Ipsofactoj.com: International Cases [2002] Part 7 Case 7 [CAEW]


COURT OF APPEAL, ENGLAND & WALES

Coram

Sumitomo Corporation

- vs -

Credit Lyonnais Rouse Ltd

LORD PHILLIPS OF WORTH MATRAVERS, MR

LORD JUSTICE JONATHAN PARKER

LORD MUSTILL

20 JULY 2001


Judgment

Lord Justice Jonathan Parker

This is the judgment of the court.

INTRODUCTION

  1. This is an appeal by Sumitomo Corporation, the claimant in the action, against an order made by Andrew Smith J on 14 February 2001 whereby he rejected Sumitomo's claim to legal professional privilege in relation to a number of English translations of documents in the Japanese language. The Japanese documents from which the translations were made are all in the control of Sumitomo and no claim to privilege is made in respect of them, but Sumitomo claims privilege in respect of the translations on the ground that they are original documents which came into existence for the purpose of litigation, alternatively on the ground that they represent a collection of documents selected by Sumitomo's lawyers for the purpose of giving legal advice and/or for the purpose of litigation. The defendant in the action, Credit Lyonnais Rouse Ltd ("CLR"), successfully opposed the claim for privilege on each of those grounds.

  2. The judge refused permission to appeal, but permission was granted by Tuckey LJ on 20 March 2001.

    THE FACTUAL AND PROCEDURAL BACKGROUND

  3. Sumitomo's claim in the action arises out of the unauthorised trading activities of a Mr. Hamanaka, a former employee of Sumitomo, during the period 1985-1996. Mr. Hamanaka was, until his confession in June 1996, employed by Sumitomo as head of a team trading on the copper cash and futures markets. According to Sumitomo, Mr. Hamanaka's unauthorised trading has caused it losses in the region of US$2.6billion.

  4. In December 1995 (before it became aware of Mr. Hamanaka's unauthorised trading activities) Sumitomo received a subpoena from the United States Commodity Futures Trading Commission ("CFTC") requiring it and its US subsidiary to provide details of their copper trades and to produce various categories of documents relating to those trades. Sumitomo retained US lawyers, Messrs Paul, Weiss, Rifkind, Wharton & Garrison ("PW"), to advise it on the issues raised by the subpoena. In January 1996 the UK Securities and Investment Board also commenced an investigation into Sumitomo's copper trades. PW represented Sumitomo in this investigation.

  5. In June 1996 Mr. Hamanaka confessed to having engaged in a ten-year course of unauthorised trading. Shortly thereafter, a class action was brought against Sumitomo in New York. Since then, Sumitomo has been the subject of regulatory investigations in the United Kingdom and the United States and has become a party (whether as claimant or defendant) to no less than 24 civil actions in the United States, the United Kingdom and Japan, arising out of Mr. Hamanaka's unauthorised trading. Those regulatory and legal proceedings have, to varying extents, involved an analysis of Sumitomo's copper trading activities and an inquiry as to the assistance which third parties may have provided to Mr. Hamanaka in the carrying out and the concealment of his unauthorised activities.

  6. From late December 1995 to mid-June 1996 PW assembled a large amount of documentation to assist Sumitomo and its US subsidiary in responding to the CFTC subpoena. This process continued following Mr. Hamanaka's confession. It included what was described in evidence as "a comprehensive document collection exercise" at Sumitomo's offices in Tokyo and at its subsidiaries' offices in New York, Hong Kong and London. This exercise resulted in the assembling of some 6.9 million pages of documentation, mostly in Japanese. The next step was for a team of about 30 lawyers from PW, assisted by translators, to carry out a review of each document in this collection to determine whether and to what extent it was or might become relevant to the current, or any future, investigations and proceedings arising out of Mr. Hamanaka's unauthorised activities. Based upon this review, PW lawyers selected certain documents for inclusion in a computerised litigation database ("the PW database"). About 4 per cent of the totality of the documentation was imaged onto the PW database.

  7. As part of this review process, which continued until 1998, PW commissioned English translations of some 5,000 selected documents (about 30,000 pages, representing some 0.4 per cent of the totality of the documentation). The first step in the process of selection was for PW lawyers to identify relevant issues and transactions. The lawyers then reviewed each document with the aid of a translator. The translator would give a general indication as to the nature of the document and a summary of what it contained, and the lawyer would then make a judgment as to whether or not it should be translated, and if so with what degree of priority. Documents falling within the high priority category would be translated straight away, and with a high degree of refinement. Documents which were given lower priority were translated with less urgency and with lesser degrees of refinement.

  8. In addition, since October 1998 Ashursts have selected some twenty documents in Japanese for translation into English, in whole or in part, by Mr. Sugiyama, a senior assistant solicitor with Ashursts. Some of Mr. Sugiyama's translations are more refined versions of existing translations commissioned by PW, but others are new translations. In addition, Ashursts have submitted five Japanese documents to PW for translation. The evidence is that all this was done for the purpose of the present action.

  9. We will refer hereafter to the translations commissioned by PW as "the PW translations" and to those commissioned by Ashursts as "the Ashursts translations".

  10. The claim in the action, which was commenced on 27 July 1999, relates to a series of transactions carried out by Mr. Hamanaka in 1993 through CLR as clearing broker. Sumitomo claims that by reason of these transactions it lost some US$247million, and it alleges that by clearing the transactions, and by providing credit lines for them, CLR dishonestly assisted Mr. Hamanaka's breaches of duty and/or knowingly procured breaches of his contract of employment. Sumitomo claims equitable compensation and/or damages from CLR to the full extent of its loss. CLR denies these allegations, and alleges that at the material time Sumitomo knew of Mr. Hamanaka's unauthorised activities.

