based "on the material available to the decision maker" (that being the party, the legal advisor responsible for disclosure, or the Court) that an iniquity existed. The Court took the view that the application of any lower threshold would be inconsistent with principle, would potentially require a party to disclose communications which, on the material available, were more likely than not to be privileged. In circumstances where the loss of privilege is "irremediable," that was plainly an unsatisfactory outcome. The addition of the proviso "save in exceptional circumstances" was said by the Court to be necessary to account for situations, such as in an interlocutory context, where it was necessary for the Court to reach a provisional conclusion on incomplete evidence, and where a consideration of the "balance of prejudice" may also come into play.

The Court of Appeal considered that a prima facie case had been established in respect of all three alleged iniquities, overturning the first instance decision on the basis that the Judge had not adequately considered all of the evidence before him. The result was that it did fall to the Court to consider the second limb – the "relationship test" – which Mr. Al Sadeq contended to be broader in scope, so as to encompass documents reporting on or evidencing the iniquity, as well as documents which existed because of the iniquity (akin to the "but for" test).

The Court of Appeal concluded that the relevant test was whether the document was "brought into existence as part of or in furtherance of the iniquity." "Part of" included documents reporting on or revealing the iniquitous conduct and was distinguished by the Court from "in the course of,", which suggested a temporal limit and/or supported the "but for" assertion put forward by Mr. Al Sadeq, which the Court rejected as being too remote. The Court ultimately ordered that the disclosure exercise would need to be re-undertaken due to the risk of material having been wrongly withheld.

Issue 2: Litigation Privilege

What was the Issue?

As noted above, various issues arose in respect of the Defendants' claims to litigation privilege. The Defendants had identified eleven (11) sets of legal proceedings said to have been in contemplation at various dates. The contemplation was said to be that of both Dechert and its clients. However, Mr. Sadeq contended that:

  • The Defendants' evidence was inadequate in establishing that the relevant litigation was in contemplation at the point suggested;
  • The date on which litigation against him was said to have been contemplated, that being 5 September 2014, was unjustifiably early, in circumstances where the complaint was not accepted by the public prosecutor until some months later, in February 2015; and
  • Five of the eleven sets of proceedings (which comprised criminal or extradition proceedings) could not qualify for the purpose of litigation proceedings because Dechert's clients were not parties to those proceedings (the "Non-Party Issue").

Mr. Al Sadeq sought an order that the Defendants produce documents falling within these parameters (to the extent they were established). The first instance Judge found against Mr. Al Sadeq in respect of the adequacy of Dechert's evidence and the appropriateness of the date from which privilege was asserted. The Judge also found against Mr. Al Sadeq on the Non-Party Issue.

What did the Court of Appeal find?

Taking the first two issues in turn, the Court of Appeal found:

  • The burden of proof was on the party seeking to assert privilege, and specific considerations applied to the treatment of evidence given in support of such assertions, which should be "as specific as possible," and which would be subject to "anxious scrutiny" by the Courts, due to the "difficulties in going behind that evidence" (Tchenguiz v Director of the SFO [2013] EWHC 2297 (QB)). [1] Ideally, parties would refer to contemporaneous material insofar as it was possible to do so, "without making disclosure of the very matters that the claim for privilege is designed to protect,"( (West London Pipeline and Storage v Total UK [2008] 2 CLC 258 at [50]) but, especially at an interlocutory stage, the evidence would be conclusive unless it was reasonably certain that it was incorrect or incomplete. In this case, the Court was satisfied that the evidence was sufficient to establish that litigation was in contemplation at the relevant points, and accepted Dechert's submission that disclosure of contemporaneous material to support that assertion would have the effect of undermining the privilege it was seeking to protect.
  • The Court also rejected Mr. Al Sadeq's argument about the September 2014 date. It was predicated on an argument that the public prosecutor had not accepted the criminal complaint until February 2015, such that proceedings could not have been in the public prosecutor's reasonable contemplation before then. However, the Court's approach to the Non-Party Issue rendered the public prosecutor's contemplation irrelevant.

The Non-Party Issue is perhaps one of the most interesting points to arise from the judgment, with Mr. Al Sadeq contending that litigation privilege would be incapable of applying to litigation to which the person asserting privilege is not and/or does not expect to be a party. The Court took issue with that as a matter of principle, provided the dominant purpose test was met. It would, the Court said, result in a distinction between private prosecutions (to which the privilege holder would be a party) and a public prosecution (to which it would not).

It would also create difficulties in various other scenarios:

  • One such scenario is where insurers have conduct of, but are not parties to, proceedings to which their assured are parties (and similarly for litigation funders). Mr. Al Sadeq submitted that such cases were distinct, requiring the third party to be treated as "equivalent to" the party to the proceedings.
  • The Court noted that the same could be true of non-parties with no control over the litigation, such as in the case of Group Litigation Orders and collective proceedings.
  • An anomaly may also arise in respect of a joint venture company which becomes party to litigation, with its shareholders wishing to conduct their own "process of advice and evidence gathering" in relation to that litigation.
  • Finally, it may well be the case that allegations could be made against a person in proceedings to which they are not a party, or that person may be a (potential) witness seeking advice as to his role. That advice would be subject to legal advice privilege, and it would be anomalous if litigation privilege did not also apply so as to protect communications between that person or his lawyers and a third party for the same purpose.

