When are data and documents protected by legal privilege in the UK?
As part of a large and valuable dispute over the acquisition of MPS LLC (a group of sports rights agencies), the High Court recently ruled on the question of whether privilege could be claimed over data and documents collected from certain computer systems (Jinxin Inc v Aser Media Pte Ltd & Ors).
The claimant in this case (Jinxin, the acquirer of MPS) sought a declaration that several of the defendants (including employees and directors of MPS) were not entitled to claim privilege because they could not have had any reasonable expectation of privacy as part of the sale, and the data and documents were not confidential as against the claimant.
During the deal, Jinxin and its representatives were provided with information from email servers and computer drives, including email inboxes used by a number of individuals. To avoid reviewing documents that were legally privileged, Jinxin and its legal team set up keyword searches to “quarantine” certain files.
As a result, about half of the 1.5 million documents collected were quarantined. The judge, Deputy Judge Simon Salzedo KC, summarised Jinxin’s application as follows: “If the application succeeds, then it would mean that Jinxin could safely proceed to review all the relevant documents it holds without further quarantine issues.”
What is confidentiality?
The judge said that the question of confidentiality is not binary: if a company permits its employees to use its servers for private purposes but retains a right to monitor them, that does not mean it has completely free rein to do as it wants with private information found. He added that the question then was whether the circumstances of this case imported a duty not to pass on putatively privileged material:
“In my judgment, a reasonable person would be taken to know of the strong policy of the law in favour of legal privilege as a substantive right which is rarely overridden. The reasonable person would assume that the company's right to monitor and access data on its servers would not extend to locating and exploiting otherwise privileged material for the benefit of a person with an adverse interest to the owner of that privilege, even if that person was a majority shareholder of the company.”
He therefore concluded:
“I do not think that any putative privilege that may exist in the relevant documents has been lost for any of the reasons given by Jinxin. Even if I am wrong in that conclusion, it seems to me that it would not be safe for the court to make a final determination on the present evidence that confidentiality and therefore privilege has been lost in an unknown number of unidentified documents which had been stored on MPS servers at unknown times and in unknown circumstances.”
He added that, even if he had taken the view that confidentiality was most likely undermined by the way documents were stored on the servers, he would have declined to make a declaration on the basis that the evidence was inadequate: there are other ways of dealing with the disclosure problem such as employing a second legal team.
Importance of privilege
Privilege is important in many legal matters, including those relating to IP, so this judgment is useful in summarising the law and addressing some of the contentious issues that arise.
It also highlights that privilege can depend on the facts and circumstances of the case, so obtaining specific advice is always recommended.
To find out more about the issues raised in this blog contact Rosie Burbidge, Intellectual Property Partner at Gunnercooke LLP in London - email@example.com
#privilege #acquisition #confidentiality