  11. Pleadings in the action are closed. At the date of the hearing before the judge, the trial of the action was fixed to start in April 2002. That fixed date has, however, since been vacated and a new date is to be fixed. The trial is estimated to last 16 weeks.

  12. By letter dated 21 February 2000, written in advance of and in anticipation of the first case management conference, Messrs Clifford Chance, CLR's solicitors, proposed (among other things) that each party disclose translations of foreign language documents which it already had in its control, without prejudice to issues of accuracy. Given the large number of Japanese documents disclosable in the action by Sumitomo, and the fact that (according to the evidence of Mr. Jones-Parry of Clifford Chance) the cost of translating a document from Japanese into English is approximately 72 per standard page, acceptance of this proposal would have resulted in very substantial savings of time and costs. However, the proposal was rejected by Messrs Ashurst Morris Crisp ("Ashursts"), Sumitomo's solicitors, who claimed privilege in respect of translations in its control (that is to say the PW translations and the Ashursts translations) on the alternative grounds indicated earlier. Accordingly, at the first case management conference, held on 13 October 2000, Morison J directed a hearing in relation to Sumitomo's claim of privilege. That hearing took place before Andrew Smith J, and resulted in the order which is the subject of this appeal.

  13. It is also to be noted that at the case management conference Morison J directed "special disclosure", in accordance with Appendix 9 to the Practice Direction relating to the Commercial Court. The effect of such a direction is to extend disclosure beyond that which is required under the Civil Procedure Rules by way of standard disclosure. Rule 31.6 provides that standard disclosure requires a party to disclose only the documents on which he relies and those documents which adversely affect his case or the case of another party or which support the case of another party. "Special disclosure", however, includes

    1. documents which are relevant to the issues in the proceedings but which would not be disclosable by way of standard disclosure (e.g. documents which simply form part of the factual background to the issues in the action, but which do not tend to undermine either side's case) and

    2. documents often referred to as "train of inquiry documents", that is to say documents which may lead to a train of inquiry enabling a party to advance his own case or damage that of his opponent (as so described by Brett LJ in Compagnie Financiere et Commerciale du Pacifique v Peruvian Guano Co (1882) LR 11 QBD 55, CA).

  14. Since the hearing before the judge, lists of documents have been exchanged. The parties have, however, agreed not to proceed with inspection pending the determination of the present appeal.

  15. In its list of documents, Sumitomo has disclosed some 89,000 pages of documentation, which includes some 3,400 documents in Japanese. Of the documents in Japanese, 725 have been translated in whole or in part into English (554 being full translations and 171 being partial translations). The claim for privilege extends to all 725 translations.

  16. CLR has also disclosed a large number of documents, including 250 or so documents in French.

    THE CLAIM FOR PRIVILEGE

  17. The claim for privilege is made by Mr. Christopher Vigrass, a partner in Ashursts. In his principal affidavit, he makes the claim in respect of the PW translations in the following terms:

    10.

    In the light of (i) the extensive legal input and judgment involved in both PW's initial selection of documents for translation, and their subsequent review, and (ii) the review of translations relevant to this action undertaken by my senior assistants and myself .... I consider that the translations relevant to this action are privileged. In addition, I do not consider that those translations can be categorised as mere copies of otherwise unprivileged documents.

    11.

    In United States terminology, the translations attract work-product privilege .... I believe that they are also privileged in the English sense, both on the basis of legal professional and litigation privilege. The translations relevant to this action were produced in the period 5 July 1996 to 27 January 1998 and hence were created in connection with and in contemplation of [the various regulatory investigations and legal proceedings] ....

    12.

    (a)

    Disclosure of the translations relevant to this action would indicate what PW considered were sufficiently important documents to require translation for the purposes of giving advice generally, and specifically for the purposes of litigation and also would give a clue to and betray the general trend of PW's advice in the sense that it would disclose the direction of their enquiries and their areas of focus and concern.

    (b)

    It is apparent that some of the translations were translated to a greater degree of detail and accuracy than others: accordingly disclosure would give an idea of the relative importance attributed by PW to each translation.

    16.

    I believe that the Japanese language translations contained within the PW database are privileged and that if the Court were to order production of those translations relevant to this action, it would result in the Claimant giving the Defendant a clue to, or betray the trend of, the legal advice provided to the Claimant in the sense that it would disclose the direction of PW's enquiries and their areas of focus and concern.

  18. In relation to the Ashursts translations, Mr Vigrass says this:

    14.

    Save for previously pleaded translation extracts, the Claimant asserts privilege in relation to all such translations refined or created by Mr Sugiyama, or selected by my firm for translation by PW, as their selection and production has similarly involved legal input, judgment and review.

    THE JUDGMENT OF ANDREW SMITH J

  19. Having summarised the factual and procedural background and having referred to the passages in Mr Vigrass's principal affidavit which we have quoted, the judge referred to a number of general principles relating to legal professional privilege in the context of litigation, pending or contemplated, none of which general principles is controversial in the instant case. The general principles to which the judge referred are these:

    • Privilege attaches to documents which represent confidential communications made between a party or his legal adviser and third parties for the purpose of litigation (Anderson v Bank of British Columbia (1876) 2 Ch D 644).

    • Privilege does not attach to a document obtained by a party or his adviser for the purpose of litigation if the document did not come into existence for that purpose (Ventouris v Mountain [1991] 3 AER 472 CA).

    • A copy of an original document which is not itself privileged is privileged only if (a) the copy came into existence for the purpose of litigation, and (b) the original document is not and has not at any time been in the control of the party claiming privilege (see The Palermo (1883) 9 PD 6 and Watson v Cammell Laird & Co Ltd [1959] 1 WLR 702 CA).

