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Expert Insights

08 September 2021

Be careful what you reference: when witness evidence waives privilege

The extent to which a statement of case or witness statement makes reference to documents, thereby giving rise to a right to inspection by the opponent, is one that often arises in practice. The issue is particularly acute when the document in question is protected by legal professional privilege and the party would otherwise be entitled to withhold it from production. The recent decision of the High Court in Scipharm Sarl v Moorfields Eye Hospital NHS Foundation Trust adds to the jurisprudence in this area, providing guidance on what constitutes sufficient reference to a document to trigger the right to inspection and how the court may exercise its discretion to order disclosure of privileged material.

Background

The claimant and the defendant entered into a pharmaceutical development agreement (“the agreement”). The claimant alleged that the defendant had breached the terms of the agreement by losing its good manufacturing practice status. This meant the defendant was unable to enter into a commercial manufacturing agreement with the claimant in relation to a particular pharmaceutical product. The claimant alleged that it had incurred significant losses as a result of the defendant’s breach.

One of the claimant’s witnesses, Mr Becker, had referred in his witness statement to a conversation between the claimant’s solicitor and Ms Beveridge, one of the defendant’s employees at the time who was involved in negotiations with the claimant concerning the development of the pharmaceutical product. The most significant statement appeared at paragraph 9 of the witness statement and read as follows:

“Moorfields [the defendant’s] solicitors wrote in their letter dated 5 March 2018 that SciPharm (the Claimant)… was not prepared to commit to non-refundable reservation and cancellation costs given the uncertainty in timing and success of obtaining market authorisation. Ms Beveridge confirmed to our solicitor that in reality Moorfields did not consider cancellation fees to be appropriate given the size of its manufacturing business. I do not know who gave this incorrect information to Moorfields solicitors in March 2018.”

The defendant submitted that there was specific allusion to attendance notes or similar documents arising from the claimant’s solicitors’ discussions with Ms Beveridge, and made an application under CPR 31.14 for disclosure and inspection of these documents. The defendant argued that it would be unfair to refuse disclosure as the information deployed in the witness statement was not consistent with a witness statement provided by Ms Beveridge some three years previously.

The questions for the court to determine were twofold:

  • Had the defendant identified as a threshold issue that the relevant documents had been “mentioned” in the witness statement relied upon so as to engage CPR 31.14 and (subject to the court’s discretion) a right to inspect the documents (the “threshold issue”)?
  • If there was sufficient mention of the documents, should the court use its discretion to order inspection where the documents in question were by their nature privileged? The question therefore came to this: if there had been a mention of the relevant documents, had there been an express or implied waiver of privilege sufficient to permit inspection to take place (the “waiver issue”).

The court granted the application for disclosure and inspection under CPR 31.14.

In relation to the threshold issue, the court held that whilst there was no evidence as to the basis on which the information relating to Ms Beveridge came to be included in the witness statement, in the absence of an express explanation the inference to be drawn was that it must have been by reference to an attendance note containing the relevant information. It was unreal to suppose that the information had come from Mr Becker’s memory.

As to the waiver issue, the court considered the judgment in Magnesium Elektron v Neo Chemicals and Oxides (Europe) Limited as to when and in what circumstances waiver could arise. Paragraph 43 of that judgment read as follows:

“The general rule is that:

‘Where a person is deploying in court material which would otherwise be privileged, the opposite party and the court must have the opportunity of satisfying themselves that what the party has chosen to release from privilege represents the whole of the material relevant to the issue in question. To allow an individual item to be plucked out of context would be to risk injustice through its real weight or meaning being misunderstood.

The key word here is “deploying”. A mere reference to a privileged document in an affidavit does not of itself amount to a waiver of privilege, and this is so even if the document referred to is being relied on for some purpose, for reliance in itself is said not to be the test. Instead, the test is whether the contents of the document are being relied on, rather than its effect. The problem is acute in cases where the maker of an affidavit or witness statement has to give details of the source of his information and belief, in order to comply with the rules of admissibility of such affidavit or witness statement. Provided that the maker does not quote the contents, or summarise them, but simply refers to the document’s effect, there is apparently no waiver of privilege …'”

On this basis, the court held that paragraph 9 of Mr Becker’s witness statement was plainly an attempt to rely upon the material referred to rather than referring in passing to the existence of the documents. In those circumstances, it would be unfair to allow Mr Becker to rely upon the assertions made in his witness statement when these were in conflict with the witness statement apparently signed by Ms Beveridge without disclosing the records of what Ms Beveridge in fact said.

Comment

The decision applies established legal principles, but is an important reminder of the rigour that practitioners must apply when it comes to preparing statements of case and witness evidence. As the court noted, the law takes privilege extremely seriously as a matter of policy. Practitioners would be well advised to adopt a similar approach and scrutinise any references to documents, whether direct or by specific allusion, so as not inadvertently to waive privilege. It should also be noted that, while the application in this case was made pursuant to CPR 31.14 and many cases will instead be subject to the Disclosure Pilot Scheme (DPS) in Practice Direction 51U, the DPS contains provisions to similar effect in paragraph 21.


This article was first published in Practical Law.

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