High Court reminder that privilege can be lost due to iniquity

Privilege is a protection from having to hand over relevant documents which the law permits as an exception. It can be withdrawn where an attempt is made to abuse it for wrongful purposes.

22 August 2014

Privilege is a protection from having to hand over relevant documents which the law permits as an exception. That exception however can be withdrawn in cases where an attempt is made to abuse the protection for wrongful purposes.  In JSC BTA Bank v Mukhtar Ablyazov and others [2014] EWHC 2788, the High Court ruled on the rarely cited, but well-established legal principle that privilege in documents can be lost due to iniquity.

Communications which would otherwise be privileged are not confidential and therefore not privileged, if they are created with iniquitous intentions (criminal, fraudulent or dishonest). Hence, as in this case, communications with 'unwitting' lawyers which are intended to further an iniquitous purpose are not privileged and public policy requires that such relevant documents are disclosable in proceedings.

Whilst iniquity is a question of fact, Mr Justice Popplewell used three points to explain why iniquity negates privilege: first, legal advice privilege attaches only to communications between solicitor and client which are confidential; secondly, communications made in furtherance of an iniquitous purpose negate such confidentiality; and thirdly, an absence or abuse of the normal relationship between solicitor and client in the ordinary course of business means that confidence cannot exist and no privilege attaches.

Defences such as human rights arguments or privilege against self-incrimination did not apply. For example, the right to privacy under art.8 only attaches where the communications are confidential, which is negated by iniquity as an abuse of the solicitor and client relationship. The right to a fair trial under art.6 cannot be invoked as the concealment of such iniquitous material would in itself not allow a fair trial.

Whilst the principle rarely comes up in practice, it is clear from this case that the Courts will be strict where a strong prima facie case of iniquity has been established. Even where the disclosure process will be lengthy, costly and involve 'looking for a needle in a haystack', if there is 'potentially a very valuable needle' to be found, a Court may well order disclosure in iniquitous circumstances (as was in the case in JSC).

The author, Richard Binns is a commercial litigator in Burges Salmon's Dispute Resolution team led by David Hall.

Key contact

David Hall

David Hall Partner

  • Dispute Resolution
  • Banking Disputes
  • Business Crime and Regulatory Investigations

Subscribe to news and insight

Burges Salmon careers

We work hard to make sure Burges Salmon is a great place to work.
Find out more