A row over the erosion of legal professional privilege in financial crime investigations has escalated following two decisions involving the Serious Fraud Office (SFO).
In a ruling described as ‘alarming’ by the Law Society, the High Court last week backed the SFO’s bid to obtain internal documents held by mining company Eurasian Natural Resources Corporation (ENRC). The SFO is investigating the London-headquartered multinational in relation to alleged fraud, bribery and corruption in Kazakhstan and a country in Africa. The company denies wrongdoing.
The judgment came days after Chancery Lane condemned the SFO for ‘limiting solicitors’ roles’ in investigatory interviews and placing
inappropriate restrictions on their work.
In the ENRC case, the company had claimed the internal documents sought by the SFO had been prepared in connection with the investigation and were covered by professional privilege. However, the court said privilege applies only if ENRC ‘anticipated’ actual criminal prosecution and should protect only those documents prepared with the sole or dominant purpose of conducting litigation.
Society president Robert Bourns hit out at the decision, describing professional privilege as a fundamental part of the relationship that solicitors have with their clients – ensuring they can seek legal advice in confidence. ‘Anything that undermines or inappropriately limits legal professional privilege threatens not just that particular person or case, but the functioning of our whole justice system, which depends on every person having the right to seek legal advice confidentially,’ Bourns said.
The Law Society also strongly criticised SFO restrictions on the role of lawyers representing witnesses interviewed under section 2 of the Criminal Justice Act 1987. Under the act, any person believed to have relevant information can be compelled ‘to answer questions or furnish information’.
But under SFO guidance issued last year, lawyers will be permitted to attend the interviews only if an SFO case controller believes that they will assist the purpose of the interview and/or investigation, or provide essential assistance to the interviewee by way of legal advice or pastoral support.
The Society described this policy as unfair. Bourns said: ‘Witnesses in section 2 interviews are entitled to receive proper legal advice. This allows witnesses to understand their position and determine how best to respond.’
Jonathan Pickworth, partner at global law firm White & Case, said the SFO’s guidance implies a ‘deep distrust’ of defence lawyers and imposes ‘onerous restrictions on interviewees who may have to grapple with questions that a lawyer may need time to consider’.
The SFO declined to comment. ENRC said it would appeal the High Court ruling.
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