Eurasian Natural Resources Corporation Ltd v Dechert LLP

LADY JUSTICE ARDEN: This is a renewed application for permission to appeal from the order of Roth J, dated 24 October 2014. The judge gave a reserved judgment which is extensive, but the essential question with which I am concerned can be shortly stated. The claimants challenged bills of costs for professional services provided by Dechert LLP. The question with which this application is concerned is whether ENRC, the client, had by implication waived generally its legal professional privilege by bringing these proceedings against the solicitors which were for taxation of the bills.

The judge came to the conclusion that there was only a limited waiver, and he proceeded on that basis to order that the hearing should be in private. His order provides, setting aside a decision of the costs judge, that there should be a detailed assessment of the bills and that the hearing should be conducted in private.

Dechert LLP challenged the correctness of the judge's decision to order a hearing in private. The judge's survey of the authorities is extensive, but at the end of the day, when he comes to implied waiver, the judgment is short and it is principally based on his own reasons and the reasoning in one paragraph of the judgment of Lindsay J in National Westminster Bank v Bonas. The question whether or not there has been an implied waiver, and more particularly whether or not a waiver is limited, is, in my judgment, a matter of considerable importance because, for instance, the person who is involved in the proceedings and who is not the client, namely Dechert LLP, may wish to use the documents for some other purpose, and therefore there is an important point of law.

It is also important and worthy, in my judgment, of consideration by this court because the judge's conclusion that the waiver was limited was based on a line of authority which has not been considered by this court and which it may be said conflicts with other authorities in this court. So in my judgment, this is a case which is worthy for consideration of this court as a second appeal. There is an important point of principle or practice.

But I pause, because on paper Lewison LJ gave two reasons. His first was that the judge's order that the matter should be held in private was in fact not affected by this question because the essential point was that the material, if put into the public domain, would prejudice ENRC as regards a criminal investigation which I am told is ongoing. Therefore, he said in his reasons that that finding by the judge was a sufficient basis for his decision in balancing the prejudice to ENRC of potential disclosure to the SFO against prejudice to Dechert and the public interest in open justice. The judge was entitled to make the order that he did. But the appellant, for whom Mr Mark Howard QC appears, has explained to me that that was not the way the application was put to the court below; that the case was argued on the basis that unless there was a limited waiver there would have to be a hearing in public.

This matter is obviously complex and I am not for the purposes of this application going to go to it in full detail, but I have had the benefit of some submissions from the respondent. Lord Pannick QC, who appears on their behalf, makes a number of points which I would address briefly. First of all, he makes the point that there is a problem for ENRC because the appellants are relying on more documents than is necessary for the purposes of the issues in the costs assessment proceedings. As to that, the judge himself at paragraph 66 did not think that that was a reason why the proceedings should be held in private. He doubted whether that would justify a decision that the entire hearing should be dealt with in private. As Mr Howard submits, the question whether or not parts of the hearing should be held in private would essentially be a matter of case management. So, if there was a prejudicial document on which Dechert wish to rely but ENRC said was irrelevant, and the judge hearing the matter was satisfied that it would be prejudicial and that there was an argument which ought to be had as to whether the document was really necessary for the purposes of the costs assessment proceedings, he could determine that it was appropriate to go into private for that aspect of the proceedings. So the first point raised by Lord Pannick, as I see it, is not a reason why I should not give permission.

He then explains that ENRC may be forced to withdraw if it is held that there is a general waiver. That obviously is a matter for them. The question that the court has to decide is what is the correct legal decision and how the discretion for holding a hearing in private should be exercised. Clearly, the court will take into account at that stage the respondent's submissions about prejudice to it.

Lord Pannick also raised the question of the public interest. He explains that these are merely costs assessment proceedings and therefore there is no particular public interest in their being heard in public. But the law does not draw the distinction between different types of proceedings. The principle of open justice is a particularly important one in English law and a good case has to be established and certainly a sound case in law for having a hearing in private. So the question "Are these proceedings important?" is not one which would incline me to refuse permission.

I said that Lewison LJ had refused permission for two reasons. I did not refer to his second reason, because his second reason was that he was not persuaded that the judge's decision had wide implications on the conduct of professional negligence actions, as Dechert suggests. On that issue I have, for the reasons given, taken a different view, because it seems to me that potentially the question of whether or not there is an implied waiver which is limited could be of considerable importance to a solicitor. I am not saying it is going to happen in these proceedings, but the solicitor may wish to use the documents himself for some purpose, and therefore I think that the question "Is there a limited waiver?" is one which is capable of having wide implications, if not in this case then for the development of the law generally. Therefore, I am minded to give permission generally.