In international offshoot of United States' massive lawsuit in American court against tobacco companies, English Court of Appeals (Civil Division) dismisses appeal from lower court's honoring of plaintiff's Letter of Request for testimony from former attorney for British tobacco company so that issues of privilege could be decided on question-by-question basis
The plaintiff in this case is the government of the United States. Since 1999, it has been carrying on civil RICO litigation in the U.S. against a number of tobacco companies. The action is one of the most complex in American history. Discovery may involve upwards of 40 million documents and damages are claimed to be U.S.$ 289 billion. The plaintiff was claiming that, since 1953, those companies had taken part in an illegal campaign to deceive and defraud the American public about the health risks linked to smoking and about their knowledge and attitude towards them.
Among the defendants to that lawsuit are two companies in the British American Tobacco group. British American Tobacco (Investments) Ltd. (BAT), which became a corporation in 1997, owned both companies. Mr. Andrew Foyle was a partner in the firm of solicitors who acted for the BAT group, representing them from about 1985 to May 1994.
The plaintiff applied, inter alia, for an order to have Mr. Foyle deposed for the purposes of making his evidence available for use in the trial of proceedings now pending in the U.S. District Court for the District of Columbia which had issued a Letter of Request. The defendants opposed the application.
One of plaintiff's allegations was that defendants or others had intentionally destroyed many relevant documents or had taken them out of U.S. jurisdiction. The plaintiff specifically wished to question Mr. Foyle as to the defendants' document management policies and procedures. Mr. Foyle admitted that he could give relevant and admissible evidence, but opposed the order applied for on the grounds of legal professional privilege and oppression. The chief constraints on the judge in a matter such as this is the Evidence (Proceedings in other Jurisdictions) Act 1975.
The plaintiff conceded that Mr. Foyle might well be entitled to refuse to answer many questions put to him, but contended that the proper course would be to make objections or invoke privilege as to specific questions asked. The Commercial Court judge ruled for the plaintiff, ordering the deposition to be carried out by English counsel before a judge of that Court. The defendants and Mr. Foyle appealed.
The appellants argued that privilege covered all communications passing between Mr. Foyle and the BAT group companies. The Commercial Court could not, therefore, require Mr. Foyle to answer questions on any of the matters identified in the letter of request, unless BAT waived all its privileges. As BAT had no intention of doing so, defendants said it would waste time and money to make an order for Mr. Foyle's examination. The English Court of Appeal (Civil Division), however, unanimously agrees to dismiss the appeal.
The Court of Appeal first found it clear that the judge below was not mistaken in his application of the "litigation privilege." In general, this protection extends to confidential communications which must have been made for the dominant purpose of conducting or giving advice in relation to litigation, either pending or in contemplation. The trial judge did not err in applying this notoriously slippery doctrine. Thus, he had correctly considered that a "mere possibility" of litigation would not suffice to establish litigation privilege. He also properly decided that the fact that there was a distinct possibility that sooner or later someone might make a claim was not enough nor was a general fear of future litigation.
"In any event, I consider that it would be impossible to conclude that litigation against BATCo itself was reasonably in prospect when that company engaged Mr Foyle's services to advise it. The last time anyone had sued that company had been as long ago as 1969, and there had been no letters before action or other precursors of contentious litigation when Mr Foyle was advising it between 1986 and 1994. In his third witness statement, the most that Mr Gilbey [BATCo's current senior litigation counsel] could say was that "it would be reasonable for BATCo to have anticipated that it might be made a defendant to litigation in the United States or elsewhere'."
"This tentative assessment accords well with the contemporary view, expressed in a minute dated 26th February 1986, to the effect that litigation experts in the UK had been briefed concerning "possible' liability litigation against BATCo. Similarly, on 21st May 1986 there was a statement by a senior BATCo executive that he did not wish it to be seen that the company had only instituted a destruction policy when the possibility of their being involved in litigation became real." [¶ 69]
On the legal advice privilege, the Court quotes Balabel v. Air India [1988] 2 All E.R. 246 as the leading modern English authority. "Although originally confined to advice regarding litigation, the privilege was extended to non litigious business. Nevertheless, despite that extension, the purpose and scope of the privilege is still to enable legal advice to be sought and given in confidence. In my judgment, therefore, the test is whether the communication or other document was made confidentially for the purposes of legal advice. ..."
"Where information is passed by the solicitor or client to the other as part of the continuum aimed at keeping both informed so that advice may be sought and given as required, privilege will attach. ...Moreover legal advice is not confined to telling the client the law; it must include advice as to what should prudently and sensible [sic] be done in the relevant legal context." [¶ 75]
Appellants charged the lower court with "watering down" the legal-advice privilege as set forth in Balabel. The appellate court, however, is not convinced. "[The judge] was simply concerned to deny blanket approval to a claim for privilege in relation to all communications passing between Mr Foyle and anyone in the BATCo organisation (or outside it) over a nine year period, and in my judgment he was right to do so."
"The judgment in Balabel pegs out the ground rules, and the procedure the judge selected will give him the chance of expressing a view on the proposed lines of questioning at the forthcoming directions hearing, and will then leave it to the examining judge to exercise further control over individual questions. It will also provide an opportunity to identify more precisely the person or people who should be treated as Mr Foyle's clients to whom he was furnishing legal advice on their rights, liabilities and obligations." [¶ 81]
The appellate court also stresses that the issue presented on the legal advice privilege is not an all-or-nothing proposition.
"There are likely to be areas which are quite plainly covered by legal advice privilege. There will be other areas which quite plainly are not. In the debatable areas the judge, at the restored directions hearing, and the judge examiner will both have to proceed with care. But this is no good reason why the whole enterprise should be called off now."
"It must be remembered that it is the duty and pleasure of the English court to respond positively to a letter of request if it can. It is also in the public interest that a court (on either side of the Atlantic) should have all relevant material available to it when it decides a case, let alone a case as important as this one, unless it is clear even at this early stage that the overwhelming majority of relevant questions will be successfully resisted on the grounds of legal advice privilege. This, in my judgment, cannot be said in this case." [¶ 88]
Citation: United States v. Philip Morris, Inc., [2004] E.W.C.A. CIV. 330, [2004] All E.R. (D) 448 (Mar.), (Approved judgment)(March 23); “BAT under pressure on memorandum” by Neil Buckley, The Financial Times (London), April 27, 2004, page 27.
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