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Must you disclose internal investigations to regulators?

31 July 2008

Following a serious accident or fatality in the workplace, an organisation will no doubt want to carry out an internal investigation to try and ascertain what the root causes of the incident were and prevent future accidents recurring.

The conclusion of an internal investigation will most likely highlight failings of the organisation of some sort. Any enthusiastic enforcement officer will be very keen to get their hands on the content of this investigation and has the power to order the organisation to hand over such information, providing it is not legally privileged.

Legal privilege is a form of protection which prevents the enforcement officer discovering the content of written or verbal instructions, advice or opinion between an organisation and its solicitor. There has previously been some uncertainty as to the extent that internal investigation reports, submitted to a client’s law firm, qualify for the status of legal privilege.

The recent decision in West London Pipeline and Storage and another v Total UK Ltd, a Queens Bench decision, has laid down further guidelines for this. This case relates to a civil claim but has important implications for both civil and criminal actions.

The decision established that only if the primary purpose of the report was to instruct the company’s solicitors would the document qualify for legal privilege.

The key principle in establishing whether the document was privileged or not seems to be whether it was prepared to meet an explicit statutory requirement or had been prepared for another purpose. In this case the relevant regulation was the Control of Major Accident Hazard Regulations 1999 (COMAH). The Claimant had alleged that there was a duty to report the findings of the investigation and, in fact, meeting that duty was the primary purpose of the report. If that had been the case then legal privilege could not be claimed. The Defendants however stated that the primary purpose of the report had been to give a complete account of the incident to their solicitors in order that they could fully prepare for any subsequent litigation.

The courts held that whilst there might be an implied duty to report under COMAH there is no explicit duty and the report could well attract legal privilege if the primary purpose of the report was to instruct the solicitor.

Clearly companies at risk of proceedings need to be fully aware of the key purpose of any reports regarding an investigation to ensure that they are protected by the principle of legal privilege. In order to successfully argue that a report attracts legal privilege, a company will need to prove that they contacted and instructed their solicitors at the earliest opportunity and the report was prepared on their advice.

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Hayley Saunders

Solicitor
T: 08700 86 3147
I: +44 (0)1604 54 3147
E: hayley.saunders@shoosmiths.co.uk