England and Wales High Court (Technology and Construction Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		14/02/2007

The Hon Mr Justice Ramsey :

Introduction

1. In these proceedings Atos Consulting Limited ("Atos") claims sums from Avis Europe PLC ("Avis") arising out of the performance and termination of an agreement under which Atos provided services to Avis in relation to a project for the reform of Avis' Financial Systems and Procedures("FSP Project")
2. In turn, Avis counterclaims for damages for breach of contract and misrepresentation in relation to that agreement, the Master Services Agreement ("MSA"), entered into on 19 December 2003.
3. The matter is proceeding to a substantial trial commencing in March 2007. At the pre-trial review both parties made applications for further disclosure. Among other issues, both applications raise the question of the proper approach to be taken when documents are redacted and a party seeks to challenge the redactions made on grounds of either privilege or relevance. I shall deal with that issue first.

The Application by Atos

4. Atos applied for specific disclosure by an application dated 6 February 2007. It sought various documents including "un-redacted copies of all Avis Board Meeting minutes and papers" which had previously been disclosed in a redacted form on the basis that the redacted parts were not relevant.
5. That application was supported by the fourth witness statement of Ms. Mulley of Nabarro Nathanson, Atos' solicitors, in which she refers to correspondence where Avis' solicitors, Olswang, stated in a letter dated 31 January 2007:

"In response to your paragraph 1.25, the sections of board minutes and papers which have been redacted on the grounds of irrelevance relate to Avis's activities other than in relation to the FSP Project and ITFS. For example, information and comment on Avis' turnover and profit margins. However, where paragraphs in these sections to relate to the FSP Project or ITFS they were not redacted."

6. In her fourth witness statement Ms Mulley initially states that irrelevance is not a ground for making redactions by blanking out passages. She also refers to special provisions which were agreed by the parties to deal with confidential documents and says that these minutes could be dealt with in that way. She says at paragraph 34 of her witness statement:

"The minutes are of great intrinsic importance to a very important issue in this case. Beyond that however it will be noted that the redactions are made even in paragraphs of the minutes headed "Financial Systems & Processes Project" and in one case in the middle of that paragraph (see H18/35) at paragraph 7.3."

7. In response, Mr Steven Baker of Olswang served a fifth witness statement on behalf of Avis in which he said that the special provisions to deal with confidential documents were agreed for confidential, relevant documents, not irrelevant material.
8. He says that the relevant request, Request 23, originally related to only one set of minutes, that of the meeting of the Board of Directors held on 26 February 2003 and that no request was made for the other minutes or papers before the present application.
9. At paragraphs 22 to 24 he deals with the redactions in these terms:

"The redactions of Avis' board documents were undertaken at my direction and all sections of the minutes and papers for Avis' board of directors' discussions which have been redacted are (1) confidential records of Avis' board of director's discussions in matters unrelated to this dispute which are by their very nature confidential and contain information which could be price sensitive, confidential as far as Avis employees (including potentially witnesses in this case) are concerned, of use to competitors or potentially damaging if revealed and (2) irrelevant to the issues in dispute. The redactions, and the basis for the redactions, was explained in Avis' List of Documents.

By way of example, the redacted sections of the 26 February 2003 board meeting to which Atos' application related are headed as follows and contain no reference to the FSP Project, ITFS or related matters:

2 2002 Financial Statements

3 Trading Results

4 Investor Relations Report

5 Treasury Report

6 Project Zodiac Update

8 Approvals Required

9 Approvals given

Page 10 of this minute contains a redaction in the "Overview" section regarding the FSP Project. The deleted sentence noted that there would be additional capital expenditure on unrelated confidential matters."

The Application by Avis

10. Avis applied on 5 February 2007 for an Order that

"The Court decide pursuant to CPR 31.19(5) whether some or all of the Claimant's claims of privilege in respect of the Challenged Documents (listed in the Schedule to the draft Order) should be upheld ."

