The High Court has ruled that legal professional privilege remained attached to documents Lexington Services Limited accidentally disclosed during discovery in a dispute over a US patent, and said Anthology S.A. and Brian Connell breached an implied undertaking to the court by sharing discovered material with third parties.
Ms Justice Butler’s judgment concerns Lexington’s application for orders about documents placed on a USB stick provided for inspection. The stick contained documents over which privilege had already been claimed, as well as additional material outside the agreed discovery categories. The court found the disclosure was a mistake and that the receiving solicitors recognised that it was likely an error. Lexington’s actions in retrieving the original stick and providing a replacement containing only the listed, non-privileged documents amounted to maintaining its privilege claim and withdrawing the extra material, the judge held.
The counterclaim defendants argued that privilege had been waived, that Lexington had acted too late to reclaim it, and that an exception should apply because of alleged fraud or other misconduct. The court rejected those arguments. It found Lexington had asserted privilege in correspondence after learning that Connell had retained copies, and that the delay in bringing its motion did not bar equitable relief. The materials before the court did not establish a plausible or viable case of fraud or dishonesty sufficient to invoke the crime-fraud exception. The judgment did not determine the underlying dispute about whether Lexington attempted to fax an annual revenue report by the contractual deadline or whether the patent security had become enforceable.
The judgment also records that four emails included in Lexington’s original discovery affidavit were admitted to have been false or modified. An employee of the Flannery family said she had falsified them to create “better records”; Mr Flannery said he learned of this after swearing the affidavit and later acknowledged that he was wrong not to alert the court promptly. The judge made no finding that Lexington was directly involved in the falsification.
Connell and Anthology accepted at the hearing that they had breached the implied undertaking by providing discovered documents to third parties for use in litigation in Malta. The court said the breach amounted technically to contempt of court and that costs consequences would follow. It granted the relief sought by Lexington, but said it would hear the parties further on the orders to be made. The judgment therefore records the decision to grant relief; it does not set out the final form of those orders.