R Stewart Ford v The Financial Services Authority Peter Johnson and Mark Owen (Interested Parties)
| Jurisdiction | England & Wales |
| Judge | The Hon Mr Justice Burnett |
| Judgment Date | 11 October 2011 |
| Neutral Citation | [2011] EWHC 2583 (Admin) |
| Docket Number | Case No: CO/12389/2010 |
| Court | Queen's Bench Division (Administrative Court) |
| Date | 11 October 2011 |
[2011] EWHC 2583 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
The Hon Mr Justice Burnett
Case No: CO/12389/2010
and
Hodge Malek QC and Saima Hanif (instructed by Withers LLP) for the claimant
Bankim Thanki QC and Andrew George (instructed by the FSA) for the defendant
The interested parties in person
Hearing dates: 21–22 July 2011
Introduction
The issue for decision in this claim for judicial review is whether the claimant and interested parties can assert joint interest legal privilege over eight emails and their attachments which were sent to them by Messrs Irwin Mitchell between February and June 2008. This case is not concerned with litigation privilege but only with legal advice privilege. Mr Ford and Mr Owen were directors of Keydata Investment Services Limited ["Keydata"] and Mr Johnson was its compliance officer. For convenience I shall refer to them as the 'executives'. Irwin Mitchell had been retained in December 2007 by Keydata to advise in connection with an investigation by the Financial Services Authority ["FSA"]. There is no doubt that the legal advice provided by Irwin Mitchell was privileged in the hands of Keydata. The executives assert that Irwin Mitchell were also advising them as individuals and not simply as directors and officers of Keydata. They say that was because it was obvious, and explicitly contemplated by them and Irwin Mitchell, that in time the executives would become vulnerable to investigation by the FSA. The common understanding was that the advice was personal as well as corporate. In due course the FSA did indeed open investigations into the executives. Keydata went into administration. The FSA was subsequently provided with the emails and attachments by the administrators of Keydata, who waived the company's privilege. The FSA has relied upon the content of those emails and attachments in formal investigation reports and warning notices served on the executives pursuant to the statutory regulatory scheme. The administrators explicitly did not, indeed could not, waive any privilege in the documents attaching to the executives. The FSA did not investigate with the executives whether they had privilege in the documents before they were used to inform the investigation reports and warning notices. In those circumstances, the executives contend that the FSA has acted unlawfully in using material that was in fact subject to legal professional privilege.
The communications over which privilege is claimed
There are eight emails from Sarah Wallace of Irwin Mitchell addressed to the executives at their Keydata email addresses which are in dispute in these proceedings, together with their attachments.
i) 7 February 2008 at 09.57 with attachments from Grant Thornton UK LLP ["Grant Thornton"];
ii) 7 February 2008 at 17.22 entitled 'advice';
iii) 26 February 2008 forwarding an email from Grant Thornton;
iv) 3 March 2008 attaching a report from Grant Thornton;
v) 16 April 2008 attaching a report from Grant Thornton;
vi) 18 April 2008 attaching a note of a conference with counsel held the previous afternoon;
vii) 2 May 2008 forwarding an email from Grant Thornton;
viii) 19 June 2008 with attachments from Grant Thornton.
Permission to apply for judicial review was granted in relation to these documents alone on the joint privilege issue. Other grounds had been advanced in the claim form, on which permission was refused. None has been renewed. In particular, an argument that the administrators had no power to waive the privilege of Keydata has not been pursued. It has become common ground that the administrators were entitled to waive the company's privilege and have done so effectively.
Permission to apply for judicial review was granted by Mitting J in relation to the emails from Ms Wallace together with all the various attachments, or forwarded emails, from Grant Thornton. All of the matters emanating from Grant Thornton were headed 'subject to legal professional privilege'. It may well have been the belief of Ms Wallace that communications from Grant Thornton were covered by legal professional privilege, even though they did not contain legal advice and did not come from lawyers. Alternatively, it may have been thought that by attaching those documents to an email from a solicitor, or incorporating them within, they were provided with the cloak of privilege.
It is as well to deal with the status of the material which came from Grant Thornton at the outset.
In the skeleton argument filed on behalf of the claimant it was stated that he was not seeking to argue that advice received from an accountant is protected by legal professional privilege. In oral argument Mr Malek QC indicated that his client's concern was not with the Grant Thornton material, but with advice from Irwin Mitchell contained in particular in the second email of 7 February 2008 and the note of the conference with counsel sent under cover of the email of 18 April. He emphasised that these proceedings would not have been brought if all that was in issue was the Grant Thornton material. The claimant's case appeared to be that by attaching a document in which there was admittedly no privilege to an email in which there was (or might be), the attachment became clothed in privilege. However, whilst not formally conceding that the claimant could not assert legal advice privilege over the Grant Thornton material, Mr Malek did not press the point in argument. The Court of Appeal has recently reaffirmed that legal professional privilege 'only applies (apart from statute and an exceptional case such as Calley v. Richards 19 Beav 401) to communications with a member of a relevant legal profession': See R (Prudential) v. Income Tax Special Commissioner [2011] 2 WLR 50 at para [72] and [82] to [85] per Lloyd LJ. See also the discussion of Wheeler v le Marchant (1881) 17 Ch D 675 in the judgment of the Court of Appeal in Three Rivers DC v Bank of England (No.5) [2003] QB 1556 at paras [17] to [26]. That being so, none of the attachments to the emails which came from Grant Thornton, nor their advice which was forwarded by Irwin Mitchell attracts legal professional privilege.