11. The Challenged Documents consist of redacted sections of drafts of a report produced by Atos in October 2004 which dealt with progress of the FSP Project ("the FSP Report") and 10 emails disclosed by Oracle Corporation UK Limited ("the 10 emails").
12. Mr Baker sets out in his fourth witness statement the background to the application. In relation to the 10 emails he says that they were disclosed by Oracle which now owns PeopleSoft, Atos' subcontractor in the FSP Project. They were disclosed pursuant to an agreement made in November 2006 between Oracle, Avis and Atos under which Atos had a right to inspect documents before inspection was given to Avis so as to allow Atos to identify those documents in respect of which it claimed "common interest privilege"."
13. On 19 January 2007 Nabarro Nathanson wrote to Olswang stating that for certain documents the privilege claimed was "litigation privilege and common interest privilege". Olswang responded on the same day seeking the identity of the 15 documents in respect of which privilege was claimed and seeking the factual basis of the grounds giving rise to the claim for privilege.
14. On 22 January 2007 I ordered that Atos should write setting out the grounds for the privilege claimed. On 26 January 2007 Nabarro Nathanson wrote in these terms in respect of the 15 emails:

"We have taken advice from counsel in respect of the documents in which Atos claimed common interest privilege. In order to save further correspondence, Atos has decided to waive privilege in these five documents….

Litigation privilege:

Litigation privilege is claimed in the remaining ten documents. The dominant purpose of the authors of these documents was to assist with the preparation of Atos' case (that is the subject of these proceedings)."

15. Mr Baker stated in his fourth witness statement that in respect of five emails which had been disclosed:

"I have reviewed these documents and I do not believe that there was any basis on which Atos could rightly claim any form of privilege in the documents. The fact that someone at Nabarros believed Atos was ever entitled to claim privilege in these documents suggests that their approach to questions of privilege is flawed".

16. In relation to the remaining 10 emails he said:

"The Challenged Emails are dated between 18 and 25 November 2004 (after the FSP Project had ended but before proceedings were issued) and all are emails between PeopleSoft personnel only. None of the emails were sent by or to or copied to Atos personnel. Oracle/PeopleSoft is not a party to these proceedings. The authors of the Disputed Emails are Martyn Hardy, Ivo Lasan, Steve Gallagher, Anne van der Hagen and Gary Fitchett, none of whom is giving evidence in these proceedings.

Oracle itself has not claimed privilege in any of the Disputed Emails. It is of note that, whilst nine of the disputed emails mention "Avis", one is headed "How's India?" and even by its description would not appear to be privileged."

17. Mr Baker said that, in these circumstances, he considered it inherently unlikely that the 10 emails were produced for the sole or main purpose of this litigation.
18. In her fifth witness statement Ms Mulley responded as follows:

"The letter dated 26 January 2007 was simply in error in stating that privilege was being waived in the five documents. The documents had been identified as not privileged. I fail to understand Mr Baker's comment as to the title of one of the emails indicating the content of the document as not privileged. He does not suggest that the heading "How's India?" could possibly be relevant.

I have read and considered the content of every email in which privilege is claimed and have consulted Counsel on the matter (who have also read and considered the content). I am fully satisfied that the claim for privilege in these documents is correct."

19. In respect of the FSP Reports, Mr Baker says in his fourth witness statement in support of the application that:

"The Report was prepared towards the end of the FSP Project following Avis' request that Atos review the status of the FSP Project and report on this and what had caused the delays which had arisen. Atos did not disclose any drafts of the Report or any documents (such as emails) which relate to the drafting of the report in its standard disclosure despite their obvious relevance to the issues in dispute."

20. On 13 December 2006 Avis requested disclosure of all drafts of the Report and confirmation that all documents (including emails, correspondence, notes of interviews etc.) in connection with the drafting of the Report had been disclosed. Atos responded on 22 January 2007 and disclosed the five draft versions of the report. In the covering letter it was stated that the documents were "redacted for privilege".
21. Again this was subject to the same order on 22 January 2007 that Atos should write setting out the grounds for the privilege claimed. On 26 January Nabarro Nathanson wrote and stated:

"In respect of the redacted versions of the "Report on the Progress of the FSP Programme" provided to you on 22 January 2007, Atos claims legal advice privilege in the redacted text. The redacted material was the subject of legal advice."

