Litigation Privilege: Loreley Financing v Credit Suisse

Litigation privilege: Loreley Financing v Credit Suisse

When it comes to legal professional privilege, the parameters of exactly what is in scope can often be unclear including, until recently, whether or not the identity of persons authorised to liaise with solicitors, and to provide those solicitors with instructions, must be disclosed. In the case of Loreley Financing (Jersey) No 30 Ltd v Credit Suisse Securities (Europe) Ltd & Others [2022] EWCA Civ 1484, clarification was given by the Court of Appeal as to the following question: "Is the identity of the persons who are authorised to give instructions to solicitors on behalf of a corporate client in ongoing litigation a matter which is covered by litigation privilege?".

The recent Court of Appeal ruling

With the substantive claim in Loreley Financing v Credit Suisse still due to be heard in 2023, Loreley (the Claimant) alleges fraudulent misrepresentation and unlawful means conspiracy in relation to its purchase of notes at a cost of US $100m from Credit Suisse (the Defendant) as part of a collateralised debt obligation transaction. In its defence, Credit Suisse alleges that Loreley knew, or could with reasonable diligence have known, of relevant facts and matters necessary to plead its claim at an early enough point in time for the claim to now be barred by limitation.

Credit Suisse relies upon the fact that Loreley is a special purpose vehicle with no employees and whose directors are supplied by a professional services company, where the knowledge of two German banks — one whom Loreley relied upon for its book-keeping and the other with security over Loreley’s assets as its main creditor, including this claim — should be attributed to Loreley.

However, following Loreley’s refusal to answer a Part 18 Request for Further Information made by Credit Suisse, asking if the second German bank were providing instructions to Loreley's lawyers in relation to the litigation — to help assist in understanding when the Claimant became aware of the alleged misconduct — the matter came before the High Court. Loreley had refused the request on the basis that this information was privileged. Finding in favour of the Defendant, Loreley appealed the decision of Mr Justice Robin Knowles that the identity of anyone authorised to give instructions to their legal team on their behalf in the context of these proceedings was not subject to privilege.

In the absence of any authority addressing the precise issue in this case, the Court of Appeal unanimously held that there is no general rule that the identity of those authorised to give instructions to solicitors on behalf of a corporate client are protected by litigation privilege. Still, on the facts of the case, disclosure was not “reasonably necessary and proportionate”, either to enable Credit Suisse to prepare its’ own case or to understand Loreley's case against it. This is because, based on the considerable information already in the Defendant’s possession about, amongst other things, the roles played by either German bank during the relevant period, there was no evidence or even suggestion that the Defendant was in any difficulty in preparing its case for trial.

The implications for corporate clients

As with any judicial precedent, there is almost always more to the headline outcome. Generally speaking, the identity of the person or people giving instructions on behalf of a corporate entity will not be privileged. However, in delivering the lead judgment, Lord Justice Males acknowledged the possibility of an “unusual case” where identifying those giving instructions might reveal something about either the content of the communication or the litigation strategy. Equally, even if a person’s identity is not privileged, the party seeking disclosure will still need to persuade the court that any request for the information under Part 18 of the Civil Procedure Rules was neither unnecessary nor disproportionate, where LJ Males said they these types of requests are not to be encouraged.

Legal disclaimer

The matters contained within this article are intended to be for general information purposes only. This blog does not constitute legal advice, nor is it a complete or authoritative statement of the law in England and Wales and should not be treated as such.

Whilst every effort is made to ensure that the information is correct, no warranty, either express or implied, is given as to its’ accuracy, and no liability is accepted for any errors or omissions.

Before acting on any of the information contained herein, expert advice should always be sought.

©Melissa Worth, January 2023