When do witness statements lose their privilege?

In Defender Ltd v HSBC Institutional Trust Services (Ireland) Ltd [2018] IEHC 587, High Court, Twomey J, 15 October 2018 the Court had to consider whether a witness statement loses its privilege when it is served on the opposing party or when it is adopted by a witness in open court.

Background

The plaintiff, Defender, sought copies of witness statements delivered in two sets of proceedings to which it was not a party. The case against HSBC was for negligence and breach of contract in its role as custodian of funds on Defender's behalf. The first set of proceedings, the Thema proceedings, took place in Ireland and settled after seventeen days at hearing. The second set of proceedings, the Primeo proceedings, were heard by the Cayman Island High Court which gave judgment in 2017.

Decision

Unsurprisingly, the Court held that the statements adopted by witnesses in giving evidence in the Cayman Island High Court in the Primeo proceedings had lost their privilege.

The Court then considered whether witness statements which had been served in the Thema proceedings but had not been opened in Court had retained their privilege.

Before considering the privilege point, the Court considered whether the statements were relevant and necessary. It held that they were, noting that in related  proceedings in the Cayman Islands similar witness statements had been used to test the credibility of witnesses.

The Court then went on to consider whether service of a witness statement on the other party leads to a loss of privilege. The Court found that service did not mean that the statement was in the public arena. It referred to the decision in Moorview v First Active [2009] IEHC 214 where Clarke J held that a witness statement was not put into the public arena when it was served and it had no evidential value until adopted by a witness in court. The Court noted that one of the policy reasons for holding that witness statements are privileged until they are put into the public arena was to incentivise the settlement of proceedings where parties did not wish to have the particulars of the dispute aired publicly. Accordingly, the Court held that a witness statement did not lose its privileged status when served but only when it is adopted by the witness in court or otherwise put into the public arena.

The Court then had to consider whether the privilege in the witness statements had expired when the proceedings concluded. It noted the general rule that litigation privilege is lost when proceedings are concluded unless they are closely connected to the proceedings in which the documents are sought. The Court was of the view that there was a close connection between the proceedings in that the parties were connected, particularly the same defendant in the Thema case as in the present case. It also held that there was a close connection in the subject matter of the proceedings as they all involved claims by funds against a HSBC company alleging negligence in relation to its alleged use of a Bernie Madoff company as a sub-custodian for the assets of the funds.

In those circumstances, the Court held that the witness statements in the Thema case had not lost their privilege – although it did make an exception for one statement which although not adopted by a witness in court was opened and summarised in court.

For further information, contact Paula Mullooly, Knowledge Lawyer or any member of the Litigation & Dispute Resolution team at A&L Goodbody.

Date published: 21 November 2018