USP Strategies plc & Anor v London General Holdings Ltd & Ors
Reference:  EWHC 373 (Ch)
Court: Chancery Division
Judge: Mr Justice Mann
Date of judgment: 1 Mar 2004
Summary: Intellectual Property- Confidence - Copyright - Disclosure - Legal Advice Privilege - Iniquity Exception - Whether a claimant can assert privilege over a summary of, or extract from, legal advice contained in the internal documents of a third party
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Instructing Solicitors: Berwin Leighton Paisner for the Defendants
The parties were rivals for the award of a contract by a third party. During the tendering process the Defendants disclosed to the third party a legal opinion they had obtained to persuade the third party of the viability of their trust proposal. The Defendants later disclosed to the third party an infringing derivative copy of the Claimants’ confidential trust agreement (“the CAA”). In the damages inquiry, the Claimants sought to prove that the Defendants had initially disclosed an infringing copy of the CAA to their lawyers in order to obtain the opinion which they had passed on to the third party. The Claimants said the advice had been sought or given for the purpose of perpetrating an iniquity.
The issue was whether the Defendants could claim privilege not only in the opinion itself, but also in references to the legal advice contained in the third party’s internal documents.
Privilege is not lost merely because the advice is disclosed to a third party or not recorded in its original form. The Defendants had disclosed the advice confidentially. Any extract from the legal advice in the hands of the third party was therefore protected from disclosure, however small. It did not matter that the effect of non-disclosure might be to conceal an earlier infringement of the CAA. The iniquity exception did not apply as the Defendants had acted in the honest, but mistaken, belief that they were lawfully entitled to make use of a derivative copy of the Claimants’ CAA.
Legal advice privilege (legal professional privilege where litigation is not pending or contemplated) remains a potent souirce of protection for privilege holders in a post-Three Rivers v BCCI environment.