It is hardly surprising that confidential or privileged documents which have or may have been illegitimately obtained cannot be used in evidence. However, as the High Court made clear in the context of a big money divorce case recently reviewed by Stuart Barton, that rule does not apply where such documents are likely to assist in exposing a fraudster’s schemes.
A wife had obtained a record financial award against her husband. He had, however, failed to pay a penny and her legal team was engaged in an international struggle to enforce the debt. A former adviser to her husband had provided the wife with a USB stick containing documents concerning the husband’s affairs. That prompted the wife’s lawyers to seek the Court’s guidance as to whether the documents could be retained and made use of in the enforcement proceedings.
Ruling on the matter, the Court noted that the former adviser’s employment contract with a company through which he dealt with the husband’s affairs contained a widely drawn confidentiality clause.
Many of the documents related to communications between the husband and his lawyers and they were therefore, on the face of it, absolutely privileged and thus inadmissible in evidence.
The Court, however, noted that it is a recognised exception to the rule that privilege does not extend to communications that are, whether lawyers know it or not, conducted with the intention of pursuing a fraudulent purpose. In finding that that exception applied, the Court noted that the husband had previously been found in contempt of court orders and to have engaged in an elaborate and dishonest campaign to evade enforcement of the wife’s award.
A brief perusal of the documents revealed that they formed part of the husband’s fraudulent scheme to defeat the wife’s claim. It was not a case where she had unlawfully accessed the husband’s confidential material, or procured another to do so, in the hope of obtaining some improper advantage. She had entrusted the documents to her lawyers, who had conducted a thorough review in order to weed out privileged material. In those circumstances, the Court found that it would be a disproportionate response to require the wife to destroy, or make no use of, documents which might assist in unravelling her husband’s schemes.
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