Litigation privilege and third parties
The principle that a client should be able to consult a solicitor in confidence without fear of having to disclose communications between them at a later date is a fundamental right that has long been recognised by common law. But how far does this protection extend? A successful claim to privilege will allow a party to withhold communications from production to a third party or the court. Whether a document is privileged will always depend on the facts.
In the recent case of Ahuja Investments Ltd v Victorygame Ltd  EWHC 1543 (Ch), the High Court held that a letter of claim and response letter between a claimant and a third party, benefited from litigation privilege.
Proceedings were issued against Victorygame Ltd for misrepresentations allegedly made by them in a property transaction. Before issuing proceedings, the claimant wished to obtain information from its former solicitor who acted on their behalf in the relevant property transaction. The claimant issued a letter of claim under the pre-action protocol for professional negligence to the solicitor requesting the required information. The claimant had no intention on pursuing proceedings against the solicitor. The purpose of the letter was solely to elicit information to use in the litigation against Victorygame Ltd. The claimant justified its actions by way of a witness statement, in which it was explained that the solicitor had previously failed to co-operate with them and they felt the only way to extract the relevant information was to threaten professional negligence proceedings.
Victory game Ltd sought disclosure of the letter of claim and response from the claimant during the course of their on-going litigation. The claimant refused on the grounds that they were protected by litigation privilege.
The judge applied the dominant purpose test and held that the purpose of the correspondence was to obtain information for use in these proceedings. The judge acknowledged that there had been an element of deception by the claimant in obtaining the information, however there was no principled reason as to why privilege should not be available in this instance.
This case serves as a helpful reminder that Litigation privilege protects communications with third parties providing that they come into existence with the dominant purpose of gathering evidence in circumstances where legal proceedings are in existence or in reasonable prospect.
If you would like any further information or advice, please do not hesitate to get in touch with our Litigation and Dispute Resolution team.
*This information is for guidance purposes only and does not constitute, nor should be regarded, as a substitute for taking legal advice that is tailored to your circumstances.