  20. The judge also referred to what he described as an important qualification on the application of the last of those general principles, as exemplified in Lyell v Kennedy (No 3) (1884) 27 Ch D. 1 CA, where "pre-existing documents, and even documents on public records, have been selected by a solicitor for the purpose of advising his client and obtaining evidence and the solicitor has exercised skill and judgment in the selection" (see Dubai Bank Ltd v Galadari [1990] Ch 98, at 108 per Dillon LJ). As noted earlier, Sumitomo rely on such a qualification in support of their alternative ground for claiming privilege for the translations.

  21. The judge then turned to the first ground of Sumitomo's claim for privilege, and to the question whether for the purposes of disclosure the translations fall to be treated as if they were copies of the documents from which they were made. Since, as is common ground, the documents in Japanese from which the translations were made are

    1. in the control of Sumitomo and

    2. unprivileged,

    an affirmative answer to this question would, on the application of the general principles set out above, lead to the rejection of Sumitomo's first ground for claiming privilege, leaving Sumitomo to fall back on its alternative ground based upon Lyell v Kennedy.

  22. On this question, the judge accepted CLR's submission that there is no reason in principle why translations of unprivileged documents should be treated any differently, so far as legal professional privilege is concerned, from copies of unprivileged documents, since the process of translation does not import any element of confidentiality requiring protection. The judge continued (in paragraph 21 of his judgment):

    The real question, it seems to me, is whether the translation imports any relevant extrinsic element into the document. By "relevant extrinsic element", I mean something which, as a matter of principle and policy, should import privilege because it is of a confidential nature. This is because the justification for legal professional privilege is the requirement that the client "should be able to place unrestricted and unbounded confidence in the professional agent, and that the communications he so makes to him should be kept secret, unless with his consent, .... that he should be enabled properly to conduct his litigation": Anderson v Bank of British Columbia .... p.649 per Jessel MR. More simply, "It is the protection of confidcntial communications between client and legal adviser which lies at the heart of legal professional privilege", Ventouris v Mountain at p.475j per Bingham LJ. On this basis it seems to me that there is no justification for affording protection from disclosure to translations of unprivileged documents.

  23. The judge then turned to Sumitomo's alternative ground, based upon Lyell v Kennedy, and addressed the question whether the translations fall within an exception to the general rule that copies of unprivileged original documents in the control of a party to litigation should be disclosed, on the footing that they represent the fruits of a selection process carried out by lawyers the inspection of which would or might breach confidentiality between lawyer and client. The judge adopted Bingham LJ's formulation of the ratio of Lyell v Kennedy (see Ventouris v Mountain at p.479f), as follows:

    The ratio of the decision [in Lyell v Kennedy] is, I think, that where the collection of documents which a solicitor has copied or assembled betrays the trend of the advice which he is giving the client the documents are privileged.

  24. On that basis, the judge concluded that for Sumitomo to succeed on its alternative ground it would have to show a risk that disclosure of the translations would "betray the trend of the advice" of their lawyers (that is to say, of PW in relation to the PW translations and of Ashursts in relation to the Ashursts translations), and that the mere fact that the selection process which led to the translations being commissioned required the professional care and skill of the lawyers was not enough to found the claim for privilege.

  25. The judge then turned to a consideration of Mr Vigrass' evidence, which consisted of his principal affidavit and a short supplementary affidavit.

  26. The judge accepted, as was common ground before him, that where a claim for privilege is asserted on affidavit by a solicitor, the court should be cautious about going behind that affidavit. Nevertheless, he considered it appropriate to do so in the circumstances of the instant case.

  27. After commenting that there was no evidence before the court from anyone with specific knowledge of the advice which PW had given Sumitomo to confirm the views expressed by Mr Vigrass, the judge stated his conclusion that the assertion of privilege made by Mr Vigrass should not be accepted, and he set out the various considerations which led him to that conclusion. Those considerations may be summarised as follows.

    • Firstly, echoing his earlier comment about lack of evidence, the judge noted that neither PW nor the clients had asserted a belief that PW's advice or thinking might be betrayed. 

    • Secondly he accepted a submission made by Mr Briggs QC (appearing for CLR) that it must be highly improbable that every single one of the translations in question would betray confidentiality in some way. Mr Briggs had given a number of examples of documents central to the dispute in the action, the translation of which (as he submitted) could not possibly give any clue as to PW's thinking. The judge referred to these examples and noted that Sumitomo's claim for privilege is in the nature of what he described as a "blanket" claim, covering all the translations. The judge concluded that he should scrutinise such a claim with particular care.

    • Thirdly, the judge concluded that in two respects Mr Vigrass had unwittingly overstated Sumitomo's case when describing the prejudicial effect which an order for disclosure of the translations would or might have on Sumitomo's position in relation to disclosure in pending litigation in the United States.

  28. In paragraph 39 of the judgment, the judge summarised the position in relation to Mr Vigrass' affidavit as follows:

    Reading the affidavit of Mr Vigrass as a whole, I am left with the impression that he has not addressed his mind with precision to whether a claim for privilege in respect of each of the 700 translations is justified. Certainly, the explanation as to how the translations came into existence is appropriately detailed. However, Mr Vigrass is wholly unspecific as to the issues about which advice might be betrayed, whether the concerns of PW to which he refers were about regulatory investigation, about actual litigation, about anticipated litigation which in fact materialised, or about anticipated litigation which never came about. No indication is given even in the broadest terms as to the categories of documents which have been translated. I readily appreciate that any such evidence might have to be couched in cautious terms so as not to make disclosure of the very confidentialities that the claim for privilege is designed to protect. However, an affidavit of this kind should be specific enough to show something of the deponent's analysis of the documents and the claim for privilege.

