High Court Finds Company Could Not Assert Privilege Against Former Director Over Legal Advice She Had Seen At The Time

In a dispute between a company and its former director regarding repayment of a loan, the High Court has held that the company could not withhold its privileged legal advice that the director had seen, in that capacity, at the time it was obtained: The Serendipity Centre Ltd v Tinson [2026] EWHC 349 (Ch).

The decision is a reminder that privilege may be lost between certain parties, on the basis that the material in question is not confidential between them, even though privilege can be maintained against the rest of the world. The extent to which a lack of confidentiality between two parties necessarily negates privilege between them is not, however, straightforward. 

The judgment in this case contains a broad statement that there can be no privilege in legal advice as against a party who is already lawfully aware of its contents. In other cases, however, the courts have held that privilege could be maintained against an opponent who had previously (and lawfully) obtained the material in question. Examples include: 

• where the privilege holder had provided the documents to the opponent for a separate purpose long before the dispute had arisen (see Berezovsky v Hine [2011] EWCA Civ 1089 considered here);
• where the opponent had obtained the documents from a third party pursuant to subpoenas in a foreign jurisdiction (see Suppipat v Siam Commercial Bank Public Company Ltd  [2022] EWHC 381 (Comm) considered here); and 
• where the opponent was the firm of solicitors who had previously acted for the privilege holder and received the materials in that capacity (see Candey Ltd v Bosheh [2022] EWCA Civ 1103 considered here).

The position therefore appears to be more nuanced than the judgment in this case suggests, regardless of whether or not the result is correct on its facts.

The decision is also of interest for the court's interpretation of an order requiring disclosure of the claimant's former solicitor's "full file" relating to a loan agreement. In circumstances where there was no separate file relating only to the loan agreement, the court held that the order should be interpreted as requiring disclosure of the full file, including those parts of it that did not relate to the loan agreement. In other words, documents could not be withheld because they were irrelevant. 

This highlights the need to consider the wording of any disclosure order carefully to ensure that there is no ambiguity, and where appropriate (as it ordinarily will be) to ensure that any irrelevant documents can be withheld. 

Background

The claimant company operates residential children's homes. The defendant was its founder and sole director, and also an employee and shareholder. She was later dismissed as an employee and resigned as a director, but she remains a shareholder.

Various disputes arose including the present proceedings, in which the claimant seeks recovery of the balance of a director's loan alleged to be owed by the defendant. The defendant obtained an order from HHJ Glen that the claimant must obtain from its former solicitors (WBD) the "full file… relating to the loan agreement the subject of this claim" and disclose it to the defendant, identifying any documents withheld on grounds of privilege.

Before supplying the file to the claimant's solicitors, WBD removed documents that it considered belonged to the firm, namely: (i) internal WBD communications; (ii) draft documents and working papers; (iii) accounting records; (iv) internal file management records; and (v) documents “which relate to other clients”. 

The claimant's solicitors then removed documents they said were privileged, as well as those that were irrelevant to the claim because they did not relate to the loan agreement, and disclosed the remainder to the defendant.

The defendant objected on grounds that the claimant: (i) was not entitled to withhold documents on grounds of relevance; (ii) had misapplied the privilege exception; and (iii) had failed to obtain the full file from WBD. 

Decision

The High Court (HHJ Paul Matthews sitting as a High Court judge) held that the claimant must produce the remainder of the documents supplied by WBD, without withholding any of them on grounds of relevance or privilege. It must also ask WBD for more details of the documents they had not supplied to the claimant's solicitors on the basis that they "relate to other clients".

1. Relevance

HHJ Matthews noted that the order was not for standard disclosure under CPR 31.16 (ie the documents which support or adversely affect any party's case) but for specific disclosure under CPR 31.12. The width of the disclosure order therefore had to be judged by reference to the words actually used in the order. 

The order was ambiguous because WBD did not maintain a single file which related solely to the loan agreement: it maintained a file relating to the restructuring of the company, which included advice about the loan agreement. 

The judge held that, on its proper construction, the order required disclosure of the full file relating even in part to the loan agreement. He rejected the alternative constructions, namely that the order required disclosure only if there was a file relating exclusively to the loan agreement or that it required disclosure of only that part of the file relating to the loan agreement. The former would mean no disclosure was required, which did not appear to be HHJ Glen's intention, and the latter would be inconsistent with the reference to the "full file" and the recital in a later order by HHJ Glen that the earlier order was "not conditioned by relevance".

Accordingly, the claimant was not entitled to withhold any of the documents supplied by WBD on grounds of relevance.

2. Privilege

HHJ Matthews held that the claimant could not assert privilege against the defendant in respect of the documents in the file because they were not confidential as against her – regardless of whether they remained confidential against the rest of the world.

He referred to Simpkin v The Berkeley Group Holdings PLC  [2017] EWHC 1472 (QB) (considered here) in which a former director and employee of a company sought to assert privilege in electronic files (not password protected) which he had stored on the defendant's server and sent by email from his work computer to a private email mailbox. The court in that case held that the employee could not assert privilege against the company because the files were not confidential as against the company.

In the present case, HHJ Matthews stated:

"In my judgment, there can be no privilege to withhold a document from another party on the grounds that it communicates confidential legal advice from the solicitor to the client, if that other party is already (lawfully) aware of the contents of that document."

Here, at the time the advice was obtained, the defendant was the sole director of the claimant, and she both gave the instructions and received the advice. Although she held that advice for the benefit of the claimant and could not properly make use of it for her own private purposes, she knew what it was. As a result, the claimant was not entitled to claim privilege, as against her, in respect of that advice.

The fact that the defendant was a shareholder in the claimant would not have prevented the claimant asserting privilege, as a result of the Privy Council's decision in Jardine Strategic Ltd v Oasis Investments II Master Fund Ltd (No 2) [2025] UKPC 34 (considered here). But that did not make any difference to the result, given the judge's other findings.

3. WBD's file

HHJ Matthews noted that the court's order was addressed to the claimant, not WBD, and so could not require WBD to do any more than the general law required – which was to deliver up their former client's property on demand, but not their own property.

In separating out documents they considered to belong to themselves, WBD were following Law Society guidance set out in a Practice Note date 26 July 2022, which was itself based on judicial decisions. The judge agreed that, according to those authorities, the first four categories WBD had withheld (internal communications, draft documents and working papers, accounting records and internal file management records) appeared to be categories that would belong to the solicitors rather than their client. 

However, the judge considered the fifth category (documents "which relate to other clients") to be less clear, as a document could relate to more than one client (for example, if a firm acted for both sides in a conveyancing transaction, with their consent) but belong to only one. He directed the claimant to ask WBD for more details and provide the answer to the defendant, so that she could consider whether to restore her application in respect of that category.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.