ENRC – rescued on appeal, but is the “dominant purpose” test fair?


“It has not, I think, been sufficiently stressed that gratitude does not exist. …In the space where ‘gratitude’ is routinely described as existing there is instead a compound of duty, guilt and most especially resentment; no action anywhere in the history of the world has ever been undertaken out of gratitude.”


So opined John Lanchester’s Partridgesque anti-hero Tarquin Winot in The Debt to Pleasure. I often think of this wonderfully bleak aperçu when questions of motive arise. We’re so frequently wrong about why people do things. The purposes behind our actions are opaque, even – perhaps especially – to ourselves.

And how do joint purposes work? Do they even truly operate together?

On 5th September the Court of Appeal (Leveson LJ, Sir Geoffrey Vos C, McCombe LJ) handed down judgment in SFO v ENRC [2018] EWCA Civ 2006, putting right a bad first instance decision on Litigation Privilege. They also threw in some pleasingly punchy obiter criticising the approach to Legal Advice Privilege taken in the infamous case of Three Rivers (No. 5).

First, a brief summary and analysis of the judgment. If you’ve already read the case you might want to scroll down to Part 2 where I discuss the required ‘likelihood’ of anticipated proceedings, and suggest an improvement to the ‘dominant purpose’ test.



The facts

ENRC, an international mining company, was alerted to corrupt practices within their organisation. They launched an investigation and instructed external lawyers and forensic accountants to assist. Employees were interviewed. Dialogue with the SFO took place, which dragged on unsatisfactorily until the SFO announced a criminal investigation and served s.2 notices. ENRC asserted Privilege over various classes of documents – in particular the lawyers’ notes of interviews with employees, and the forensic accountants’ work – a claim which the SFO successfully challenged in the High Court.


The High Court proceedings

ENRC argued that Litigation Privilege protected both the forensic accountants’ work and the lawyers’ notes of interviews with employees, and that the latter were also protected by Legal Advice Privilege.

Mrs Justice Andrews found against them on all of that. Litigation Privilege did not apply, she held, because

  1. criminal proceedings were not, during either of the two relevant periods, a real likelihood as opposed to a mere possibility; and, if she was wrong about that,
  2. the dominant purpose of both the employee interviews and the forensic accountants’ work was fact-finding in order to prepare for a possible SFO investigation, rather than in order to take legal advice in relation to the conduct of the anticipated criminal proceedings. (She even went so far as to say that she was not persuaded that that was “even a subsidiary purpose”).

The two relevant periods, capable of separate treatment, were as follows:



As to ENRC’s alternative claim of Legal Advice Privilege in respect of the lawyers’ notes of interviews, Three Rivers (No. 5) held that only those employees specifically tasked to seek and obtain legal advice could have their communications with lawyers protected by Privilege. The employees who had been interviewed by lawyers in the course of the internal investigation did not fall into that category, therefore that claim would also fail.


In the Court of Appeal

The Court held that a criminal prosecution was in reasonable contemplation, so all the documents were protected by Litigation privilege.

Their ruling on this point begins at Paragraph 91:

The judge was wrong to conclude that a criminal prosecution was not reasonably in prospect once the SFO had written its letter of August 2011”. (i.e. the second period)

And ends at paragraph 101:

It seems to us that ENRC was right to say that [criminal legal proceedings] were in reasonable contemplation when it initiated its investigation in April 2011, and certainly by the time it received the SFO’s August 2011 letter.” (i.e. both the first and second period)

In paragraph 92, the Court listed a number of factual points in support of their decision, which include the following.

  • ENRC had received a whistleblowing email about corruption
  • They appointed lawyers to investigate
  • Before launching the internal investigation ENRC’s general counsel had communicated to the Board that he had heard on the grapevine that ENRC was firmly on the SFO’s radar
  • Around the time of the launch of the internal investigation the Head of Compliance predicted a dawn raid in the coming months
  • The Self-Reporting Guidelines, to which the SFO referred ENRC, expressly stated that there could never be an unconditional guarantee that there will not be a prosecution
  • The SFO told ENRC, at their first meeting in October 2011, that they could give no assurance they would not prosecute.

