In Kerman v Akhmedova, Mr Kerman, a solicitor who acted for Mr Akhmedov in the UK’s largest-ever divorce feud, objected to a court order that he be cross-examined about Mr Akhmedov's assets on the ground of legal privilege. The judge rejected his objection. Three key points were considered:
First, Mr Kerman’s involvement in certain activities were as a “man of business", not as a man of law. For example, Mr Kerman had knowledge of Mr Akhmedov's banking activities and was involved in insurance arrangements for his art collection. The activities of people of business, not law, are not protected by legal privilege.
Second, there is a 'fraud exception' to legal privilege. In this case, Mr Akhmedov's conduct in seeking to thwart enforcement of Ms Akhmedova's claim had been seriously iniquitous, meaning that this exception applied.
Third, and most importantly in this case, Mr Kerman’s communications were with a third party, not his client. Communications between a lawyer and a third party can only be protected by legal privilege if they are created for the sole or dominant purpose of litigation – but here there was no ongoing or contemplated litigation.
Mr Kerman therefore had to reveal information about his client's assets, helping Ms Akhmedova to enforce her £450m+ award.
Fraudsters' solicitors are an all too often untapped source of information in fraud and asset tracing cases. Obtaining an order against lawyers has an obvious benefit, which is that the information they provide can be relied upon as being true – unlike information which might be provided by fraudsters. It is also a helpful pressure point if the lawyers who helped structure or move assets are the same lawyers instructed in any subsequent litigation.
Other articles in this series:
- Catching fraudsters: little-known litigation tricks (Part 1) - Burner phones and the pursuit of stolen money
- Catching fraudsters: little-known litigation tricks (Part 2) - Finding fraudsters' hidden property
- Catching fraudsters: little-known litigation tricks (Part 3) - Secret Service rule: No time to hide
- Catching fraudsters: little-known litigation tricks (Part 4) - Obtaining evidence from overseas banks
- Catching fraudsters: little-known litigation tricks (Part 5) - #youvebeenserved
- Catching fraudsters: little-known litigation tricks (Part 6) Obtaining information from fraudsters lawyers
- Catching fraudsters: little-known litigation tricks (Part 7): Can you bank on a Bankers' Books Order?
- Catching fraudsters: little-known litigation tricks (Part 8) - A passport to fortune
- Catching fraudsters: little-known litigation tricks (Part 9) - Non-party search orders
Contact Darren Kenny and Oleksandra Vytiaganets for more information.