  29. The judge then went on to consider the further question whether, even if the translations were not privileged, he ought as a matter of discretion to decline to order inspection of them. He concluded that there were no good grounds for exercising his discretion in that manner. The considerations which led him to that conclusion are set out in paragraph 40 of the judgment, which reads as follows:

    Sumitomo argue that even if the translations are not privileged, nevertheless I should not, as a matter of discretion, order their disclosure. The basis for this argument is that disclosure in these proceedings will jeopardise Sumitomo's privilege from disclosure in other proceedings in the United States. I have already indicated that I am not impressed by the evidence adduced on behalf of Sumitomo that this risk is realistic, but in any event this consideration does not seem to me to justify Sumitomo's argument. There can be no doubt that, apart from this consideration, disclosure of the translations would advance the overriding objective of dealing with cases justly. It is a matter between the litigants in the United States and for the courts of the United States whether disclosure of the translations in these proceedings should result in their disclosure in the United States. It is not for me to protect Sumitomo against those litigating against them elsewhere, nor to adopt procedures in this litigation with a view to protecting Sumitomo against applications by other litigants to the courts in the United States.

    THE ISSUES ON APPEAL

  30. There is no appeal against the judge's decision, as a matter of discretion, to order inspection. The issues on this appeal relate solely to the claim for privilege. The issues are:

    1. the general issue whether legal professional privilege extends to translations of unprivileged documents in the control of a party to litigation, where such translations have been made for the purpose of litigation; and

    2. if not, the particular issue whether in the circumstances of the instant case the translations nevertheless attract legal professional privilege on the basis that the selection of the documents to be translated was made by Sumitomo's lawyers for the purpose of litigation, with the consequent risk that the production of the translations would or might, as Mr Vigrass puts it, "give a clue to and betray the general trend of [the lawyers'] advice in the sense that it would disclose the direction of their inquiries and their areas of focus and concern".

  31. We will refer hereafter to issue (1) as "the purpose issue", and to issue (2) as "the selection issue".

    ISSUE (1):

    The purpose issue

  32. Lord Grabiner QC (who appears on this appeal with Mr Orlando Gledhill of counsel for Sumitomo) submits firstly that the translations are privileged as a result of the application of the ordinary rules relating to legal professional privilege, since it is clear from Mr Vigrass' evidence that the translations were created for the dominant purpose of obtaining information and/or giving advice in regard to and/or for use in actual or contemplated litigation. In support of this submission he referred us to passages in the judgments of Sir George Jessel MR (at first instance) and of James and Mellish LJJ in the Court of Appeal in Anderson v Bank of British Columbia, and in the judgments of Sir George Jessel MR and Cotton LJ in Wheeler v Le Marchant (1881) 17 Ch D. 675 CA.

  33. He submits that for the purposes of legal professional privilege a translation is not to be treated in the same way as a simple copy. A translation is, he submits, entirely different in nature from a copy. He points to the skill required of a translator (translation from Japanese being a process which, as he tells us and as we can well believe, requires a particularly high degree of skill) and to the fact that no two translations will necessarily be identical. In contrast, the purpose of a copy is to reproduce, so far as is practicable, the precise terms and form of the original. In that sense and to that extent, a copy is no more than a replica of the original document. Lord Grabiner points out that the question whether or not a copy is accurate can be determined simply by comparing it with the original document (assuming the original document to be still available), whereas in the case of rival translations the question which version should be preferred may well be an extremely difficult question to answer.

  34. In the alternative, Lord Grabiner submits that even if translations are to be equated with copies for the purpose of legal professional privilege, the judge was wrong in concluding that the translations did not attract privilege on ordinary principles. He submits that the true question is whether, as Mathew J put it in Chadwick v Bowman (1886) 16 QBD 561, at 562, the translations "really" came into existence for the purposes of the action. In Chadwick v Bowman the defendant claimed privilege in respect of copies of correspondence between him and a third party which he had obtained from the third party, the defendant having previously lost or destroyed the originals of the letters he had received from the third party and the copies of the letters he had himself written. A two-judge Court of Appeal, affirming the judge below, held that the copies were not privileged. Mathew J, agreeing with Denman J, said:

    I think that danger would follow if the privilege against inspection were made to cover such a case as this. It does not appear to me that these documents really came into existence for the purposes of the rule upon which the defendant's counsel relied.

  35. Commenting on Chadwick v Bowman in Watson v Cammell Laird Co Ltd at p.704, Lord Evershed MR said this:

    .... the essential fact [in Chadwick v Bowman] was that certain letters which the defendant had received, and copies of letters which he had written, had been at some stage destroyed by the defendant, and in order to replace them the defendant obtained from the third party, from and to whom they had been written, copies, which therefore would be available as secondary evidence of the original documents which he himself had lost or destroyed. The court said, accordingly, that these copies, the mere replacements of something which he would have had to produce himself, must be produced.

    (Emphasis added)

  36. Lord Evershed went on to quote the passage from the short judgment of Mathew J in Chadwick v Bowman quoted above.

  37. Lord Grabiner submits that, in contrast to the copy letters in Chadwick v Bowman, the translations in the instant case "really" came into existence for the purpose of litigation, and are not to be regarded as the equivalent of "mere replacements" or replicas of the Japanese documents from which they are derived. Lord Grabiner submits that the translations fall fairly and squarely within the category of material which "forms part of the brief", as that expression is used in the authorities (see, e.g., Anderson v Bank of British Columbia (above) at p.656 per James LJ and The Palermo (above) at p.8 per Butt J at first instance). He submits, based on the evidence of Mr Vigrass, that none of the original Japanese documents would have been selected for translation and/or been translated had PW not been retained to carry out an extensive document collection and review exercise for the purpose of advising and representing Sumitomo in actual and contemplated litigation and regulatory proceedings.

  38. Lord Grabiner further submits that the judge adopted a wrong approach in looking for the importation of a "relevant extrinsic element" into a document. That, he submits, is not an approach which accords with the authorities.

