Liability insurance and joint retainer privilege

Donald Dinnie, Norton Rose Fulbright

This judgement considered the interesting question of legal professional privilege, the rights of successors in title, and joint retainer privilege.

The insured and the insurer jointly engaged attorneys to act on their behalf in relation to various claims relating to cosmetic surgery and the use of silicone breast implants.  The attorneys were appointed to act both in respect of the claims covered by the insurance and those not covered by the insurance.

Ultimately a number of claimants obtained summary judgment against the insured for which they were not indemnified by the insurer.  The administrator as successor in title to the insured (now in liquidation) sought to claim against their attorneys arising out of and concerning the conduct of the defence in the group litigation.

The administrator sought disclosure of the joint retainer files from those attorneys to which the insurer objected pleading joint retainer privilege.

Both the lower and appeal courts ordered disclosure.

The relevant legal principles are:

• In respect of privileged documents a successor in title stands in the shoes of their predecessor.  If their predecessor in title is entitled to the disclosure of privileged documents so is the successor in title.
• The right of the successor in title to disclosure of those documents is not a matter of the terms of a particular assignment or deed.  It is a right that passes as a matter of law.
• The scope of the rights of a successor in title will always depend on precisely what it was that has been passed on or assigned to it. So if an attorney was jointly retained to deal with the an IP claim and a fatal accident claim then the successor in title as an assignee of claims consequential upon the IP claim only, is not entitled to see the privileged documents relating to the fatal accident claim.
• Legal professional privilege is a fundamental right of each party who has jointly retained the attorneys in question. There is no authority to suggest that one party’s right to claim joint retainer privilege might override the rights of the other party who jointly retained the attorneys.  One such party cannot assert privilege against the other in respect of documents created pursuant to the joint retainer. As against third parties, both parties can maintain a claim for privilege in respect of any such document.
• As the privilege is joint it can only be waived jointly and not unilaterally.

In South African law the position is likely to be no different.

In South Africa it arises where there is underinsurance that both the insured and insurer may appoint the same attorney to proceed with a recovery action for their respective rights and interests.  The joint retainer privilege applies to that appointment and relationship.

Travelers Insurance Co Ltd v Armstrong and Another [2021] EWCA Civ 978

First published by: Financial Institutions Legal Snapshot