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10 Apr 2024

Privilege and the iniquity exception: clarifying the boundaries


In a recent Practical Law article, Ben Sigler, Ayo Oketunji and Rebecca Garrick look at the Court of Appeal decision in Al Sadeq v Dechert LLP and others [2024] EWCA Civ 28. The judgment clarifies the scope of legal professional privilege and establishes a new merits threshold for the application of the iniquity exception. It also confirms that litigation privilege may sometimes apply to non-parties.

The dispute

Mr Al Sadeq was the deputy CEO of the sovereign wealth fund of the Emirate of Ras-Al-Khaimah (RAK). He was detained in RAK in 2014 following allegations of fraud and misappropriation of the fund’s assets. The law firm Dechert LLP acted for RAK’s Investment and Development Office and Ras-Al-Khaimah Development LLC (together, the RAK client). Mr Al Sadeq brought proceedings against Dechert LLP and three of its former partners (together, Dechert), alleging that they were complicit in his wrongful arrest, rendition to, and detention in, RAK, and mistreatment while he was detained.

After disclosure, Mr Al Sadeq made an application to court to inspect certain documents that Dechert had withheld from disclosure or redacted on the basis of legal professional privilege (see Legal professional privilege). The High Court rejected the application in its entirety (www.practicallaw.com/w-039-6024). It held, among other things, that:

  • The iniquity exception, which means that privilege does not apply to protect communications that are made in furtherance of a crime, fraud or equivalent conduct, was not engaged because there was not at least a strong prima facie case of iniquity.
  • Legal advice privilege could apply to documents that were created for the dominant purpose of Dechert’s investigative work because they had been produced in a legal context and involved legal advice and assistance to the RAK client.
  • Litigation privilege can apply to communications belonging to a non-party to litigation if that party has sufficient interest in prospective or actual litigation so that it seeks legal advice and, in connection with that legal advice, communicates with third parties.

Mr Al Sadeq appealed on all points. Dechert cross-appealed the court’s decision not to apply the principle established in Three Rivers District Council and others v Governor and Company of the Bank of England (No 5) in the context of litigation privilege ([2003] EWCA Civ 474) (see The principle in Three Rivers (No 5)).

The Court of Appeal allowed Mr Al Sadeq’s appeal in relation to the iniquity exception but dismissed the other grounds.

Iniquity exception

The court overruled the High Court’s decision that a strong prima facie case of iniquity is required to engage the iniquity exception. Instead, it considered that the merits threshold is based on whether, in the assessment of the material available to the decision maker, it appears more likely than not on a balance of probabilities that the iniquity exists. In this context, the decision maker may be the party, the party’s legal adviser conducting disclosure or the court.

Applying this test, the court held that the iniquities alleged by Mr Al Sadeq had been established. This included his rendition to, and detention in, RAK, the conditions in which he was detained in RAK, and his lack of access to legal representation while in RAK.

The court noted that, in exceptional circumstances, it may be appropriate to use a balance of harm test as an alternative threshold. This would involve weighing up the harm that would be suffered by one party if disclosure were granted against the harm that would be suffered by the other party if disclosure were refused.

The court also rejected Dechert’s narrow formulation of the iniquity exception; that is, that only documents created for the purpose of furthering the iniquity would be disclosable. It held that where the merits threshold has been met, in addition to documents created to further the iniquities, documents that were brought into existence “as part of” the iniquities would also be disclosable. The court made this formulation deliberately wide to cover documents that report on, or reveal, the iniquities. However, the court emphasised that there must be an abuse of the lawyer and client relationship for the iniquity exception to apply.

Litigation privilege

The court upheld the High Court’s decision that there is no principled reason why litigation privilege cannot extend to a non-party, as long as the elements giving rise to this privilege are otherwise fulfilled. It did so for two reasons: parties should be able to consult their lawyers in confidence and should be able to prepare their case as fully as possible with the comfort that communications made for that purpose will be protected from disclosure. On this basis, the communications of various sufficiently interested non-parties, such as insurers, litigation funders, individuals in group litigation, underlying parties in a joint venture and witnesses, can be protected by litigation privilege.