  39. Finally on the purpose issue, in his written skeleton argument Lord Grabiner submits that a conclusion that translations do not attract privilege would restrict the freedom with which foreign litigants are able to consult lawyers in this jurisdiction, since foreign litigants will have to be advised that all translations, even those created by lawyers as part of a document review exercise carried out in order to advise and represent the client, would be potentially disclosable to opponents; and that this would undermine the policy considerations which underlie the privilege rule. Lord Grabiner did not, however, elaborate upon these submissions in oral argument.

  40. Mr Briggs QC (who appears on this appeal with Mr Matthew Newick, solicitor, for CLR) acknowledges that a copy of an unprivileged document may in some circumstances be privileged if the copy was brought into existence for litigious purposes (i.e. where the original document is not and has never been in the control of the party claiming privilege) but he relies on the general principle, recognised by the Court of Appeal in Dubai Bank Ltd v Galadari, that a copy of an unprivileged document does not become privileged merely because the copy is made for litigious purposes. Thus, he submits, whilst it is necessary to found a claim to privilege on the fact that the document in question has been brought into existence for the dominant purpose of seeking legal advice and/or litigation, that is not always sufficient to attract privilege.

  41. He submits that the rationale for the general principle that a copy of a disclosable document is not privileged is that where a party has or has at some time had an unprivileged document in its control, any copy of that original document is a mere replacement of something which that party would have had to produce. In support of this submission, Mr Briggs relies on Dillon LJ's reference in Dubai Bank Ltd v Galadari at p.106H to Lord Evershed MR's interpretation of Chadwick v Bowman quoted earlier. This, he submits, is wholly consistent with the underlying rationale of legal professional privilege, which is that the client "should be able to place unrestricted and unbounded confidence in the professional agent, and that the communications he so makes to him should be kept secret" (see Anderson v Bank of British Columbia at p. 649 per Sir George Jessel MR). Mr Briggs submits that it follows that a party cannot claim privilege in respect of a document which contains essentially the same information as an unprivileged document which is or has been in his control.

  42. On that basis, Mr Briggs submits that the key question on the purpose issue is whether there is any reason in principle for treating translations of unprivileged documents differently from copies of unprivileged documents. As to that, he submits that no relevant distinction can be drawn between translations and copies. The substance of the matter, he submits, is that the process of translation (however skilful, time-consuming and intricate it may be) merely renders the contents of the original document intelligible to those who do not speak the language of the original. In particular, he submits, the process of translation does not create or import an element of confidentiality which the originals do not themselves possess, such as would warrant the protection of privilege. That, he submits, is what the judge had in mind when referring to the need for the importation of a "relevant extrinsic element".

  43. Finally on the purpose issue, Mr Briggs submits that there is no substance in Lord Grabiner's submission (which Mr Briggs describes as a submission in terrorem) that an order for disclosure of the translations will restrict the freedom with which foreign clients can consult lawyers in this jurisdiction and at the same time undermine the policy considerations which underlie legal professional privilege. He submits that, on the contrary, such an order would be entirely consistent with those policy considerations, as summarised in paragraph 21 of the judge's judgment (quoted earlier).

  44. We agree with the judge that in the context of legal professional privilege there is no relevant distinction to be drawn between a translation of an unprivileged document in the control of the party claiming privilege and a copy of such a document. Each derives solely from the original document, and each is directed at reproducing the sense of, and the information contained in, the original document as exactly and precisely as is reasonably practicable. Neither the process of copying nor the process of translation involves the addition of anything to or the subtraction of anything from the sense of the original document or the information contained in it. In particular, neither process in itself introduces any element of confidentiality which does not or did not exist in the original document. The fact that, unlike a copy, a translation is not a "replica" of the original document in the sense in which Lord Grabiner used that term does not seem to us to be a relevant distinction for present purposes.

  45. As Lord Evershed MR pointed out in the passage from his judgment in Watson v Cammell Laird Co Ltd quoted earlier, the documents for which privilege was claimed in Chadwick v Bowman constituted secondary evidence of the contents of the original documents which the defendant had lost or destroyed. That, as it seems to us, was why Mathew J concluded that the documents had not "really" come into existence for the purpose of the litigation: on analysis, as Lord Evershed pointed out, they were no more than replacements (that is to say, secondary evidence of) original unprivileged documents which the defendant would have been required to produce had such documents remained available for production.

  46. Accordingly, we agree with the judge that there is no reason in principle why, in the context of legal professional privilege, translations should not be treated in the same way as copies. Indeed, it seems to us that principle positively requires that they should. Legal professional privilege is directed at the preservation of confidence in communications between lawyer and client and in documents which, as Butt J put it in The Palermo, "form part of the brief" in relation to pending or contemplated litigation. In our judgment, principle requires that the rules governing legal professional privilege should apply equally to all reproductions of original documents, whether the process of reproduction consists of copying or of translation.

  47. We therefore conclude that the judge was right to resolve the purpose issue in favour of CLR and to reject the primary ground of Sumitomo's claim for privilege.

    ISSUE (2):

    The selection issue

  48. As explained earlier, this issue only arises if Sumitomo fails to make good its claim to privilege on its first ground, that is to say if (as we have concluded) the translations fall to be treated in the same way as copies for the purpose of legal professional privilege.

  49. Lord Grabiner acknowledges the general rule recognised by the Court of Appeal in Dubai Bank Ltd v Galadari that (to use the words of Bingham LJ in Ventouris v Mountain at p.483d):

    .... if a document is not privileged when a party receives it a copy of the document does not become so because a solicitor makes the copy for litigious purposes.

  50. Lord Grabiner submits, however, that the translations in the instant case fall within the exception to that general rule exemplified in Lyell v Kennedy.

