High Court finds iniquity exception to privilege applied, but not on a blanket basis

The High Court has held that the iniquity exception to privilege applied in respect of certain aspects of a transaction, so that no privilege attached to various categories of documents over which the defendants had asserted privilege. It did not, however, follow that none of the defendants' documents relating to the transaction were privileged: Foundation Stimm v King & Spalding International LLP and Anor [2025] EWHC 1067 (Ch).

The iniquity exception provides that legal professional privilege will not apply to documents or communications that are made as part of, or in furtherance of, a fraud, crime or other iniquity. Successful applications for disclosure of documents over which privilege has been asserted on the basis of the iniquity exception are relatively rare. However, the exception will apply if there is sufficient evidence that there has been an iniquity, and that it involves an abuse of the lawyer/client relationship – such as where lawyers are used to provide authenticity and regularity to the iniquitous behaviour.

However, even where multiple iniquities have been established in relation to a transaction, it does not follow that none of the documents connected with the transaction are privileged. This decision higlights that documents must still be reviewed to determine whether they involved an abuse of the lawyer/client relationship. That may not be the case, for example, if the client was seeking advice in relation to the lawfulness or otherwise of the proposed iniquitous conduct (as opposed to seeking advice that would assist the client in committing the iniquity). Similarly, privilege would apply to any communications about matters which were not tainted by the iniquity.  

For more information, see this post on our Civil Fraud and Asset Tracing Notes blog.