John Delaney ruling clarifies how legal professional privilege applies in Irish CEA investigations

Dublin-based Zara West of Pinsent Masons was commenting after the Court of Appeal in Ireland decided on a claim of legal professional privilege by former Football Association of Ireland (FAI) chief executive John Delaney in the context of an investigation the CEA is running.

In February 2020, the CEA seized documents at the premises of the FAI as part of a criminal investigation. The Court of Appeal decision arose from an appeal against the High Court’s rejection of Delaney’s claim of legal professional privilege over more than 1,000 of those documents.

West said that the decision contains important lessons on legal professional privilege and disclosure in the context of CEA investigations: “The Companies Act 2014 provides a unique statutory procedure for a court to determine whether legal professional privilege applies to documents seized by the CEA. This judgment is a reminder that the burden of proof remains on the party asserting legal professional privilege and that the court expects that party to provide sufficient information to satisfy the burden. Any person or body involved in a CEA investigation should bear this in mind when engaging with the statutory procedure and endeavour to provide as much evidence as possible to support a claim of privilege.”

Under the Companies Act 2014 (the Act), the CEA can obtain a search warrant where it has reasonable grounds for believing there is information material to an offence under the Act on the premises. Where there is a concern that documents seized on the basis of that warrant are subject to legal professional privilege, the Act provides that the court must determine whether the documents are privileged.

In Ireland, the courts recognise two types of legal professional privilege. First, litigation privilege, which applies to confidential documents created for the dominant purpose of actual or reasonably apprehended litigation; and second, legal advice privilege, which applies to confidential communications between a lawyer and their client for the purpose of providing legal advice. The party asserting legal professional privilege must prove to the court that the documents were created for one of these two purposes.

The CEA seized 285,000 files from the FAI on the basis of a search warrant, including a digital work email folder created by Delaney. The CEA subsequently applied to the High Court for a determination on whether legal professional privilege attached to the material. The High Court approved an examination strategy, under which Delaney identified 29,500 potentially privileged documents.

The High Court then exercised its discretion under the Act to appoint independent legal experts – assessors – to prepare a report to assist it in determining whether the documents were in fact privileged. Delaney provided a “context letter” to the assessors to explain why he asserted privilege over the documents. The assessors’ report upheld legal professional privilege in respect of 1,120 documents.

The High Court subsequently made a disclosure order requiring Delaney to review the 1,120 documents and to clarify why he claimed legal professional privilege over each document.

The disclosure order required Delaney to, in the case of a claim of litigation privilege, firstly identify the litigation and secondly confirm whether the litigation had concluded. The order further required Delaney to clarify how communications retained legal professional privilege where third parties were copied and/or they did not include a lawyer as sender or recipient. Delaney also had to clarify whether privilege was asserted in his personal capacity or otherwise.

In response, Delaney provided the High Court with a written statement setting out clarifications on each document. The High Court was not satisfied with Delaney’s clarifications and determined that he had failed to discharge the burden of proof required for a successful claim of legal professional privilege. The High Court directed disclosure of all the documents to the CEA.

However, Delaney appealed the ruling of the High Court. He argued the court had disregarded the assessors’ report without giving any reasons; and only examined an unidentified sample of documents and failed to examine each of the documents individually.

As part of the appeal, Delaney provided a sample schedule of the information he provided to establish legal professional privilege over 10 of the documents. Delaney claimed that this schedule demonstrated that the High Court had sufficient information to conclude whether the documents were privileged.

The Court of Appeal found that in each of the 10 cases, Delaney failed to comply with the disclosure order. This included situations where Delaney identified proceedings as “family law” or “family/shareholder dispute/defamation”, without providing any details of the parties to the case, record number or status. Several of the documents were communications which did not include a lawyer as sender or recipient and Delaney gave no explanation of how the communication was for the purposes of legal advice.

The Court of Appeal rejected the claim that it was under an obligation to consider each document individually, finding that there was a “clear failure by Delaney to provide any meaningful context for virtually all of the documents in respect of which he claims privilege”. While the Court of Appeal considered it unsatisfactory that the High Court had not given specific reasons for rejecting the assessors’ report, it inferred that the reasons were clear from the High Court’s disclosure order. In the view of the Court of Appeal, the disclosure order was based on the CEA’s objections to the assessors’ report and reset the threshold Delaney was required to meet to assert legal professional privilege.

The Court of Appeal dismissed Delaney’s appeal. It said: “It is very difficult… to avoid the conclusion that Mr. Delaney’s manifest failure to comply with the [disclosure] order of the court is not due to circumstances beyond his control but is rather a deliberate attempt to shield documents from disclosure which he does not wish to disclose.”