  51. In Lyell v Kennedy the plaintiff claimed to be entitled to land as purchaser from the heir-at-law of an intestate, who had died many years earlier. The land was in the possession of the defendant, and the central issue in the action was whether the defendant's possession barred the plaintiff's claim. This in turn raised issues as to the intestate's pedigree and as to the heirship to her estate. In the course of preparing the defendant's defence in the action, his solicitors had obtained copies of and extracts from certain entries in public registers, together with photographs of certain tombstones and houses. By his affidavit of documents the defendant objected to produce these documents on the ground firstly that they had come into existence for the purpose of the litigation, and secondly (See p.7 of the report) :

    that for the purpose of his defence .... he had through his solicitors to obtain the assistance of counsel, and for that purpose to make searches and inquiries, and obtain copies of entries in registers, public records, and other original documents, not in his possession, and that his solicitors employed confidential clerks, and confidential agents, and his solicitors and their clerks and agents in the course of such employment and for the purposes aforesaid, made and obtained the copies, and procured the photographs.

  52. The plaintiff sought disclosure, contending that the documents in question were unprivileged. Opposing disclosure, the defendant argued that (See p.12 of the report):

    .... the discretion exercised by the solicitor .... in the choice of a series of extracts and copies, records and registers, and the omission of others, prevents it being a mere servile copying of public documents, which would not be privileged, but that it represents the work of the solicitor's mind, and might be a means of showing to the Plaintiff the idea entertained by him of his client's case.

  53. Addressing the claim of privilege, Cotton LJ said this (at p.25):

    What ought we to do here? Here is a litigation about pedigree and the heirship to a lady who died many years ago; and it is sworn by the Defendant that for the purpose of defending himself against various claimants he has made inquiries, and that he has obtained every one of those documents for the purpose of protecting himself, and that he has got them, not himself personally, but that his solicitors have got them, for the purpose of his defence, for the purpose of instructing his counsel, and for the purpose of conducting this litigation on his behalf. Now no case has been quoted where documents obtained under such circumstances have been ordered to be produced. In my opinion it is contrary to the principle on which the court acts with regard to protection on the ground of professional privilege that we should make an order for their production; they were obtained for the purpose of his defence, and it would be to deprive a solicitor of the means afforded for enabling him to fully investigate a case for the purpose of instructing counsel if we required documents, although perhaps publici juris in themselves, to be produced, because the very fact of the solicitor having got copies of certain burial certificates and other records, and having made copies of the inscriptions on certain tombstones, and obtained photographs of certain houses, might shew what his view was as to the case of his client as regards the claim made against him. There is no case, as I have said before, which is exactly in point, but Walsham v Stainton, though different in its circumstances, somewhat illustrates the principle to which I am referring, because there, when that case came before Vice-Chancellor Wood, he protected the records and extracts from books which had been made by an accountant for the defendants, who had collected together a number of entries, because the extracts, when put together, shewed the view which he and the solicitor of the defendants took of the particular fraud which they were there investigating, and the Judge considered that to order the defendants to produce them would be not only giving production to the parties who were asking for production, but giving them a clue to the advice which had been given by the solicitor, and giving them the benefit of the professional opinion which had been formed by the solicitor and those who had acted in a professional capacity for the defendant.

    In my opinion, therefore, in this case, without saying what ought to be done if there were any different case made before the Court with regard to documents like these, it would not be in accordance with the rules which have guided this Court in deciding what is professional privilege in regard to the production of documents, to order their production.

  54. Bowen LJ agreed, saying this (at p.31):

    A collection of records may be the result of professional knowledge, research, and skill, just as a collection of curiosities is the result of the skill and knowledge of the antiquarian or virtuoso, and even if the solicitor has employed others to obtain them, it is his knowledge and judgment which have probably indicated the source from which they could be obtained. It is his mind, if that be so, which has selected the materials, and those materials, when chosen, seem to me to represent the result of his professional care and skill, and you cannot have disclosure of them without asking for the key to the labour which the solicitor has bestowed in obtaining them.

  55. Fry LJ agreed with both judgments.

  56. As noted earlier, in Ventouris v Mountain Bingham LJ said:

    The ratio of the decision [in Lyell v Kennedy] is, I think, that where the selection of documents which a solicitor has copied or assembled betrays the trend of the advice which he is giving the client the documents are privileged.

  57. Lord Grabiner submits that the starting-point for the court in addressing the selection issue, as the judge accepted, is that the court should accept a solicitor's affidavit claiming privilege as conclusive "unless it can be seen distinctly that the oath of the party cannot be relied on" (see the note at 24/3/5 in the Supreme Court Practice 1991, quoted by Morritt J in Dubai Bank Ltd v Galadari (No 7) [1992] 1 WLR 106, at p.112B). He submits that there are no grounds in the instant case for going behind the evidence of Mr Vigrass or for querying his conclusions in relation to the claim of privilege.

  58. Turning to the evidence of Mr Vigrass, Lord Grabiner points out that the collection of translations in respect of which privilege is claimed was the product of the lawyers' knowledge, research and skill, and that the minds of the lawyers chose which documents to translate. He further points out that the number of documents selected for translation by PW (some 5,000) was a strikingly small proportion of the 6.9 million or so pages which comprise the totality of Sumitomo's potentially disclosable documentation. He also stresses that, as Mr Vigrass deposes, the selection was made in the light of the "then identifiable key issues and potentially relevant counterparties/events".

  59. Lord Grabiner further points out that in setting out his reasoning on the selection issue the judge did not expressly refer to the evidence of Mr Vigrass as to the relative importance attached by the lawyers to each translation, as demonstrated by the relative degrees of refinement of the various translations.