The position as a matter of principle was found to be supported by the authorities, and the Court therefore found in favour of Dechert. However, it did leave open one of the issues which had arisen: whether, in addition, there needs to be a sufficient interest in the contemplated proceedings, over and above satisfying the dominant purpose test.

Issue 3: Legal Advice Privilege and the Three Rivers (No. 5) Principle

What was the Issue?

The Three Rivers (No. 5) Principle in issue was how broadly the definition of "client" extended for the purposes of asserting legal advice privilege, the Court of Appeal having previously found that it would only extend to communications between employees and representatives who were specifically authorized to seek and receive legal advice. Although Dechert contended that the Court of Appeal's decision in that case had been wrong, the parties accepted that the Court of Appeal in this instance was bound by it: the point was therefore taken in order to preserve it in the event of an appeal to the Supreme Court.

Mr. Al Sadeq sought (a) an order that Dechert identify the persons whom they contended were authorized to seek or receive legal advice on behalf of RAK Development, and explain the basis for that, and (b) disclosure of documents between Dechert and representative of its clients who were not authorized.

No order was made in respect of the definition of "client", which was said to have been resolved in correspondence or in respect of the extension of the Three Rivers (No. 5) Principle to litigation privilege.

What did the Court of Appeal find?

The Court of Appeal drew a distinction between the need for there to be a defined "client" in the context of legal advice privilege, but not in the context of litigation privilege: the distinction, the Court found, was that legal advice privilege was incapable of extending to third parties, thus requiring a rule enabling a distinction to be drawn between the client and a third party. In the case of litigation privilege, the extension to third parties was such that all legal and natural persons, if they fell outside the definition of client, would still fall within the definition of a third party, thus preserving the privilege. The Three Rivers (No. 5) Principle was therefore not applicable to litigation privilege.

In circumstances where it was common ground that the Court of Appeal was bound by the Three Rivers (No. 5) Principle in relation to the definition of "client" in respect of legal advice privilege, the cross-appeal fell to be dismissed.

Issue 4: Legal Advice Privilege and its Application to Investigations

Mr. Al Sadeq also sought disclosure of documents previously withheld from production on the basis of legal advice privilege, insofar as they were created for the "dominant purpose of [Dechert's] investigatory work," on the basis that such documents could not attract legal advice privilege.

The first instance Judge found that Dechert's investigatory work had been undertaken in a "relevant legal context," thus being capable of attracting legal advice privilege.

What did the Court of Appeal find?

The appeal judgment helpfully summarizes the state of the law in this area, confirming that the relevant communication's sole or dominant purpose needs to be legal advice, and that commercial advice would not suffice: for that to be the case, the communication needed to be made "in a legal context," although "legal context" was widely defined to include not just legal advice, but advice "given with the benefit of a lawyer's skill as a lawyer or through a 'lawyer's eyes.'" Legal advice privilege would also attach to communications disseminating or revealing the contents of communications fulfilling that criteria. The Court took the view that, in light of this, "most communications from and to the client are likely to be set in a legal context and to attract privilege."

On the facts, the Court did not consider there to be any "real doubt" that Dechert was appointed as a law firm for its legal expertise, which extends "not only to advice on black letter law and its application... but also to the practical aspects of legal proceedings and preparations thereof." There was authority to the effect that a lawyer's skills included taking statements, assembling facts and handling evidence, such that investigatory work would ordinarily fall within the "legal context" and there was justification for a finding that Dechert was engaged to conduct the investigation through a lawyer's eyes: the Court rejected the suggestion by Mr. Al Sadeq that Dechert was stepping into the shoes of the public prosecutor or acting in a similar capacity. The issue was therefore ultimately whether there were grounds to infer that that Dechert had applied the test too widely: the Court did not consider that it had.


The judgment covers such significant ground that it will inevitably become a key authority in relation to privilege issues. The Non-Party Issue in particular seems likely to be one which may fall to be revisited, especially in light of the Court's rejection of the assertion advanced on behalf of Mr. Al Sadeq that differing approaches may need to be taken in respect of third parties whose involvement is "equivalent to" that of the party to proceedings, and there is obvious potential for the correctness of the Three Rivers (No. 5) Principle to be revisited in the course of a Supreme Court appeal.

Parties are now able to take comfort from the increased clarity that the judgment has provided on the position regarding legal advice privilege and its applications to investigations, and the Court has provided further assurance on a balance of probabilities threshold applying to application of the iniquity exception.

More generally, the judgment should provide potential litigants with reassurance as to the extent to which legal professional privilege remains protected under English law, including in the context of applications to challenge it.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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