Rix J’s decision on the circumstances in which ‘iniquity’ may displace a claim to Legal Professional Privilege.

‘[The Defendant] invokes the doctrine, in itself well established, that, in the words of Lord Sumner in O’Rourke v. Darbishire [1920] A.C. 581 , 613:

No one doubts that the claim for professional privilege does not apply to documents which have been brought into existence in the course of or in furtherance of a fraud to which both solicitor and client are parties. To consult a solicitor about an intended course of action, in order to be advised whether it is legitimate or not, or to lay before a solicitor the facts relating to a charge of fraud, actually made or anticipated, and make a clean breast of it with the object of being advised about the best way to meet it, is a very different thing from consulting him in order to learn how to plan, execute, or stifle an actual fraud.”

This doctrine, or exception to the general rule of legal professional privilege, is exemplified (by)… R. v. Cox 14 Q.B.D 153 , Stephen J., referring to Lord Brougham’s judgment in Greenough v. Gaskell (1833) 1 M. & K. 98, said,

“The reason on which the rule [of privilege] is said to rest cannot include the case of communications, criminal in themselves, or intended to further any criminal purpose, for the protection of such communications cannot possibly be otherwise than injurious to the interests of justice, and to those of the administration of justice. Nor do such communications fall within the terms of the rule. A communication in furtherance of a criminal purpose does not ‘come into the ordinary scope of professional employment.’ A single illustration will make this plain. It is part of the business of a solicitor to draw wills. Suppose a person, personating some one else, instructs a solicitor to draw a will in the name of the supposed testator, executes it in the name of the supposed testator, gives the solicitor his fee, and takes away the will. It would be monstrous to say that the solicitor was employed in the ‘ordinary scope of professional employment.”’

In Ventouris v. Mountain [1991] 1 W.L.R. 607 , 611, Bingham L.J. spoke of the rule of privilege existing “in the absence of iniquity.”

It would seem that the concept of iniquity covers

  • “crime or fraud” ( Reg. v. Cox, 14 Q.B.D 153 , 165),
  • the “criminal or unlawful” ( Bullivant v. Attorney-General for Victoria [1901] A.C. 196 , 201), and
  • “all forms of fraud and dishonesty such as fraudulent breach of trust, fraudulent conspiracy, trickery and sham contrivances” ( Crescent Farm (Sidcup) Sports Ltd. v. Sterling Offices Ltd. [1972] Ch. 553 , 565):

see Barclays Bank Plc. v. Eustice [1995] 1 W.L.R. 1238 , 1249C–D, per Schiemann L.J.

In the latter case the Court of Appeal held that the effecting of transactions at an undervalue for the purpose of prejudicing the interests of a creditor…could be regarded as “iniquity” in this context, and that it was sufficient for the loss of privilege that there existed a “strong prima facie case” of such a purpose.

On the other hand, Schiemann L.J. also cited Goff L.J. in Gamlen Chemical Co. (U.K.) Ltd. v. Rochem Ltd. [1983] R.P.C. 1; (unreported), 7 December 1979; Court of Appeal (Civil Division) Transcript No. 777 of 1979 , where he said:

the court must in every case, of course, be satisfied that what is prima facie proved really is dishonest, and not merely disreputable or a failure to maintain good ethical standards, and bear in mind that legal professional privilege is a necessary thing and is not lightly to be overthrown, but on the other hand, the interests of victims of fraud must not be overlooked. Each case depends on its own facts.”

…I believe that I can find there to be a strong prima case of criminal or fraudulent conduct in the obtaining of such information concerning Mr. A’s accounts….In my judgment, such conduct constitutes crime, fraud or iniquity within the scope of the doctrine discussed above.

In my judgment, it has to be recognised that there is a clash of principle and public interest in this area. There is, of course, the very strong public interest in legal professional privilege, for which I need not cite authority. There is also the public interest, no less strong, in combating crime or fraud and in protecting the victims or potential victims of it. Thirdly, there is the public interest, reflected in Kuruma v. The Queen [1955] A.C. 197 , in trying cases on relevant evidence in the attempt to arrive at a true and just determination at trial. How can these interests best be reconciled?

I acknowledge that no case has gone so far as Mr. Freedman now submits I should go in extending the exception to privilege on which he relies. On the other hand, the exception itself is an established one, and I know of no case in which the current issue has arisen for decision…

It seems to me that if investigative agents employed by solicitors for the purpose of litigation were permitted to breach the provisions of such statutes or to indulge in fraud or impersonation without any consequence at all for the conduct of the litigation, then the courts would be going far to sanction such conduct… it seems to me that criminal or fraudulent conduct for the purposes of acquiring evidence in or for litigation cannot properly escape the consequence that any documents generated by or reporting on such conduct and which are relevant to the issues in the case are discoverable and fall outside the legitimate area of legal professional privilege.

…In such circumstances, it does not seem to me to be too great an intrusion on legal professional privilege to require that documentation such as is in question in this case should be disclosed. Otherwise the position would be that the party employing the criminal or fraudulent agent would have it entirely within his own power to decide which of the criminally or fraudulently acquired information he was willing to rely on and disclose and which he was not. Where such a party will be asking the court to make inferences from such material, it is only fair that such material should be seen as a whole.

[This judgment has been edited and reformatted for ease of reading. Sub-paragraphing has been added.] You can find the official law report of this case on Westlaw.