Astex Therapeutics Limited v Astrazeneca AB [2016] EWHC 2759 (Ch), 8 November 2016 

In-house and external lawyers' attendance notes of conversations with employees of a client company who are not directly involved in instructing or receiving advice from the lawyers do not attract legal advice privilege.  Where litigation is in reasonable contemplation, litigation privilege may attach to such notes – but where it is not, they are unlikely to be privileged.  The High Court also ruled that claims for privilege in disclosure statements must be set out in a reasonable level of detail.  It is not sufficient to state that documents have been withheld because they are "by their nature privileged" without providing any information about the documents.

This application by Astex is set against the background of a dispute with Astrazeneca arising from a joint research and development programme into chemical leads for the treatment of Alzheimer's Disease. 

Claiming privilege over interview notes

A key issue was whether in-house and external counsel's notes of interviews with current and former employees of Astrazeneca attracted legal advice privilege.  The answer was that they did not, unless those employees could be shown to be part of the class of persons which could be treated as "the client".

Chief Master Marsh reminded the parties that "[t]he essence of legal advice privilege is the protection of confidential communications between lawyers and their clients for the purpose of giving and receiving legal advice."  He applied the decision in Three Rivers No. 5 [2003] QB 1556, where it was held that documents prepared by employees of the Bank of England who were not in the select group involved in instructing external counsel did not attract legal advice privilege.  The principle which has been taken from that decision is that, where "the client" is a corporate entity, only communications between lawyers and those expressly or impliedly authorised to instruct them or to receive advice on behalf of that entity can attract legal advice privilege.  Employees who are not involved with counsel in this way must be treated as "third parties", and legal advice privilege does not attach to communications between them and the lawyers.

Astrazeneca had not revealed which employees were involved in the interviews of which notes had been taken.  The judge held that unless it could be shown that the interviewees were authorised to instruct and receive advice from counsel, they were not "the client" for the purposes of claiming legal advice privilege.  

Chief Master Marsh was not convinced by Astrazeneca's arguments that litigation was in reasonable contemplation at the time the employee interviews were conducted (which would have meant that the interview notes attracted litigation privilege, even if they did not attract legal advice privilege): "a party cannot simply self-certify that this part of the test is satisfied".  Unless the position is obvious, some evidence must be provided.  In this case, none had been.  Astrazeneca was therefore ordered to produce a list of documents over which privilege was claimed, including the date on which the document was created, a statement as to whether legal advice privilege, litigation privilege or both was claimed in relation to each document, and further evidence about how any claim to litigation privilege arose and when it was said to have arisen.

Describing privileged documents in disclosure statements

The application stemmed from the manner in which Astrazeneca had presented its disclosure statement.  Rather than itemising in any detail each document over which privilege was claimed, Astrazeneca simply set out broad categories of document and stated that it objected to Astex inspecting them because they were "by their nature privileged from production". 

Chief Master Marsh ruled that "although it may have been conventional at one time to state that other documents are "by their nature privileged", such a statement has no place in modern litigation, let alone litigation of very real complexity."  Instead, the party claiming privilege over a document must set out the factual basis of the grounds giving rise to the claim in sufficient detail to allow their opponent to make an assessment of whether the claim is justified.

Comment 

This decision emphasises how important it is for lawyers conducting employee interviews to consider whether or not litigation is in reasonable contemplation.  If it is not, the lawyers should be wary of the fact that the interview notes may not be privileged.  

If the prospect of litigation has appeared over the horizon, this case serves as a reminder of the importance of creating a clear paper-trail which shows when this became true. The more easily a party is able to demonstrate that litigation was reasonably in prospect from a certain point in time, the easier it will be to claim privilege over communications after that date.

The judge indicated that the court must be cautious about applications challenging privilege, and emphasised that there must be a firm evidential basis to justify an order for further evidence in response to such a challenge. However, Astrazeneca's incorrect assertion of legal advice privilege combined with its failure to provide adequate details in support of its other assertions of privilege was sufficient to merit such an order.

The main trial in Astex v Astrazeneca is listed for May 2017.