Background facts and the circumstances in which privilege was waived by the administrators on behalf of Keydata
Keydata was founded by the claimant in 1997. It started by providing marketing and sales information to independent financial advisers. It moved into the management of third party assets and in due course marketed and distributed financial products. Neither the background to nor the detail of the FSA's concerns regarding Keydata illuminate the legal professional privilege issue in this claim. In short, the reason for the appointment of FSA investigators into the affairs of Keydata on 18 December 2007 was that the FSA believed that Keydata may have contravened the FSA's Principles for Businesses and Rules in relation to one product in particular and the way in which it was sold and marketed. In January 2008 Irwin Mitchell were retained to advise Keydata. On 2 September 2008 the FSA notified the claimant and interested parties that they too were the subject of formal investigation. The notices of appointment of investigators into the conduct of the executives were issued on 29 August 2008. Having obtained instructions that the executives wished her to represent them in connection with that investigation, Sarah Wallace of Irwin Mitchell confirmed that to the FSA. It is in those circumstances that the FSA has throughout accepted that any communications between the executives and Irwin Mitchell from then on is subject to legal professional privilege. The investigation continued. Preliminary Investigation Reports were served on Keydata and each executive on 1 June 2009, to which they responded later that summer. On 8 June 2009 Keydata was put into administration by the Court on the application of the FSA and Price Waterhouse Cooper LLP ("PwC") were appointed as administrators. Irwin Mitchell ceased to act for the company. Thereafter, the claimant sought independent advice from Withers LLP (who have continued to advise and act for him) and the other two executives have acted in person in connection with the investigation and these proceedings.
Unknown to the claimant (or the other executives), on 19 August 2009 the FSA used its statutory powers to compel PwC to provide an electronic copy of the claimant's email records. Those records contained all of the emails which form the subject matter of this claim. The FSA investigators realised that the material provided to them contained material which was subject to legal professional privilege. Before reading it, and thus taking it into account as part of the investigation, the FSA approached PwC in February 2010 with a request that they, as administrators, waive the privilege enjoyed by Keydata. The FSA confirmed that the request for waiver 'will not extend to any personal legal advice received by Mr Ford from Withers or others and the FSA will not review any material which appears to fall into this category…' After taking legal advice on 1 March 2010 PwC waived privilege in these terms:
"… we have now heard back from Freshfields and can confirm as follows:
1. we are claiming privilege in relation to communications between Keydata and its lawyers and documents produced by its lawyers.
2. we are willing to waive...
To continue reading
Request your trial
-
Martin Charles Armstrong v Berrymans Lace Mawer LLP (Trading as BLM)
...relevant documents: see Leeds v Lemos [2017] EWHC 1825 (Ch) at [66]; R (on the application of Ford) v Financial Services Authority [2011] EWHC 2583 (Admin) at [63]; and Twin Benefits Ltd v Barker [2017] EWHC 177 (Ch) at [31]. The Winterthur case 80 Insofar as the Administrators rely upon......
-
Stewart Ford v Financial Services Authority—and Peter Johnson and Mark Owen and Another
...Burnett 1 This judgment should be read in conjunction with, and as a continuation of, the judgment handed down on 11 October 2011 [2011] EWHC 2583 (Admin). On that occasion, an Order was made which contained a number of declarations relating to the two documents in respect of which I had c......
-
Sports Direct International Plc v Minor and Others
...and its shareholders; a company and its director, and partners.' 6 6 39-140 Burnett J. in R. (Ford) v Financial Services Authority [ [2011] EWHC 2583 (Admin)], stated that the existence of a joint interest will be a question of fact in each case: 'In searching for the true factual position ......
-
Wong, Wen-Young (Winston Wong) v Grand View Private Trust Company Ltd
...to him. Ground 2 The Learned Judge further erred (at § 28–29) in treating the dictum of Burnett J in R (Ford) v Financial Services [2011] EWHC 2583 (Admin) at § 40 as the applicable test and/or a decisive factor in determining the existence of joint privilege. In particular, the conclusion......
-
Dispute Resolution Group Newsletter - December 2011
...contrary view that "once common interest privileged, always common interest privileged". R (on the application of Ford) v The FSA [2011] EWHC 2583 (Admin) Joint interest privilege where legal advice given to a company and its Solicitors provided legal advice to a company (K). After the FSA ......
-
Privilege - Recent Developments
...which can have tactical and cost disadvantages. Case references R (on the application of Ford) v Financial Services Authority [2011] EWHC 2583 (Admin). Please click here for a full copy of the judgment. Stiedl v Enyo Law LLP and others [2011] EWHC 2649 (Comm). Please click here for a full c......
-
Privilege Update - What Happens When Legally Privileged Documents End Up In The Wrong Hands
...of Stewart Ford) (Claimant) v Financial Services Authority (Defendant) & (1) Peter Johnson (2) Mark Owen (Interested Parties) [2011] EWHC 2583 (Admin) The key issue in this case was whether the investigating regulatory body, the FSA, was entitled to use privileged emails passing between......
-
DISCLOSURE OF THE COMPANY'S PRIVILEGED DOCUMENTS TO SHAREHOLDERS AS AN APPLICATION OF JOINT INTEREST PRIVILEGE
...Hollander QC, Documentary Evidence (London: Sweet & Maxwell, 13th Ed, 2018) at para 19-03; R v The Financial Services Authority [2012] 1 All ER 1238. 103 CIA Barca de Panama SA v George Wimpey & Co Ltd [1980] 1 Lloyd's Rep 598; see also Yunghanns v Elfic Pty Ltd (No 2) [2000] VSC 113 at [38......