  60. As to the judge's comment that there was no evidence before him from Sumitomo itself or from PW confirming Mr Vigrass's views about what may be discerned from the translations, Lord Grabiner submits that Mr Vigrass was fully competent to assert that disclosure might betray the advice given by the lawyers (that is to say not only Ashursts in relation to the Ashursts translations but also PW in relation to the PW translations). He submits that the judge interpreted the ratio of Lyell v Kennedy too narrowly in that he excluded from the ambit of the exception to the general rule cases where there is a risk that disclosure may betray lawyers' lines of enquiry and areas of focus and concern. He submits that a claim to privilege on that basis would be covered by a proper application of the "trend of the advice" formulation adopted by Lord Bingham in Ventouris v Mountain.

  61. Lord Grabiner goes on to submit that CLR's submission (to which we make further reference below) to the effect that it is extremely improbable that every single one of the 725 translations carries a risk of betraying the trend of PW's advice is no more than speculation on CLR's part. In any event, he submits, the evidence of Mr Vigrass makes it clear that the speculation is unfounded.

  62. As to the two respects in which the judge concluded that Mr Vigrass had unwittingly overstated his clients' case, Mr Grabiner submits that the judge's conclusion was wrong in each case.

  63. Finally on this issue, Lord Grabiner submits that the judge's criticism of Mr Vigrass' affidavit for a lack of specificity (see paragraph 39 of his judgment) was misplaced, bearing in mind that his evidence was necessarily couched in cautious terms so as not to reveal the very matters for which protection was being claimed.

  64. Mr Briggs submits firstly that one never gets as far as Lyell v Kennedy, on the footing that there is a relevant distinction for Lyell v Kennedy purposes between on the one hand collecting or selecting a limited number of existing documents and on the other hand creating what are in substance wholly new documents. He submits that the Lyell v Kennedy exception covers only the latter process, whereas the translations in the instant case are the product of the former.

  65. Further, Mr Briggs submits that the judge was right to accept that in interpreting Lyell v Kennedy a distinction falls to be made between cases where disclosure and production of a selection of documents would or might betray the advice given by the solicitor to the client, and cases where the selection itself is the result of the exercise of the lawyer's skill and judgment. He submits that, as Bingham LJ made clear in Ventouris v Mountain when formulating the ratio of Lyell v Kennedy, only cases falling in the former category will attract legal professional privilege.

  66. Mr Briggs also prays in aid what he is bold enough to characterise (pace Lord Hoffmann) as considerations of common sense. He points out that in every case where solicitors are on the record as representing a party in civil litigation, the compiling of a list of documents in compliance with that party's disclosure obligations requires a process of selection which inevitably involves the exercise of legal and professional skill and judgment; and that that process of selection is thrown into considerably greater relief in the instant case by the requirement for "special disclosure" referred to earlier in this judgment, whereby disclosure is required of "train of enquiry" documents. On Sumitomo's argument, he submits, virtually all lists of documents would be covered by privilege on Lyell v Kennedy grounds, and the process of disclosure thereby effectively stultified.

  67. Mr Briggs accordingly submits that Sumitomo can only claim privilege on Lyell v Kennedy grounds to the extent that the disclosure and production of the translations in question would betray the trend of the advice which PW are giving or have given to Sumitomo.

  68. Mr Briggs goes on to submit that the judge was entitled to conclude that the evidence of Mr Vigrass had not satisfied him that disclosure of the translations would betray the trend of the advice of Sumitomo's lawyers. He submits, in particular, that it is pertinent that, as the judge observed in paragraph 31 of his judgment, neither Sumitomo nor PW had asserted a belief that such a risk existed in relation to the PW translations. Moreover, he points out that nowhere in the evidence of Mr Vigrass is there any assertion that the lawyers' advice to Sumitomo is at risk of being betrayed. Rather, the claim to privilege as made by Mr Vigrass is directed to the risk that disclosure might betray "the direction of their inquiries and their areas of focus and concern".

  69. As to Lord Grabiner's submission that the judge's acceptance of CLR's submission that it was extremely improbable that every single one of the translations carried a risk of betraying the trend of PW's advice to Sumitomo was mere speculation, Mr Briggs retorts that the fact that Mr Vigrass felt able to claim privilege in respect of every single one of the translations affords the clearest demonstration that he has misconceived the extent to which privilege can be claimed on Lyell v Kennedy grounds.

  70. Finally, Mr Briggs submits that the judge was right to conclude that Mr Vigrass had unwittingly overstated Sumitomo's case in the two respects which the judge identified.

  71. In addressing the selection issue, a distinction has in our judgment to be made between a selection made from unprivileged documents which are disclosable by the party claiming privilege ("own client documents"), and a selection made from documents which are not so disclosable ("third party documents").

  72. Lyell v Kennedy concerned a selection made from third party documents, and the judgments in that case must, in our judgment, be read in that context. Lyell v Kennedy is undoubtedly authority for the proposition that where a solicitor has copied or assembled a selection of third party documents the selection will be privileged if its production would "betray the trend of the advice which he is giving the client" (see Ventouris v Mountain at 479f per Bingham LJ); but in our judgment it is not authority for the proposition that a selection made from own client documents may similarly attract privilege.

  73. In Dubai Bank Ltd v Galadari (No 7), Morritt J rejected a submission that the Lyell v Kennedy principle could not apply to a selection made from own client documents, saying this (at p.110D):

    At one stage the plaintiffs submitted that [the Lyell v Kennedy principle] could not apply to copies made by a solicitor of his own client's pre-existing documents which were not themselves privileged, but it seems to me that, as the plaintiff's counsel ultimately accepted, there is no warrant for such a distinction. There is no authority to support it. As a matter of principle the selection of own client documents is just as likely to betray the trend of advice as a selection of third party documents, if not more so. And if I am right that the photocopies are discoverable there is every reason to uphold the application of the principle in respect of own client documents.