These points variously relate to both Period 1 and Period 2; and the perceived and actual likelihood of a criminal prosecution presumably increased as time went on. But it is important to note that Litigation Privilege was held to apply even at the early stage of the launch of the internal investigation.

It’s also worth noting one other specific finding of the judge at first instance, and the Court of Appeal’s response to it. She wrote that

documents created with the specific purpose or intention of showing them to the potential adversary in litigation are not subject to litigation privilege” (para 55 (170))

The Court of Appeal countermanded this, as you might expect:

“The fact that solicitors prepare a document with the ultimate intention of showing that document to the opposing party does not, in our judgment, automatically deprive the preparatory legal work that they have undertaken of litigation privilege. We can imagine many circumstances where solicitors may spend much time fine-tuning a response to a claim in order to give their client the best chance of reaching an early settlement. The discussions surrounding the drafting of such a letter would be as much covered by litigation privilege as any other work done in preparing to defend the claim” (para 102)


As to Legal Advice privilege and the Three Rivers (No. 5) problem, the Court of Appeal didn’t have to decide the point but agreed with Andrews J that Three Rivers (No. 5) must be followed (para 133). They also said, however

“If, therefore, it had been open to us to depart from Three Rivers (No. 5), we would have been in favour of doing so. For the reasons we have given, however, we do not think that it is open to us, so it is a matter that will have to be considered again by the Supreme Court in this or an appropriate future case.” (para 130)


Part 2


So. It was a decision on Litigation Privilege, on the particular facts of the case. But the particular facts are a common set of facts, so if a principle can be drawn from the judgment I suggest it might be something along these lines:


If you reasonably believe significant corrupt activity has taken place, and reasonably believe the SFO are onto you, and reasonably believe that a criminal prosecution is a serious possibility, the fruits of your internal investigation are likely to be protected by Litigation Privilege – even if your investigation will also inform important decisions about regulatory and compliance matters.


Which strikes me as being roughly how we’d want the law to stand, from a public interest point of view.

Now, you may not agree with my formulation of course, and you’ll note two things:

  • The threshold for the likelihood of adversarial proceedings is not stated anywhere in the authorities as “a serious possibility”; and
  • My formulation is unspecific about “dominant purpose”.

But I think the various ways in which the likelihood threshold is put in the case law – even within this one case indeed – are a little confusing. And the “dominant purpose” test cannot be consistently and fairly applied as it is. And so both limbs will often be fudged by the courts – so as to fit something like the principle I’ve proposed.


How likely must criminal proceedings be? 

Andrews J adopted the formulation in USA v Philip Morris Inc [2003] EWHC 3028 (Comm): “real likelihood rather than a mere possibility”. But in the next sentence and several times thereafter uses “reasonably in contemplation”.

The Court of Appeal started with “reasonably in prospect” (para 91) then quoted “real likelihood rather than a mere possibility” (para 92).


At paragraph 98 they say,

“Whilst a party anticipating possible prosecution will often need to make further investigations before it can say with certainty that proceedings are likely, that uncertainty, in our judgment, does not in itself prevent proceedings being in reasonable contemplation….The fact that there is uncertainty does not mean that, in colloquial terms, the writing may not be clearly written on the wall. We think the judge was wrong to regard the uncertainty as pointing against a real likelihood of a prosecution.”

The Philip Morris formula, “real likelihood rather than a mere possibility”, is perhaps most naturally understood as requiring at least a 50% chance. But the meaning of “likely” depends on context: ‘he’s likely to win this game’ surely means greater than 50%; but ‘a third likely outcome’ must mean ‘substantial but less than 50%’.

Paragraph 98 seems to first undermine the suggestion that a greater than 50% outcome is required – by deprecating any need to “say with certainty that proceedings are likely” – but then bolster it with reference to “the writing [being] clearly written on the wall”. Question: if the writing is clearly written on the wall, how could you not be able to say with certainty that proceedings are likely?

(For what it’s worth, the original Writing on the Wall, as Bertie Wooster would no doubt recall, was far from clear: no one could understand a word of it until Daniel applied his own heavily coded interpretation predicting Belshazzar’s downfall.)