22. Olswang wrote on 29 January 2007 to question the allegation of privilege and asked again for the factual basis for the claim for legal professional privilege to be identified.
23. Mr Baker says in his fourth witness statement that the drafts of the report were produced by Andy Cole, Kent Julius, Michael Bell, John Emberton and Martin Riley, none of whom are lawyers and of whom only Andy Cole has made a witness statement on behalf of Atos. He sets out the introduction to version 0.1 of the draft report as follows:

"The purpose of this document is to respond to concerns Avis have raised about the status of the FSP Programme and the quality of work delivered by [Atos] and PeopleSoft in the FSP Programme.

Based on the conclusions made in this document we will make Recommendations on what actions need to be taken by Avis, PeopleSoft and Atos to give a level of comfort and trust that both the Expenses and Revenue streams will be deployable.

It is the aim of this document to give Avis the information needed to confirm to their next Board meeting (October 19) that they will proceed with the Expenses go-live in Germany November 1, or otherwise."

24. He says that the final version of the report was addressed to Avis and was provided to Avis without redactions.
25. He concludes:

"I do not believe that Atos' claims of privilege in respect of the drafts of the Report can be maintained because the Report was not drafted by or for lawyers, purports on its face to always have been intended for disclosure to Avis and because Atos has not identified any proper ground on which privilege is claimed."

26. In her fifth statement Ms. Mulley responds to this and at paragraph 8 states:

"…the redacted passages of the Reports contain legal advice reviewed, amended, approved and given by James Loughrey (Atos' Head of their UK Legal Department) in his capacity as legal advisor to Atos"

The Law

27. The Application by Avis is expressly based on CPR rule 31.19 and Atos' application has been argued on that basis. It is therefore necessary to consider the approach of the court in respect of such applications.
28. The relevant parts of Rule 31.19 are as follows

"(3) A person who wishes to claim that he has a right or a duty to withhold inspection of a document, or part of a document, must state in writing –

(a) that he has such a right or duty; and

(b) the grounds on which he claims that right or duty.

(4) The statement referred to in paragraph (3) must be made –

(a) in the list in which the document is disclosed; or

(b) if there is no list, to the person wishing to inspect the document.

(5) A party may apply to the court to decide whether a claim made under paragraph (3) should be upheld.

(6) For the purpose of deciding an application under …paragraph (3) (claim to withhold inspection) the court may –

(a) require the person seeking to withhold disclosure or inspection of a document to produce that document to the court; and

(b) invite any person, whether or not a party, to make representations

(7) An application under paragraph …(5) must be supported by evidence."




29. In relation to redaction I was referred to the decision of the Court of Appeal in GE Capital Corporate Finance Group Ltd. V. Bankers Trust Co [1995] 1 WLR 172 where a plaintiff had redacted documents blanking out passages which it considered to be irrelevant.
30. At 174 Hoffman LJ (as he then was) said :

"It has long been the practice that a party is entitled to seal up or cover parts of a document which he claims to be irrelevant.. Bray's Digest of the Law of Discovery, 2^nd ed.(1910), pp. 55-56 puts the matter succinctly:

Generally speaking, any part of a document may be sealed up or otherwise concealed under the same conditions as a whole document may be withheld from production; the party's oath for this purpose is as vali in the one as in the other. The practice is either to schedule to the affidavit of documents those parts only which are relevant, or to schedule the whole document and to seal up those parts which are sworn to be irrelevant;…"

31. He continued:

"The oath of the party giving discovery is conclusive, "unless the court can be satisfied-not on a conflict of affidavits, but either from the documents produced or from anything in the affidavit made by the defendant, or by any admission by him in the pleadings, or necessarily from the circumstances of the case-that the affidavit does not truly state that which it ought to state": per Cotton L.J. in Jones v Andrews (1888) 58 L.T. 601, 604"

32. In relation to a passage in a document which had been blanked out Hoffman LJ, finding that the matter was not relevant, said:

"The inference I draw from this quotation is that the missing words deal with the shortcomings of the accountants in the other transaction. How can this, or the name of the party involved, be relevant to the issues in this case? Mr. Unwin says that other transactions may enable Arthur Anderson to assemble a general picture of G.E's investment strategy and invite an inference that G.E. was so anxious to become a big player on the London market that it was willing to lend money recklessly, paying little or no attention to accountants' reports and failing to make prudent inquiries."

