This privilege application arose in proceedings brought by PCP Capital Partners LLP and PCP International Finance Ltd (together, PCP) against Barclays Bank Plc. The underlying dispute concerns Barclays' fundraising following the 2008 financial crisis, which included investments made by Qatari entities (which has itself been subject to civil and criminal proceedings) and PCP.
In the context of the criminal and regulatory investigations into Barclays' conduct, the SFO and FCA interviewed a number of Barclays' employees regarding the relationship between Barclays and the Qatari investors, which was governed under multiple advisory services agreements (the ASAs).
In Barclays' disclosure to PCP, it either withheld those transcripts or provided redacted versions on the basis of legal professional privilege. Despite this, a number of documents disclosed to the SFO regarding the ASAs were subsequently deployed in open court and any privilege lost.
PCP sought disclosure of those transcripts, in un-redacted form, on the basis that Barclays had made multiple references within its witness statements and written arguments to the legal advice that it had received in relation to the ASAs. According to PCP, this meant that Barclays had therefore waived any privilege concerning legal advice contained in the transcripts or other contemporaneous documents sought.
Ultimately, Mr Justice Waksman held that Barclays had in fact waived privilege where the legal advice it received in relation to the ASAs was concerned. In his Judgment, Mr Justice Waksman set out a helpful summary of the approach to be taken by the court in determining issues of waiver:
- A purely narrative reference to the giving or receipt of legal advice will, without more, not constitute a waiver.
- Waiver requires reference to the "contents" or the legal advice, not merely its "effect".
- The "effect" and "content" distinction cannot be applied mechanistically, but must be construed in context. The court will therefore need to consider whether there is any reliance on the privileged material averted to, and the purpose and context of that reliance.
- If the court finds there has been a waiver, it then has to decide the issue or "transaction" underpinning the waiver, with the effect that any other privileged documents within the scope of that transaction will need to be disclosed.
Applying the effect/content distinction, the courts have distinguished between references to legal advice which have been made, for example, in compliance with a procedural requirement (which would not usually amount to a waiver) and references to legal advice as part of a party's pleading (which would constitute a waiver). Here, Barclays clearly fell into the second category, as it was held to have relied upon the legal advice received in an attempt to legitimise the transactions in dispute and, ultimately, to defend the claim.
While Mr Justice Waksman's judgment does not raise any novel points of law, it is a helpful – and stark – reminder of how easily privilege can be lost. If the substance of legal advice received is critical to your position, then the possibility of having to disclose the advice may be a trade-off worth risking. Otherwise, it begs the question whether it is worth referring to the advice at all.
