When an expert report or advice is commissioned from external advisers, it is important to be aware that the report may be disclosable if its subject matter becomes relevant to litigation.
In a recent case, the buyer of a business resold it some time later, which had the effect of triggering a dispute about the sum due to the original owner under 'resale' clauses in the original agreement for the purchase and sale.
The buyer had commissioned two reports on its potential liability under the clauses. One was prepared by its bank and one by its advising accountants. The vendor of the business sought to have sight of the reports, which the buyer refused. The buyer claimed that 'litigation privilege' applied to them.
The reports had been commissioned before there was a 'reasonable prospect' of litigation and not primarily for the purpose of litigation. In addition, the 'dominant purpose' of the reports was not:
(i) enabling legal advice to be sought or given; and/or
(ii) seeking or obtaining evidence or information to be used in or in connection with such anticipated or contemplated proceedings.
In the absence of meeting these tests, the High Court concluded that the reports must be disclosed.
In general, advice from solicitors will be legally privileged and not disclosable. Advice from other advisers generally is not.
For advice on the conduct of a legal dispute, contact Sydney Mitchell on 0121 698 2200, email k.majevadia@sydneymitchell.co.uk or fill in our online enquiry form.
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