33. He later observed:

"The fact that the blanked-out part deals with the same subject matter as the part admitted to be relevant may mean that the former is also likely to be relevant. On the other hand it may not. The link between the two pieces of information which makes it appropriate to say that the subject matter is the same may be irrelevant to any issue in the action. Thus the memorandum from which I have quoted deals in one sense with the same subject matter, viz., G.E. deals which have gone wrong. But given the restrictions on the use of similar fact evidence, this is not enough to entail the relevance of the other transaction."

34. I was also referred to passages in Documentary Evidence (9th Edition, 2006), where Charles Hollander QC deals with the following matters:

(1) At para 5-21 and 9-22 in relation to blanking out, he states:

"It is apparent from r.31.19(3), which refers to a person who wishes to claim that he has a right or duty to withhold inspection of a document, or part of a document, that the right to blank out in appropriate cases is retained. The appropriate method is to make clear in the list that inspection is only being offered of part of certain documents because the party serving the list claims to be entitled to blank out parts."

and

"Where material in the document is simply irrelevant, it is unlikely that there will be any point in blanking it out unless it is confidential. Blanking out part of a document always seems to excite interest in the document and the hidden contents for the other side which would be unlikely otherwise to exist. If it is genuinely irrelevant and confidential it can be blanked out. If there is a dispute, the judge can always be asked to rule."

He adds as a footnote that: "In Paddick v Associated Newspapers [2003] EWHC 2991 Tugendhat J. accepted a submission by counsel that the statement of a party who has blanked out parts of a document that the blanked out parts are irrelevant is conclusive."

He comments: "This formulation goes too far. A better way of putting the point would be to say that unless there is evidence that the party has adopted a wrong test or otherwise erred in the decision to blank out the court is unlikely to go behind that decision."

(2) At para 12-33 in relation to the claim for privilege he states:

"It was often said under the RSC that a claim for privilege in the list which was formally correct may not normally be challenged. In fact, the position was less clear. The traditional view was that a claim for privilege, if formally correct might only be challenged if it could be seen from the whole affidavit, or from the nature of the case or the documents themselves, that the party making discovery had erroneously represented or misconceived their nature or effect, but the court would not speculate upon such misconception and would accept the list verified by affidavit as conclusive, unless it could see distinctly that the oath of the party could not be relied upon. There was plenty of old authority to support this statement of principle. The position in practice under the RSC was rather less dogmatic than the theory. The reality was that in many cases the courts did challenge the claim for privilege."

Under the CPR the indications are that if a party can provide an evidential basis for challenging the claim to privilege, the court will investigate the issue in full. First, there is now an express power to apply to the court, which can be invoked by either party, to determine the validity of a claim to privilege. Secondly, there is an increased emphasis on the power to ask the court to inspect to determine a claim. Under the traditional view, if the claim to privilege was in general conclusive, there was little room for inspection by the court. It would be fair to say that a properly drafted claim for privilege in the list imposes an evidential burden on the other party under the CPR. It will be necessary to put forward some sensible evidential basis for the challenge. But once that evidential burden had been satisfied the burden is likely to be on the party claiming privilege to make good the claim."

In this context, I was also referred to paragraph 5-37 of Matthews & Malek (2^nd Edition) but I consider that the position under the former RSC now has to take account of the provisions of CPR rule 31.19 which is not dealt with expressly in that paragraph.

(3) At paras 8-40 to 8-42 in relation to CPR rule 31.19(6) he states:

"There is now express provision under the CPR for the court to require production to itself in order to determine whether to order disclosure or inspection, which suggests the procedure will be used more readily. Practically where the matter arises at trial, inspection by the court dispels any suggestion that there are sinister undisclosed documents lurking under some dubious claim for privilege or irrelevance. Skilful advocacy can sometimes give rise to a suspicion that there is more beneath the surface than is actually the case. So there are times when inspection by the court resolves all difficulties.

