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Iniquity exception to privilege JSC BTA Bank v Ablyazov

This judgment considers the iniquity exception to legal professional privilege and the point at which a client conducts himself so dishonestly that the very advice given or litigation pursued by the solicitor is in furtherance of a fraud or crime and no longer has the benefit of absolute protection from disclosure. The case is JSC BTA Bank v Mukhtar Ablyazov and others [2014] EWHC 2788 (Comm).

Communications between a solicitor and his client for the purposes of seeking or giving legal advice, or for the purposes of litigation, are normally privileged. The principle is that clients should be able to speak freely to their lawyers without fear of their communications being made known to others. Sometimes in the course of those communications, a client will instruct a solicitor to pursue a case that the client knows to be false. The question considered by this judgment is the point at which the client conducts himself so dishonestly that the very advice given or litigation pursued by the solicitor is in furtherance of a fraud, crime or similar iniquity by the client. In those circumstances, the communications between a solicitor and his client that would normally be subject to legal professional privilege can be held not to have the benefit of that absolute protection from disclosure (the iniquity exception).

The litigation between JSC BTA Bank and Mukhtar Ablyazov, its former chairman, who allegedly defrauded it of more than $6bn (£3.6bn), has kept the courts and a number of lawyers busy for more than five years now. The latest judgment to emerge from this ongoing battle relates to whether the iniquity exception applies to communications between Mr Ablyazov and the three firms of solicitors he instructed during that period: Clyde & Co, Stephenson Harwood and Addleshaw Goddard (which still acts for him)…

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