Background
Saudi corporations brought a multibillion-dollar civil action alleging that former Saudi official Saad Khalid Al Jabri orchestrated an international fraud and diverted their funds to himself and others, including his son Mohammed. The defendants denied wrongdoing and said the disputed funds were used for state-sanctioned counterterrorism activities. The allegations have not been tried.
Al Jabri and Mohammed were subject to Mareva orders restricting dealings with their assets. Seeking to trace funds before and after those orders, the plaintiffs requested trust ledgers from any law firm that had represented them worldwide since 2017 and unredacted foreign bank statements. The motion judge largely upheld the defendants’ privilege claims. The Divisional Court agreed that the trust ledgers were presumptively privileged, but held that the same presumption did not apply to client bank statements and remitted privilege over the redacted entries for determination.
The Court’s Holding
The Court of Appeal dismissed the plaintiffs’ fresh-evidence motion and their appeal. Lawyers’ trust ledgers are presumptively protected by solicitor-client privilege because even apparently neutral accounting information may reveal, or permit deductions about, confidential communications. That presumption applies in contested civil proceedings as well as searches or compulsory seizures. The plaintiffs’ unsupported allegation that lawyers may have acted merely as conduits for funds did not rebut it.
The court clarified that the crime-fraud exception turns on the nature and purpose of the communication, not whether disclosure is sought in a civil or criminal proceeding. Communications intended to further fraud within criminal law’s broad meaning, or to facilitate contemptuous breach of a court order, can fall outside privilege. Here, however, the plaintiffs failed to establish a prima facie case connecting any communications to future fraud or breaches of the Mareva orders. The court also upheld the remittal concerning bank-statement entries because, although they carry no presumption of privilege, their content could potentially reveal privileged information.
Key Takeaways
- Lawyers’ trust ledgers are rebuttably presumed privileged regardless of the procedural setting in which production is sought.
- The crime-fraud exception may apply in civil litigation, including to communications intended to facilitate fraud or contemptuous breach of a court order, but strict evidentiary preconditions apply.
- Client bank statements are not presumptively privileged, although particular entries may be protected if their content would reveal confidential lawyer-client communications.
Why It Matters
The decision preserves strong protection for law-firm accounting records while correcting the view that the crime-fraud exception is categorically unavailable in civil fraud or Mareva-enforcement proceedings. Parties seeking disclosure must provide prima facie evidence tying identifiable communications or records to intended future wrongdoing; broad requests and suspicions that disclosure might uncover such evidence are insufficient.