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Litigation privilege – a refresher from the Irish High Court

23 May 2019

Mr Justice Quinn delivered a short written judgment in an Irish Commercial Court matter on 10 May 20191. The proceedings arose from alleged deficiencies in the production and manufacture of an insulation product used in the construction of a development of residential homes. The First Defendant ('Ballytherm') issued an application challenging the claim of privilege attaching to eight internal emails from the Fourth Defendant ('Covestro').

Whilst the procedure for exchanging discovery in Ireland is different from that under the Civil Procedure Rules, the listing of documents to include those over which a claim of 'privilege' is made is relatively similar, as are the legal principles. Quinn J confirmed that the accepted test was: 

'… that the dominant purpose for the document coming into existence in the first place should have been the purpose of preparing for litigation then apprehended or threatened.'

He confirmed that the onus of 'proving that documents in respect of which privilege is claimed have come into existence for the dominant purpose of preparing for litigation rests on the party asserting it.' However, he warned that it was not enough for a bald assertion in an affidavit that this was the case. It was for the court to apply an objective test and each application would  be decided on its own facts.

The Court was provided with copies of the emails over which privilege was claimed and considered the following two issues.  

1. Was the litigation reasonably apprehended at the time of the creation of the emails?  

One of the difficulties faced by Covestro was that it had only applied an internal litigation hold (preservation order) four months after the creation of the emails. However, given that Covestro had received correspondence threatening litigation and had notified its insurers prior to the emails, the Court accepted that the emails were sent after a date on which litigation was apprehended.

2. What was the dominant purpose?

The Court noted that 'no evidence of any Covestro employee detailing the dominant purpose of the relevant emails has been put before the Court.'  Covestro asserted that the emails were created shortly after receipt of a letter of claim but the Court stated that 'Close proximity of itself is not sufficient to satisfy either limb of the test.'  The Court concluded that the emails were created in the context of Insurers considering cover, not for the dominant purpose of preparing for litigation.

The Court concluded that Covestro had failed to prove the required dominant purpose and the claim of privilege failed. 

However, as an aside, the Court considered a submission arising from the fact that Covestro had claimed privilege over only some emails in a chain of communication.  It was suggested that Covestro had 'effectively waived privilege over this entire exchange of communications' or 'it would be unjust were Covestro to be permitted to select particular emails'.  The Court opined that there was force in this argument although, because of their finding above it was not required to decide the point.

The takeaway points?

  • For corporates - as soon as a letter of claim is received, ensure that all internal correspondence is clearly marked 'in contemplation of litigation' and ensure that employees are alive to the issue.
  • For solicitors preparing discovery - review email conversations in total and consider if sections should be redacted or if there is a strong argument that privilege attaches to the entire conversation.

1 Kelland Homes Limited and Ballytherm Limited and Clondalkin Builders Providers Limited and James McMahon (Dublin) Limited and Covestro BV [2019] IEHC 305

Further Reading

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