Background
In the recent case of Artisan Glass Studio Limited v The Liffey Trust Limited, Slovak Limited (substituted by Aviva Limited and Anor IEHC 278, which concerned fire damage to property, the High Court considered whether two engineers’ reports prepared on behalf of the Second Defendant’s insurer were protected from disclosure by litigation privilege.
The fire occurred on 2 November 2002, originating in the Second Defendant’s premises and spreading to other units in the complex, including the Plaintiff’s.
Aviva, the Second Defendant’s insurer, took over the running of the defence of the claim on behalf of the Second Defendant.
As part of its investigation of the loss, Aviva appointed consulting scientists and engineers, Burgoynes, to advise on the cause of the fire. Burgoynes were appointed on 4 November 2002. Burgoynes produced a record of inspection on 15 November 2002 and a Report on 20 March 2003. In the Affidavit of Discovery, Aviva claimed litigation privilege over the record of inspection and the Report of Burgoynes.
Relevant factors for litigation privilege to apply
The Court considered the relevant factors when deciding on a claim of litigation privilege, as set out below:
“(a) Whether litigation was reasonably apprehended at the time the documents in question were brought into being;
(b) Whether the documents in question were brought into being for the purpose of that litigation;
(c) If the documents were created for more than one purpose, the documents will be protected by litigation privilege in the event that the litigation was the dominant purpose;
(d) The party claiming privilege has the onus of proving that the documents are protected by privilege.”
Both documents created at a time when litigation was reasonably apprehended
The High Court found that litigation was reasonably apprehended at the time that the documents in question were brought into being. In particular, the Court cited that fact that the Second Defendant’s solicitors had been formally instructed on the matter on 16 November 2002 and prior to that date, the solicitors had discussions with Aviva and their loss adjusters in relation to potential third party claims that may be initiated as a result of the fire. By the time that the Burgoynes Report was prepared on 20 March 2003, a letter of claim had been issued on behalf of one of the occupiers of one of the other units in the complex.
However, the court found that the fact that litigation was apprehended at the time of the creation of these reports was “not itself determinative that they are protected by litigation privilege.”
Multiple purposes of the reports
The Court found that it was clear from the affidavits filed in the matter that the reports were prepared for more than one purpose. In order for the reports to be protected by litigation privilege, Aviva would have to show that the dominant purpose of the reports was apprehended litigation by third party claimants. The question of dominant purpose is a matter for objective determination by the court.
The Court was of the view that Burgoynes had been engaged not only to assist with the defence of potential third party claims, but also to assist with issues as to Aviva’s liability to its own insured in respect of the damage done to the insured’s own premises.
Record of inspection not privileged
In relation to the record of inspection dated 15 November 2002, the Court found that apprehended litigation was not the dominant purpose of this document, rather that it was “equally capable of being referable to enquiries being made on behalf of the insurance company as to whether it had a liability to make a payment to its own insured.” Therefore, the record of inspection was not protected by litigation privilege and Aviva was directed to produce this document to the Plaintiff.
Report was privileged
However, the Court found that by the time that the Burgoynes Report was prepared on 20 March 2003, Aviva was no longer considering the question of its own liability to its own insured. The Court found that the report did not “contain any material which suggests that this issue was still under active consideration” and that the dominant purpose of the Burgoynes report was the apprehended litigation as between the different occupiers of the other units. Accordingly, the Burgoynes Report was protected by litigation privilege.
Consider the purpose of the document
This case highlights that it is for the party claiming privilege to prove that the document attracts privilege. Specifically in respect of litigation privilege, when parties are preparing documentation or instructing other parties to prepare documents that might be relevant in a litigation, they should consider carefully the purpose of the creation of the document. Only documents created for the dominant purpose of litigation will be protected by litigation privilege.
Contributed by Michelle Martin
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