But are we to take from paragraph 98, or anywhere else, that a 50% probability is required? I suggest not.

Given the potentially catastrophic consequences of a criminal prosecution, the courts should – and often will – be content to allow Litigation Privilege to apply where criminal proceedings are reasonably believed to have a non-trivial chance of occurring – provided, of course, that the dominant purpose of the relevant communication was in connection with that chance.

And what possible justification could there be for the law being otherwise? If it’s in the public interest that a person should be able to take a statement from an expert or eye-witness in order to defend criminal proceedings that he accurately judges to have a 51% chance of occurring, without fear that the report or statement might be seized and used by the prosecution, why should he not be able to do so when the probability of prosecution is only 49%? Or even 10%?

In reality of course – at least in the case of a non-corporate defendant – no one would dream of challenging Litigation Privilege on the basis of a low probability of prosecution. A woman tells the tabloids about a Premiership footballer grabbing her breasts in a nightclub several years previously. The police contact her and she gives an account over the phone, but no written statement. The footballer gets wind of this. What’s the probability of prosecution at this stage? 5%? 10%? Considerably less than 50% in any event. The footballer gets his solicitor to take statements from others in his group on the relevant night. The police approach the same people, who say that they’ve already given a statement to the solicitor and won’t be making a police statement. Would the police be likely to successfully challenge Privilege in relation to the statements given? No.

Or after a drunken employee suffers a workplace injury of medium severity and Health & Safety officers pay a visit, the anxious factory owner commissions a report into the safety of the machinery in order to be better prepared for a potential interview under caution. What’s the probability of prosecution at that stage? 20%? Could the Crown sensibly demand the report in the event of a trial? No.


Dominant Purpose

Consider the following scenario. As part of an internal investigation I, the CEO, have lined up a forensic accountant to interview staff and take statements. But today most of the finance department are away at a conference. Only Magnus, a junior employee, is in the office. Should I tell the forensic accountant to start tomorrow instead? Well, Magnus isn’t senior enough to be able to help much with the potential trial issues – I might or might not have got round to having him interviewed if the office had been full of people. Then again, what’s to lose? I decide to have him interviewed today. A simple bar chart of the situation might look like this:

My strength of purpose isn’t particularly high – 2/10 let’s say – but there’s only one reason I’m doing it, and that’s to improve my chances of successfully defending the trial. Litigation Privilege applies.

Now, what if I don’t really trust Magnus, and I know he’s a bit incompetent, and I’d quite like to have a forensic accountant’s interview with him in case I want to embarrass and upset him in the future. The chart might now look like this:

Privilege still applies.

But what if my dark intentions to use the report to upset Magnus in some way are rather stronger:

And with the trial no longer being the dominant purpose Litigation Privilege is lost! How can this be justified? It’s still an operating purpose isn’t it?

Well, one answer, or the beginnings of one, might be to say that separate purposes don’t operate in series, as it were, but in parallel:

If something dropped down Tetris-style onto those two purposes, ‘to upset Magnus’ would block its descent, not ‘to use in the trial’. On this view of multiple purposes ‘to use in the trial’ isn’t doing any work at all. It might as well not be there.

I don’t know what neuroscience or experimental psychology would have to say about it, but intuitively I feel that this ‘in parallel’ model is nearer the truth for most human affairs (albeit that some highly rational multi-purpose decisions – e.g making a particular chess move – might work more along ‘in series’ lines).

But even if this is right, why should minority purposes be disallowed? Consider again the first scenario, this time with purposes in series: weak purpose for the trial, and dark intentions towards Magnus even weaker:

Privilege applies.


Now suppose his evidence is hugely important for the trial, and also he’s been trying to start a workplace affair with my wife and I’m desperate to use the report to ruin his career (other than in connection with the trial):

Now privilege is lost. Even though the document’s importance to the trial is much higher than it was in the previous scenario, the entirely contingent fact of my extreme enmity towards Magnus means I have to disclose it.

