Emails and confidentiality

Let’s say you are a successful small business and you get taken over by a much larger one. As part of the deal, you transfer all the email accounts of all your employees to the buyer’s systems for the practical purposes of keeping the business going. And then there’s a dispute and the buyer starts to dig around in those email accounts and finds evidence supporting its claims. Is the buyer entitled to use those emails in litigation?

In ConocoPhillips Co v Chrysaor E&P Ltd the High Court found that the seller could still claim privilege over those emails, even though wholesale access had been given.

It was accepted by both parties that confidentiality could be reserved impliedly as well as expressly and the question to be considered was whether it had been lost in the context of the particular facts.

Giving access to the emails wasn’t just for any purpose or for use in litigaton. It was to keep the business going. So confidentiality in those emails was preserved.

The decision resulted from a late application for disclosure of certain documents (emails). The lateness of the application was clearly an issue for the judge, given that the party who wanted to rely on the emails had known about them for over a year.

The case, of which this application was a tiny part, concerned the rectification of a contract between the parties relating to the sale of the companies in the North Sea oil industry. The full trial was due to begin several weeks after the application was being heard and there had been some correspondence between the parties at least a year before.

The court clearly felt that the application was made too late and should have been addressed earlier in the proceedings and the claimant was unable to rely on those emails which remained privileged.

It wasn’t clear whether the position might have been different if it had been raised formally before the court at a much earlier stage in the proceedings. The Judge made the point that the defendant had not raised the issue at either the disclosure review or the case management conference and concluded that with the trial so close, granting the application would disrupt preparation.

Note: I came across this case listening to an excellent Herbert Smith Freehills podcast. The resources of big firms clearly outweigh those of smaller firms, but small firms still need to know this stuff. But it isn’t easy. I assumed the judgment would be on Bailii, an excellent internet resource. But it wasn’t. A reminder that the internet still doesn’t provide either lawyers (or for that matter citizens) with all the information they might need.

In the end, I was guided to the judgment by a very nice librarian at the Law Society Library in Chancery Lane to which I am privileged to have access. It’s reported at [2021] 3 WLUK 524 as Herbert Smith Freehills mentioned. Maybe I am a bit out of date, but I assumed that was some Weekly Law Report reference when in fact it is WestLaw UK.

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