  74. The only other authority in point which was cited to us is Land Corporation of Canada v Puleston [1884] WN 1, a decision of Butt J. In that case the plaintiff company resisted production of extracts from a diary kept by the vice-president of the company which the company's solicitors had obtained after the commencement of the action, the original diary having been lost or mislaid some time earlier. The company claimed that the extracts were privileged as being extracts which had been specially selected to support its case in the litigation. Butt J ordered production of the extracts. He gave a short judgment, as follows:

    I held in The Palermo .... that where a party or his solicitor had obtained copies of documents from the Board of Trade for the purpose of his case, and the Board of Trade refused to produce the original documents, he was not bound to produce the copies; and the Court of Appeal affirmed that decision. But I am not inclined to extend that at all; and I shall, therefore, make the order in this case.

  75. As we read that judgment, Butt J rejected the company's claim for privilege on the ground that it was not appropriate to extend the application of his earlier decision in The Palermo to a selection made from own client documents. It seems to us, therefore, that Butt J's decisions in The Palermo and Land Corporation of Canada v Puleston reflect the very distinction to which we have referred. The latter decision is in conflict with the passage that we have quoted from the judgment of Morritt J. in the Dubai Bank case. This appeal raises the question of which is correct.

  76. We think that the question can be tested in this way. Imagine that a solicitor made a selection from his client's disclosable documents in order to obtain the advice of counsel on a point of particular concern. And imagine that the remainder of the disclosable documents were destroyed in a fire. We do not believe that it would be right to extend the principle in Lyell v Kennedy to cloak with privilege the remaining documents. What if the selection was effected by copying the original documents and then all the originals were destroyed by fire? Should the principle in Lyell v Kennedy be extended to cloak with privilege the copies which, as Morritt J. recognised, would otherwise be disclosable? We do not believe that it should. A gloss on the principle that a lawyer's advice is privileged from discovery should not result in the right of a party to refuse discovery of documentary evidence that was in the possession of that party before the selection was made, or copies or translations of such evidence.

  77. In our judgment, therefore, the Lyell v Kennedy principle does not and should not extend to copies or translations which represent the fruits of a selection made for litigious purposes from own client documents, and Dubai Bank Ltd v Galadari (No 7) was wrongly decided on this point.

  78. For those reasons, we conclude that the judge was right to resolve the selection issue in favour of CLR.

  79. In our judgment where a party resists production of a selection made from own client documents, it is a matter for the court's discretion whether to order production. The importance of the court's discretion in this respect was emphasised by Bingham LJ at the conclusion of his judgment in Ventouris v Mountain, as follows (at p.485e):

    I end on a point which may possibly give the defendant some comfort. [Counsel for the defendant] suggested that, the nature of the present case being what it is, there was a risk that production of those documents could lead to violence, intimidation, interference with witnesses and destruction of evidence. We are not, I must emphasise, in a position to assess the merit, if any, of these contentions. But his argument appeared to assume that there was no choice between a finding of legal professional privilege and an order for immediate disclosure and inspection. In my judgment, that is not so. The process of discovery is not an un controllable juggernaut .... In Science Research Council v Nasse (formerly Leyland Cars) v Vyas .... [1980] AC 1028 and Dolling-Baker v Merrett .... [1991] 1 WLR 1205, the Court of Appeal made plain that production and inspection are not automatic once relevance and the absence of entitlement to privilege are established. While the court's ultimate concern must always be to ensure the fair disposal of the cause or matter, it need not be unmindful of other legitimate concerns nor is it powerless to control the terms upon which production and inspection may be ordered. I would not wish it thought that because, as I conclude, production and inspection may be ordered therefore they must at once be ordered unconditionally.

  80. Bingham LJ's observations on the court's discretion were echoed by Parker LJ and Sir Michael Kerr.

  81. Finally, we think it appropriate to refer briefly to the strictures which the judge passed on the evidence of Mr Vigrass. For reasons given earlier, we have not found it necessary to investigate whether, and if so to what extent, Mr Vigrass may have overstated Sumitomo's case in relation to prejudice in the US proceedings. However, in fairness to Mr Vigrass we ought to make it clear that if it be the case that he overstated Sumitomo's case to any signficant degree (and as at present advised we are not persuaded that he did), we do not consider that he merited the degree of criticism of him which the judge made. In particular, we think that the judge's conclusion that CLR's evidence "cast grave doubt on whether Mr Vigrass gives a balanced impression of the position in the United States if disclosure were made by Sumitomo pursuant to an order of this court" is expressed in unnecessarily harsh terms. We feel sure that the judge was not intending to suggest that Mr Vigrass was seeking deliberately to exaggerate Sumitomo's case, but so that there can be no doubt about it we make it clear that we can see no basis whatever for such a suggestion.

  82. For the reasons given earlier, the appeal is dismissed.


Cases

Compagnie Financiere et Commerciale du Pacifique v Peruvian Guano Co (1882) LR 11 QBD 55, CA; Anderson v Bank of British Columbia (1876) 2 Ch D 644; Ventouris v Mountain [1991] 3 AER 472 CA; The Palermo (1883) 9 PD 6 and Watson v Cammell Laird & Co Ltd [1959] 1 WLR 702 CA; Lyell v Kennedy (No 3) (1884) 27 Ch D. 1 CA; Dubai Bank Ltd v Galadari [1990] Ch 98; Wheeler v Le Marchant (1881) 17 Ch D. 675 CA; Chadwick v Bowman (1886) 16 QBD 561; Land Corporation of Canada v Puleston [1884] WN 1

Representations

Lord Grabiner QC and Mr Orlando Gledhill for the Appellant (instructed by Messrs. Ashurst Morris Crisp)

Mr Michael Briggs QC and Mr Matthew Newick (solicitor) for the Respondent (instructed by Messrs. Clifford Chance)


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