Having established that, as a matter of principle, litigation privilege can apply to non-parties, it followed that the relevant perspective for determining when litigation was in reasonable contemplation was that of the non-party privilege holder; here, this was the RAK client, not the RAK public prosecutor, which was effectively a party to the criminal proceedings.

The question of whether the non-party must also show a sufficient interest in the proceedings was left open, as this was clear on the facts because Ras-Al-Khaimah Development LLC, the relevant RAK client for these purposes, clearly had a significant interest in the criminal proceedings, which concerned RAK’s sovereign wealth fund. However, the court noted that it would be extremely rare to find a case where the dominant purpose test is satisfied but the party asserting privilege is essentially a stranger to the litigation.

The court also confirmed that the principle in Three Rivers (No 5), which the court acknowledged has received considerable criticism, both judicially and by leading commentators, and has not been followed in other jurisdictions, does not apply to litigation privilege. Litigation privilege covers communications with third parties, which are necessarily outside of the Three Rivers (No 5) principle.

Legal advice privilege

The court rejected Mr Al-Sadeq’s argument that the work done by Dechert in relation to the investigation of the alleged fraud and misappropriation was not privileged as it involved no legal advice or analysis and could have effectively been carried out by a non-lawyer. It held that Dechert was engaged in the investigatory process in order to bring its lawyers’ skills to that process and to “conduct it through lawyers’ eyes”. Even if, on its face, Dechert’s work could have been conducted by a non-lawyer, it could still have been carried out within the legal context in which Dechert was instructed.

However, the court made clear that, if a document had been created in a purely investigative role, divorced from Dechert’s role as lawyers, it would not attract legal advice privilege. Accordingly, communications with the RAK public prosecutor, or for the purposes of public relations, were disclosed as they were not privileged.

Key takeaways

The decision is helpful in clarifying a number of important points in relation to legal professional privilege. There is now a new merits threshold for applying the iniquity exception: save in exceptional circumstances, the iniquity exception will apply if, on the balance of probabilities (that is, more likely than not), the relevant iniquity exists. A document will fall within the exception if it is brought into existence as part, or in furtherance, of the iniquity, which includes reporting on or revealing the iniquity.

One of the court’s most significant findings was that litigation privilege can apply to non-parties’ communications where the non-party would otherwise be affected by, or benefit from, the litigation. In Al Sadeq, the non-party was the alleged victim of a crime, but the same could be said of non-parties such as litigation funders or insurers.

The court’s confirmation that legal advice privilege can apply to documents that are prepared by lawyers conducting an investigation if those lawyers are engaged for their legal expertise and the advice is provided in that context brings additional certainty in this area (see feature article “Privilege in investigations: the journey continues). However, documents created in a context divorced from a lawyer’s legal role will not be privileged.

Legal professional privilege

There are two forms of legal professional privilege: litigation privilege and legal advice privilege. Litigation privilege applies where a document was created when litigation was reasonably contemplated and was prepared for the dominant purpose of:

  • Enabling legal advice to be sought or given.
  • Seeking or obtaining evidence or information to be used in, or in connection with, anticipated or contemplated proceedings.
Legal advice privilege applies to confidential communications between lawyers and their clients for the purpose of giving or receiving legal advice.

The principle in Three Rivers (No 5)

The Court of Appeal’s decision in Three Rivers District Council and others v Governor and Company of the Bank of England (No 5) related to legal advice privilege ([2003] EWCA Civ 474; see News brief “Legal advice privilege: here to stay). One of the key issues for the application of legal advice privilege is to determine whether a communication is between the client and its lawyer. In Three Rivers (No 5), the court held that only communications involving individuals who are authorised to seek and receive legal advice on behalf of the client attract legal advice privilege. This decision attracted considerable criticism as it significantly narrowed the scope of legal advice privilege; for example, the information on which a corporate client might seek legal advice is unlikely to be solely in the hands of the employees who are tasked with instructing its lawyers.


Ayo Oketunji

Ayo Oketunji
Managing associate

T:  +44 20 7809 2202 M:  Email Ayo | Vcard Office:  London

Rebecca Garrick

Rebecca Garrick
Senior knowledge lawyer

T:  +44 20 7809 2548 M:  Email Rebecca | Vcard Office:  London