High Court grants ENRC right to appeal landmark privilege ruling in SFO trial

The High Court has granted Eurasian Natural Resources (ENRC) permission to appeal the landmark decision on litigation privilege handed down in its investigation by the Serious Fraud Office (SFO).

Mrs Justice Andrews ruled in May that documents shared between ENRC and its former law firm Dechert during an internal investigation into alleged misconduct would not be protected by legal professional privilege in the SFO fraud trial, sparking concerns in the legal market that the decision would deter companies from self-reporting.

The SFO is investigating the mining giant over allegations of fraud, bribery and corruption in Kazakhstan and a country in Africa.

The battle that ENRC is now appealing relates to what material could be covered by legal privilege ahead of disclosure in the investigation.

“There is a recognised public interest in the SFO being able to go about its business of investigating and prosecuting crime,” Andrews J said. “The sort of evidence which one would expect to be found in the disputed documents is likely to be of considerable value to its current investigation, particularly as Dechert were investigating matters much nearer in time to the events in question.

“Moreover, ENRC repeatedly promised that it would give full and frank disclosure of the results of its internal investigations to the SFO, but then changed its mind. If the documents are not privileged, there is no reason why the Court should exercise its discretion in a manner that would enable ENRC to escape compliance with those promises.”

Andrews J ruled that litigation privilege can only protect documents prepared with the sole or dominant purpose of conducting litigation and that it cannot protect documents produced as part of an investigation. She ruled that these documents were likely to be of significant public interest and integral to the SFO investigating and prosecuting crime.

The Dechert documents relate to evidence given to the firm by individuals, including employees and former employees or officers of ENRC and of its subsidiary companies when asked about the events being investigated, and which the company believes are subject to litigation privilege because there was the chance the investigation could have proceeded to prosecution.

The ENRC later struck Dechert off the case over claims the firm overcharged it by £11m in legal fees.

It is now represented by Signature Litigation partners Graham Huntley and Daniel Spendlove in this case, who instructed Fountain Court’s Richard Lissack QC and Tamara Oppenheimer.

At the time, founding partner of Signature Litigation Graham Huntley told The Lawyer: “This is the first case in which the Court has had to consider whether litigation privilege is engaged in a criminal investigation involving the SFO. The effect of this decision is that it is much harder to claim litigation privilege in the criminal context than in a civil one. This is unprincipled and illogical.”

A spokesman for ENRC said at the time: “We are very surprised by this ruling and we will appeal today’s decision because the effect of this judgment is that a party who wishes to consult a lawyer in relation to an SFO dawn raid or criminal investigation is not entitled to the protections afforded by litigation privilege.”

The director of the SFO instructed Jonathan Fisher QC of Red Lion Chambers.

Signature was approached for comment.

The legal line-up:

For the claimant, the Director of the Serious Fraud Office

Red Lion Chambers’ Jonathan Fisher QC, instructed by the Director of the Serious Fraud Office

For the defendant, ENRC

Fountain Court’s Richard Lissack QC and Tamara Oppenheimer, instructed by Signature Litigation patners Graham Huntley and Daniel Spendlove