Even if you can stomach that state of affairs, what happens when the anticipated trial is (by a whisker) the greatest purpose of several:


The trial is the strongest purpose here – and would be the purpose that blocked the Tetris piece – but it’s only about 25% of the total purpose. If it was a boxer, the green block could be said to be “dominant” among the top fighters in the lightweight division, but would the courts regard it as a “dominant purpose” when considering Privilege?

Lord Edmund Davies’ remarks in Waugh v British Railways Board [1980] A.C. 521 – the case in which “dominant purpose” was selected from a host of other thresholds given in previous authorities – would suggest not:

“Adopting that approach, I would certainly deny a claim to privilege when litigation was merely one of several purposes of equal or similar importance intended to be served by the material sought to be withheld from disclosure, and a fortiori where it was merely a minor purpose.” [my emphasis]

So it’s not just that the trial purpose has to be the operating purpose, it does indeed have to be more than 50% of the sum of all purposes.


Waugh was a hard case. A railway employee’s widow issued a claim under the Fatal Accidents Acts after her husband was killed in a locomotive collision. It was the Board’s practice (not a statutory requirement) to prepare a report after any collision, for future safety purposes. The plaintiff widow sought disclosure of the report. The Board asserted Litigation Privilege on the basis that use in the upcoming litigation was “one of the [two] principle purposes” of the report. And indeed, it was accepted by the court that the litigation purpose might have been as high as – but no higher than – equal to the safety purpose.

In respect of the Board’s position on the relative strength of the litigation purpose Lord Edmund-Davies said:

Such moderation is only to be expected in the face of a claim arising out of a fatal accident. Indeed, the claims of humanity must surely make the dominant purpose of any report upon an accident (particularly where personal injuries have been sustained) that of discovering what happened and why it happened, so that measures to prevent its recurrence could be discussed and, if possible, devised.” (at 544)

That’s as may be, but it’s easy to conceive of small changes to the facts that would push the litigation purpose above 50% – yet still leave us with a clear sense that the report ought not to be protected by Litigation Privilege: e.g. if the Board was instead a private company, or there were severe criminal penalties threatening the directors.

I suggest we need something to replace the dominant purpose test.


If that strikes you as a bold submission, consider the following remarks of Neuberger MR, as he then was, in Sugar v BBC [2010] EWCA Civ 715, where ‘dominant purpose’ was considered in a context other than Privilege:

“On the other hand, deciding which purpose is the dominant purpose would seem to me to involve a rather subjective, and often speculative, exercise. Further, such an exercise could involve other difficulties: if the information is held for three or more (say, four) purposes, would it be enough for the BBC to show that journalism was more dominant than each of the other three taken on their own, or than all the other three taken together?” (para 41)

Well quite. The very fact that Andrews J didn’t think litigation was even a subsidiary purpose of ENRC’s investigations (!) yet the Court of Appeal thought it was more than 50% of all the total purposes does rather suggest that determining purpose dominance is indeed a “speculative exercise”.


What we need is a test that would:

  1. allow Privilege to apply to the ENRC documents; (as per the current state of the law)
  2. allow Privilege to apply when Magnus’s evidence is very important but we want to upset him even more; (contrary to the current state of the law), and
  3. prevent Privilege from applying where a collision report would have been produced anyway, but all we really care about are the criminal proceedings (contrary to the current state of the law)

What I tentatively suggest is as follows.

Litigation Privilege should apply whenever there is a litigation purpose, regardless of any other purposes, unless the document would have been produced in any event for reasons unconnected with the possibility of adversarial proceedings and it could reasonably have been expected that the document would have been so produced. 

This – I hope fairly obviously – fits (b) and (c) above. It’s less immediately obvious that it fits (a), but if we accept, as I suggest we should, that if there were no possibility of adversarial proceedings (e.g. because bribery wasn’t an offence) then ENRC would not have bothered with an investigation, then we are in the clear.

No doubt there will at the very least be counterexamples that would require this proposed definition to be altered, but I think that some element of “reasonable expectation” in relation to counterfactual reasons for a document’s existence is required to meet our intuitions about what justice demands in these sorts of circumstances.


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