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Unpicking legal professional privilege: The operation of the Iniquity Exception - Al Sadeq v Dechert & Others

Posted on 14 February 2024

The Court of Appeal has recently handed down a landmark decision in Al Sadeq v Dechert & Ors [2024] EWCA Civ 28, clarifying the principles relating to the scope of legal professional privilege.

Legal professional privilege is an important aspect of English law which enables parties to obtain legal advice without fear of that advice being disclosed to their opponent in legal proceedings. It operates under two broad headings, namely (1) legal advice privilege, which covers communications between a lawyer and client that are made for the sole or dominant purpose of giving or receiving legal advice, and (2) litigation privilege, which covers communications between lawyers or their clients and any third party for the purpose of obtaining advice or information in connection with existing or reasonably contemplated litigation.

However, there is an exception to the protection of privilege which prevents a party from asserting privilege in relation to documents brought into existence for the purpose of furthering a crime or fraud. This is known as the iniquity exception.


The appeal arose out of an ongoing dispute between Mr Al Sadeq, a Jordanian citizen and lawyer, and the law firm Dechert LLP.

Mr Al Sadeq held senior positions in the sovereign wealth fund of the Emirate of Ras Al Khaimah ("RAK"), the Ras Al Khaimah Investment Authority ("RAKIA"), but left the employment of RAKIA in late 2012 and moved to Dubai. In 2014, Mr Al Sadeq was arrested at his home and taken to RAK. He was then tried and convicted on charges of fraud. Mr Al Sadeq remains in prison in RAK, and maintains his innocence.

Dechert was engaged by the Investment and Development Office of the government of RAK ("RAK IDO") in connection with an investigation into the alleged frauds. Mr Al Sadeq contended that during its investigations, Dechert and three of its former partners (who were also parties to the appeal), committed serious wrongs against him. He therefore commenced proceedings against them in the English courts.

Dechert gave disclosure in the underlying proceedings, and withheld certain documents on the basis of legal professional privilege. Mr Al Sadeq challenged Dechert's claims to privilege. At first instance the High Court dismissed his arguments (see our article on the first instance decision here). However, Mr Al Sadeq appealed to the Court of Appeal on three grounds namely the iniquity principle, litigation privilege, and legal advice privilege. Popplewell LJ (with Males and Underhill LLJ concurring) granted Mr Al Sadeq's appeal in respect of the iniquity exception, but dismissed the other two grounds of appeal.

The Iniquity Exception
1. Evidential Threshold

Popplewell LJ held that the evidential threshold for the exception to apply is a "prima facie case" of iniquity, and that the question of whether the iniquity took place must be satisfied on a balance of probabilities. The decision-maker (either the party or its legal representative conducting disclosure, or the court on an application) must determine whether, on the material available, the existence of iniquity is more likely than not.

The Court of Appeal justified this high threshold in the following terms: "Since privilege, where it exists, is inviolable, and its loss irremediable, and as it has been described as a fundamental human right, [anything less than a 50% chance of success] cannot be a satisfactory test."

The Court of Appeal added, however, that in some exceptional cases a "balance of harm" analysis may also be appropriate. Such an exercise would require the decision-maker to balance (a) the harm to the disclosing party if the disclosure is wrongly given or ordered with (b) the harm to the opponent if the disclosure is wrongly refused. The Court of Appeal left details of this analysis open, but noted that it is unlikely to apply to a decision taken by a party or its lawyer when conducting disclosure.  

Applying the clearly defined threshold, the Court of Appeal found that on the evidence in front of it, a prima facie case of iniquity had been made out on three grounds, namely Mr Al Sadeq's unlawful rendition and detention, the conditions in which he was held, and his lack of access to legal representation.

