Shortly after the release of the Court of Appeal's judgment in ENRC v SFO [2018] EWCA Civ 2006 the authors of this blog post published an article in Fraud Intelligence (a copy can be found here) in which we stated that while the SFO's decision not to take the case to the Supreme Court was a pragmatic one it was somewhat unfortunate as the current applications of legal professional privilege do not easily lend themselves to the Deferred Prosecution Agreement (DPA) context. We stated then that it is an area that, in our view, could benefit from judicial opinion.
On Wednesday Lisa Osofsky, Director of the Serious Fraud Office (SFO), spoke at the Royal United Services Institute in London. In her speech she stated in relation to cooperation that it was not
"when a company calls in a team of lawyers and then throws the blanket of Legal Professional Privilege over all the material they have gathered".
This comment, while perhaps flippantly expressed, does raise some concerns about the SFO's views of the fundamental protection of legal professional privilege. Legal professional privilege is not a shield behind which naughty companies can hide their dirty secrets. It is a fundamental legal protection that allows clients to bare everything to their lawyers and be totally candid safe in the knowledge that they are protected in so doing. Jeopardising this protection will inevitably lead to clients being more guarded in relation to that which they are prepared to disclose to their lawyers which will lead to advice being given based on partial facts and is highly likely to impact the disclosure to the SFO under a DPA.
We have some sympathy with the SFO when it comes to legal professional privilege and the obstacle that it presents to the concept of full cooperation under DPAs. However, the SFO had the opportunity to gain clarity as to how it should be approached in the context of DPAs, but opted not to take ENRC v SFO to the Supreme Court. It appears that the SFO's solution instead is to wrap it up into the stick part of the carrot and stick approach to DPAs.
In support, in her speech this week, Ms Osofsky referenced Sir Brian Leveson's comments in the Court of Appeal judgment of ENRC v SFO in which he pointed to the waiving of privilege as being indicative of cooperation.
It is the authors' view that legal professional privilege should neither be used as stick nor carrot in the context of a DPA as, if properly applied, it should not impact significantly on the disclosure to the SFO except where it is necessary for it to do so.
However, if it is that waiver of legal professional privilege should form part of the matrix against which cooperation is assessed then it should be associated with the carrot part of the carrot and stick approach, That is, brownie points should be scored for waiving privilege in certain instances; it should not be a black mark against a company that it has availed itself of a fundamental legal protection.
In the authors' view, the Court of Appeal's comments on waiver of legal professional privilege as being the correct mechanism by which disclosure is made of otherwise privileged documents/communications, support this approach.
From the above, it is clear that the approach to legal professional privilege in the context of DPAs is an uncertain one and, without judicial opinion on the specific context, a steer from the SFO is surely needed if it wants self-reporting to increase.