A recent decision of the Court of Appeal makes a good subject for a short, end-of-term post about the equitable discretion – now codified in CPR 31.20 – to restrain the use of a privileged document which has been disclosed in error.
In Atlantisrealm Ltd v Intelligent Land Investments (Renewable Energy) Ltd, the Court of Appeal added a ‘modest gloss’ to the principles it had formulated in Al Fayed v The Commissioner of Police for the Metropolis and applied in Rawlinson & Hunter Trustees SA v Director of the Serious Fraud Office (No 2) in relation to CPR 31.20. The gloss extended the principle from the solicitor who first reviewed disclosure, and who did not appreciate that a document had been disclosed in error, to his ‘more percipient’ colleague, who did. The Court of Appeal also rejected the suggestion that where the mistake as to disclosure is made by a very junior lawyer, that lawyer has to give evidence in order for the principle to apply.
CPR 31.20 provides: ‘Where a party inadvertently allows a privileged document to be inspected, the party who has inspected the document may use it or its contents only with the permission of the court’. In Atlantisrealm, a junior lawyer made a mistake in categorising an email, labelling it disclosable rather than either privileged or requiring review by Mr Cook, a more senior lawyer. The email was disclosed and subsequently inspected. Mr Fallon, a solicitor for the opposing party, Intelligent Land, reviewed the disclosure but did not spot the mistake. He then had a meeting with another solicitor for Intelligent Land, a Mr Newton.
The email was then sent to witnesses for comment, before Mr Newton sent an email to Mr Cook about arrangements for a settlement meeting, which concluded: ‘I don’t know if you have started your consideration of disclosure yet? The email below will be of interest to you.’ The email, while not fatal to the disclosing party’s case, provided useful ammunition in relation to the issue of contractual construction, and in particular the parties’ shared subjective understanding.
Mr Cook responded immediately, saying that the email was privileged and had been disclosed inadvertently, and requesting its deletion. Mr Newton refused, and Atlantisrealm applied under CPR 31.20 for an injunction prohibiting Intelligent Land from making use of the email.
Mr Cook explained in a witness statement how the disclosure exercise had been carried out. Jackson LJ said that the account of how disclosure had been carried out was in line with what one would expect in any case where people, rather than machines, were carrying out the disclosure exercise: a small team of trainees and junior lawyers carried out a preliminary sift. They identified documents which were obviously disclosable or obviously privileged and referred up to the Mr Cook any documents about which they were unsure. One of the young lawyers made a mistake, putting the email into the ‘disclosable’ category, when he or she ought to have classified it as privileged or referred it to Mr Cook
In Jackson LJ’s view, and in disagreement with the judge below, the fact that the junior lawyer who made the mistake did not give evidence was irrelevant, because it was ‘perfectly clear’ what had happened: ‘Neither [the responsible solicitor], nor the relevant partner, nor the client ever took a considered decision to waive privilege’ in respect of the email, which appeared in the list of documents ‘purely as the consequence of a mistake made by a junior lawyer’. This was therefore a case of inadvertent disclosure within the meaning of CPR 31.20.
The Court of Appeal accepted that the evidence showed that Mr Fallon, the first solicitor to review the documents, had thought that the email had been disclosed deliberately, because it was one of a number of emails between the opposing party and its solicitors which had been disclosed. Jackson LJ held however that the terms of the email from Mr Newton to Mr Cook showed that Mr Newton had appreciated that the email had been disclosed in error: ‘Mr Newton was drawing the email to Mr Cook’s attention in the belief that Mr Cook was unaware of it. If there had been a deliberate decision to disclose privilege in respect of such an important document, it is hardly likely that Mr Cook would have been unaware of it’.
The ‘modest gloss’ which the Court of Appeal added to the principles established in Rawlinson was to allow Moore-Bick LJ’s reference to ‘the understanding of the person who inspected the document’ to apply in a ‘two solicitor’ situation, so that ‘If the inspecting solicitor does not spot the mistake, but refers the document to a more percipient colleague who does spot the mistake before use is made of the document, then the court may grant relief. That becomes a case of obvious mistake.’
All that remained was for the Court of Appeal to consider how the discretion should be exercised: whether to permit the receiving party to make use of the document, or to prohibit its use. This is an equitable jurisdiction, long pre-dating CPR 31.20, and there are no rigid rules.
Atlantisrealm argued that they had made extensive use of the email and their witnesses were well aware of it, and that they would suffer and perceive an injustice if they were not permitted to use it at trial. Jackson LJ observed that the ‘use’ relied on had all taken place after a meeting between Mr Newton and Mr Fallon at which Mr Fallon had drawn Mr Newton’s attention to the email. He concluded that it was not therefore unjust to grant an injunction prohibiting its use; and the judge at first instance had indicated that this was how he would have exercised his discretion. The injunction was therefore granted.
In closing, Jackson LJ made three general observations. First, in the electronic age, even with the help of sophisticated software, disclosure of documents can be a massive and expensive operation. Mistakes will occur from time to time. Secondly, when privileged documents are inadvertently disclosed (as is bound to happen occasionally), if the mistake is obvious, the lawyers on both sides should co-operate to put matters right as soon as possible. And thirdly, the disclosure or discovery procedure in any common law jurisdiction depends upon the parties and their lawyers acting honestly, even when that is against a party’s interest. The duty of honesty rests upon the party inspecting documents as well as the party disclosing documents.
Jackson LJ’s final comment? That it should not be necessary for either the parties or the courts to devote their resources to resolving disputes of this nature between solicitors.