2. Legal test

The second question for the Court of Appeal was to determine the legal test that must be satisfied for the iniquity exception to apply. Tying in the evidential threshold, the Court of Appeal re-formulated the exception to "where there is a prima facie case of iniquity which engages the exception, there is no privilege in documents and communications brought into existence as part of or in furtherance of the iniquity". A document is "part of" an iniquity in circumstances where it "reports on or reveals" the iniquity, or where it was brought into existence in preparation for the iniquity.  However, the Court emphasised that the test arises out an "abuse of the lawyer/client relationship", and so it may be necessary to distinguish, on a document-by-document basis, whether the exception applies in the first place.

Applying this test, the Court of Appeal held that while it was not possible to infer from the material presented whether any documents had been wrongly withheld from disclosure by the misapplication of the iniquity exception, Dechert's disclosure exercise in the underlying proceedings would have to be re-done as its original approach had been "too narrow".  


Litigation Privilege

Dechert contended that, even though its client were not, and were not contemplated as being, parties to the criminal proceedings in RAK, litigation privilege nevertheless applied to documents created for the "dominant purpose" of assisting in those proceedings. The Court of Appeal was therefore asked to determine whether litigation privilege can be extended to non-parties in legal proceedings. In this respect, the Court of Appeal found that there was no basis to limit the scope of litigation to that to which the person is a party, as it would create a number of unjust anomalies (see para 195 for a list of examples). As a result, and while "extremely rare", litigation privilege is available to a non-party in circumstances where the dominant purpose test is satisfied. The Court of Appeal left open the question of whether there is also a requirement that a non-party has "sufficient interest" in the contemplated proceedings, since it was plainly satisfied here given that RAKIA was the victim of the alleged fraud.

Finally, the Court of Appeal considered whether the much-criticised principle in Three Rivers (No 5), namely that legal advice privilege only extends to communications between lawyers and individuals within a company who are authorised to seek or receive legal advice, extends to litigation privilege. In reaching its decision, the Court of Appeal stressed that litigation privilege extends to communications with third parties, and all legal and natural persons come within the scope of that description. As such, the rationale behind the Three Rivers (No 5) has no application to litigation privilege, since legal advice privilege does not extend to communications with third parties. Dechert reserved its position to appeal on the basis that the principles set out in Three Rivers (No. 5) should not be applied to legal advice privilege either. If such an appeal is made, it is likely to be eagerly anticipated.

Legal Advice Privilege

While Dechert had been retained for its legal expertise, it also conducted work in relation to the ongoing investigation into the alleged fraud. Mr Al Sadeq argued that communications created for the dominant purpose of Dechert's investigatory work could not be withheld from inspection on the basis of legal advice privilege since the work had not been conducted in a "legal context".

The Court of Appeal disagreed, finding that even work and communications which required no legal skills and which were capable of being carried out by a non-lawyer, fell within the "legal context" in which Dechert was instructed to provide legal advice in relation to the suspected fraud. The Court of Appeal established that Dechert was engaged in the investigatory process to "bring their lawyers' skills to that process and to conduct it through lawyers' eyes". Legal services which are capable of being protected by legal advice privilege are therefore not limited to advice on the black letter law, but extends to practical aspects of legal proceedings and preparations thereof as well.  


The Court of Appeal's reformulation of the iniquity exception should be welcomed. It has always been tricky terrain, requiring practitioners to make decisions over the content of documents without necessarily knowing the full realm of the facts or arguments at play. While the iniquity exception rarely applies, the Court of Appeal's clarification of the legal test is an important development in English law and should provide a more informed basis for practitioners and the courts to make decisions on documents at interlocutory stages. Whether the redefined test makes an actual difference in practice remains to be seen. In addition, the full extent of what conduct amounts to an "abuse" of the lawyer/client relationship will likely require further testing.

The Court of Appeal's conclusion that litigation privilege may apply to proceedings which someone is not a party to is interesting – although the Court of Appeal tried to impose limits, there plainly would be many types of cases where a person may have an interest in proceedings even if they are not a party. It will be interesting to see what courts make of this development going forward.  

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