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Litigation Privilege – are your documents protected?

Litigation Privilege – are your documents protected?
March 5, 2019 Emily Parry

As some may be aware, in the litigation process, there is a stage where you have to disclose documents to the other side. These documents may then be inspected. Disclosure also includes documents that my harm your Claim, or your Defence, as well as documents that support your position.

However, there are documents which may be protected from being inspected. One protection is known as Litigation Privilege. For documents to claim Litigation Privilege, the documents must have been created for the “dominant purpose” of being used in contemplated litigation. Therefore, to claim Litigation Privilege, it must be established that litigation was reasonably contemplated or anticipated; it would not be sufficient to show that it was a “mere possibility”, or a “general apprehension of future litigation”. Further, the documents must also have been made to enable legal advice to be sought or given, and/or seeking or obtaining evidence or information to be used in, or in connection with, the anticipated litigation.

The recent case of Sotheby’s v Mark Weiss Limited & Others [2018] EWHC 3179 (Comm) regards the contract of the sale of a painting. The case included issues over documents which were claimed to be protected by Litigation Privilege.

Background
Sotheby’s contracted to refund the purchase price of the painting if it was subsequently determined to be a counterfeit. Sometime after the purchase of the painting, the buyer had queries in respect of its authenticity. These questions immediately caused Sotheby’s to instruct an expert to inspect the painting. This expert reported to Sotheby’s orally that the painting was likely a counterfeit. Sotheby’s subsequently instructed this expert to produce a written report, and instructed a second expert to conduct a peer review. This peer review also considered the painting to be counterfeit. Based on this information, Sotheby’s assembled a committee to decide whether the buyer should be refunded, and proceedings brought against the seller of the painting. The committee decided on the refund and to commence proceedings.

Issue
During Disclosure, the existence of the correspondence between Sotheby’s and the experts were disclosed. However, inspection of the documents was withheld on the grounds of Litigation Privilege. The seller applied to Court to inspect them.

Court’s Decision
The Court agreed that the correspondence was created in anticipation of future litigation. However, it was also brought into existence to enable Sotheby’s to decide whether the painting was counterfeit, and if so, to rescind the contract to its seller. It was decided that the “dominant purpose” of the correspondence was not in relation to the litigation, as both reasons were important. Therefore, the correspondence was not protected, and could be inspected by the other parties.

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