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Case law: Director in dispute who secretly recorded conversations with third parties had to disclose them to the other side

A managing director who secretly recorded conversations with two business people for the purpose of using them in a legal dispute against their former employer, has been ordered by the High Court to disclose the recordings to the former employer.

Legal Alert

This update was published in Legal Alert - February 2016

Legal Alert is a monthly checklist from Atom Content Marketing highlighting new and pending laws, regulations, codes of practice and rulings that could have an impact on your business.

The managing director of a company involved in a legal dispute with another business met with two former employees of that business. He told them the meeting was to discuss doing business with them in their new roles but his real purpose was to milk them for information about their former employer. He recorded their conversation secretly and made transcripts.

The other business found out about the recordings because they were mentioned in an email disclosed by mistake. It said the recordings and transcripts of the conversation should be disclosed to them by the company.

The company argued that the conversation was privileged, and the recordings/transcripts did not have to be disclosed, because they were created to gather evidence to support its legal claim – in the same way that the record of a solicitor's interview with a potential witness in a court case was privileged.

The High Court said that the test of whether the recordings and transcripts were protected was whether, looked at objectively, the 'dominant purpose' of the conversation being recorded was to conduct litigation. The test was an objective one, taking into account the circumstances, including evidence of the intentions of those involved in the conversations.

The Court ruled that as the two former employees did not know of the dispute, and thought they were at the meeting to discuss business opportunities, the dominant purpose test had not been met. The managing director's deception distinguished this situation from that of a solicitor taking a witness statement. The conversation was not therefore privileged and the recordings and transcripts should be disclosed.

Operative date

  • Now

Recommendations

  • Parties in a legal dispute gathering information from third parties to use against the other side should state expressly that they are doing so, for the dominant purpose of conducting litigation, or risk having to disclose that information to the other side

Case ref: Property Alliance Group Ltd v Royal Bank of Scotland Plc [2015] EWHC 3341

Please note: An article published in the December 2015 edition of Legal Alert covered this case at an earlier stage in the legal process.

Disclaimer: This article from Atom Content Marketing is for general guidance only, for businesses in the United Kingdom governed by the laws of England. Atom Content Marketing, expert contributors and ICAEW (as distributor) disclaim all liability for any errors or omissions.

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