Richard McMeeken

The dispute

The dispute was about public procurement and the pursuer sought to recover documents from each of the defenders. The defenders lodged the relevant documents with the court in confidential envelopes and argued that the contents should not be disclosed on two grounds. First, that the documents were protected by legal professional privilege (LPP). Secondly, that they were protected by “without prejudice” privilege. The pursuer argued that the first defender had waived LPP, and a dispute arose as to the correct approach to take in Scotland where “without prejudice” privilege was asserted in relation to the production of documents.

Waiver of legal professional privilege

On the first point, the first defender had provided documents voluntarily to the pursuer, each of which contained detailed summaries of legal advice provided to the first defender. The pursuer argued that, as it had acted in a way which was inconsistent with the maintenance of confidentiality over that advice, it ought to be deemed to have waived privilege, consistent with the decision of the Inner House in Scottish Lion Insurance Co Ltd v Goodrich Corp 2011 SC 534 at 46.

The first defender agreed that the approach set out in Scottish Lion by Lord Reed was the correct one but maintained that it favoured the retention of privilege in this case. The documents only suggested that legal advice had been taken which was not surprising in the context of a complex procurement dispute. They did not reveal, in any meaningful sense, what the advice had been. If the court did consider that privilege had been waived, any such waiver was limited/partial, rather than being indicative of a general waiver.

Lord Richardson agreed with parties that the approach to waiver in Scottish Lion was the correct one. The question was objective and so the first defender’s subjective intention was not relevant. The question was whether wavier could be inferred from the circumstances, while the court was also mindful that where the issue of waiver arises in the course of litigation, considerations of fairness may bear on whether a party’s conduct has been inconsistent with the maintenance of confidentiality.

There was no rule that a party who waived privilege in relation to one communication was taken to having waived it in relation to all. However, in the present case, it was clear that the first defender had waived it entirely. The papers disclosed aspects of the legal advice tendered to them and that was inconsistent with the first defender’s right to resist the production of material on grounds of LPP. There was nothing in the facts or the manner of the wavier which entitled the first defender to argue partial waiver. Accordingly, it had waived its right to resist disclosure of the legal advice founded upon in the two papers.

“Without Prejudice” Privilege

The argument about “without prejudice” privilege will be of interest to English and Scots lawyers alike and provides an interesting contrast between the approach taken in the two jurisdictions.

The pursuer’s principal position was that Scots law did not recognise “without prejudice” at all as a bar to the production of documents required by a court order. While in England & Wales, there was a clear recognition of a “without prejudice” rule governing the admissibility of evidence founded upon the public policy of encouraging litigants to settle their differences rather than litigate (Rush & Tompkins v Greater London Council [1989] 1 AC 1280 (HL(E)) at 1299). That rule extended to prevent recovery or production of documents covered by it. However, that could be contrasted with the position in Scotland where questions arising from “without prejudice” communications were not dealt with at the stage of considering recoverability of documents, only at the stage of considering admissibility of evidence. That exercise involved consideration of these documents in the context of the surrounding circumstances.

The defenders’ position was simply that the general rule was that nothing written “without prejudice” should be looked at without the consent of both parties, while accepting that unequivocal admissions made in that context might be admissible. The English principles were applicable in Scotland and there was no obvious reason that would justify a different outcome north and south of the border. The policy underlying “without prejudice” privilege was important and parties did not expect the content of negotiations to be opened up for inspection in court and to the wider world. If the court allowed reference to be made to these documents, there would be a hugely chilling effect on negotiations.

Again, Lord Richardson preferred the pursuer’s position. While the defenders based their argument on the law in England & Wales, it was clear that the courts in Scotland had not adopted the English approach. While the guiding principle was the same, Scots law took a more pragmatic approach to the question of how it is to be applied in practice and are more willing to find that admissions in documents which contains an offer to compromise are to be treated as admissible. The court effectively strikes a different balance between the competing public interests of promoting settlement, on the one hand, and the open administration of justice on the other. The pursuer was right to say that, because of the need to consider the admissibility of the documents in their context, which was not properly an exercise that should be undertaken at the stage of recovery of documents. To do otherwise would mean that the court was determining admissibility of evidence without being able to hear relevant evidence relating to these documents, which would be unsatisfactory.

Comment

The court’s full discussion on these important issues of privilege is a helpful clarification for practitioners. While the rules on implied waiver of LPP were not in dispute (and largely settled since Scottish Lion) it was interesting to see the court’s approach to the particular issues in this case and to the more challenging question of partial waiver. On the issue of “without prejudice” privilege, the court’s decision once again highlights some key differences between Scotland and England where recovery of documents is concerned.

English lawyers and parties are regularly surprised at the lack of a formal disclosure process in Scotland where each party is required to make available to the other party documents that are relevant to the issues in dispute. The idea that documents covered by “without prejudice” privilege are, in principle, recoverable in Scotland will, no doubt, provide further food for thought.

Richard McMeeken is a partner at Morton Fraser MacRoberts