The Court of Appeal has ruled that the State cannot rely on litigation privilege from concluded European Commission proceedings to resist Ryanair and Aer Lingus’s applications for discovery in separate litigation over an airport travel tax.
In a judgment delivered by Mr Justice Gerard Hogan on 22 June 2018, the court allowed the airlines’ appeals against a High Court decision that the privilege continued because the proceedings were closely related.
The dispute arose from a tax introduced under the Finance (No. 2) Act 2008. Short-distance flights were subject to a €2 per-passenger rate and longer-distance flights to a €10 rate. The European Commission investigated the tax, and proceedings followed concerning whether it amounted to unlawful State aid. In December 2016, the Court of Justice of the European Union ruled that the State was obliged to recover the difference between the two rates from Aer Lingus and Ryanair. The State had issued proceedings for that purpose.
Ryanair and Aer Lingus sought discovery of material generated by the State in its dealings with the Commission. The State parties objected on several grounds, including litigation privilege and public interest privilege. The public interest privilege issue had been stood over and was not decided in this appeal.
The Court of Appeal said litigation privilege protects a party’s preparation for litigation from premature disclosure. It held that the privilege is generally limited to the litigation for which the material was prepared and ends when that litigation concludes, unless the later proceedings are the same or closely related in the relevant sense.
Although the Commission proceedings and the airlines’ cases concerned the same travel tax and related issues, the court found they were not closely related litigation for this purpose. The parties were different, and there was no direct link between the concluded Commission proceedings and the current litigation. The airlines were not proxies for the Commission, and the outcome of their cases could not affect the concluded proceedings.
The court therefore held that the State could not rely on litigation privilege to oppose discovery of the documents sought. It expressed no view on whether legal professional privilege or public interest privilege might apply to some or all of the material. Those arguments, if pursued, were left for another day. The ruling did not itself order that the documents be disclosed.