In the recent judgment in Palladyne International Asset Management B.V. v Upper Brook and Ors, Justice Segal refused to make an order for the inspection of certain documents over which the Defendants claimed litigation privilege.
While on the facts of the case, the Defendants were not able to establish the claim to privilege and the right to withhold inspection, the Court concluded that an order for inspection would nevertheless be disproportionate and inconsistent with the overriding objective.
The case concerned an application for inspection of reports produced by Deloitte and the question was whether the Defendants had been able to establish that the Deloitte documents were protected by litigation privilege. The Claimants challenged the Defendants’ claim to privilege on the basis that there was no evidence that litigation against the Plaintiff was in contemplation when Deloitte was instructed to prepare its reports and that there was nothing to evidence the claim that litigation was a real likelihood rather than a mere possibility.
The Defendants argued that it was clear that litigation was in contemplation at the time when the reports were produced and that there was evidence to support the conclusion that litigation was reasonably in prospect. Additionally, it was evident that the dominant purpose of use for the reports in question was for litigation.
Based on the evidence before the Court, the judge concluded that he was not satisfied that the Defendants had established the right to withhold inspection. However, the Plaintiff was well aware of the existence of the claim to privilege and withheld any challenges to the claim throughout the course of the trial. While sight of the documents may assist the Plaintiff and steer its next steps in litigation, the Court held that an order for inspection at this stage in the proceedings would not be in line with the overriding objective and would not be necessary for the fair disposal of the proceedings.