However, there are inherent difficulties in inspection by the court which the cases do not in general grapple with. First, the disclosure exercise is always carried out under the supervision of the lawyers, and relies upon the lawyers fulfilling their duties to the court. Day-to-day decisions as to whether to disclose specific documents are taken by the lawyers. No one else is in a position to make those decisions, and there is in practice no supervision by the court as to whether, for example, the lawyers have taken a wrong view of privilege or relevance. Applications for specific disclosure only provide the most limited supervision because the other party simply will not be aware in most cases of the facts relied upon to justify a particular claim for privilege or irrelevance, and the basis for such decisions will not usually be transparent. Given that basic premise, it is illogical for the court to be asked to intervene other than in a case where there is reason to believe on evidence that the lawyers have either misunderstood their duty or are not to be trusted with the decision-making. These will be exceptional cases.

In Paddick v Associated Newspapers [2003] EWHC 2991 Tugendhat J refused to go behind the statement of a party that redacted parts of a document were irrelevant. In Nucleus Information Systems v Palmer [2003] EWHC 2013 (CH) Lewison J. was told that the applicant did not accept that the other party had given proper disclosure of the relevant contents of his home computer, and sought an order that he should have access to the computer in order to search through his lawyers. The court refused to permit the applicant direct access to the computer. In either case the court plainly has jurisdiction to make the order sought. In neither case was the application for inspection by the court. But the issue is analogous. These are welcome examples of the Court recognising that it is for the party giving disclosure through his lawyer to make judgments as to what is to be disclosed, and not for the court to second-guess those judgments without good reason.

Secondly, and more importantly, inspection by the court is usually effected in circumstances in which only one party has seen the documents in question. It would be possible for the documents to be disclosed to the other side for the purpose of facilitating inspection by the court, and disclosed to the lawyers only, but this is rarely done for this purpose and will sometimes be impractical, such as where a claim for privilege is under consideration. It is extremely unsatisfactory that the court should be asked to make a decision where the information available to the parties is different. There is very little consideration of this point in the authorities. In a confidential case, KPMG v White & Case (unreported November 18, 1996) Harman J. observed, in refusing to look at the documents in issue:

"Matters before a judge must either be in evidence in the normal way or, in a confidential information case, it may be that part of the proceedings when the confidential information is disclosed should be heard in camera, but the evidence must be open to the judge and available to both sides. A judge cannot take into account secret information made available to him only by one side. Judicial Decisions must be made on material common to both sides."

Unless both parties consent to inspection by the court, problems may therefore arise in the parties not having equal access to the court, which gives rise to Art. 6 problems as well as under r.1.1(2)(a) of the CPR and thus makes the exercise less attractive to the court."

35. In National Westminster Bank v. Rabobank Nederland [2006] EWHC 2332 Simon J had to consider a claim for legal advice privilege on an application for specific disclosure of documents. While he dealt with the application by ordering an affidavit verifying the claim for privilege, he also considered whether it was appropriate for a court to look at documents. He had concluded that the evidence could not be dismissed as untruthful but that mistakes had been made and inconsistent approaches had been adopted to claiming privilege. He observed that if a threshold had to be met before a Court should be invited to look at specific documents then the threshold had been crossed in that case.
36. Simon J also referred to the decision of Neuberger J (as he then was) in Bank Austria v. Price Waterhouse (unreported, 16 April 1997) in which he said that the remedy of requiring the disclosing party to make good its claim for privilege by an appropriate affidavit was the preferred course and he described the remedy of looking at the documents as a solution of last resort.
37. I accept and adopt the principle that looking at the documents should be a matter of last resort. In my judgment the appropriate course to be adopted in an application under rule 31.19 (5) where the right being relied on is privilege or irrelevance, is for the Court to proceed by way of stages as follows:

(1) The Court has to consider the evidence produced on the application.

(2) If the Court is satisfied that the right to withhold inspection of a document is established by the evidence and there are no sufficient grounds for challenging the correctness of that asserted right, the Court will uphold the right.

(3) If the Court is not satisfied that the right to withhold inspection is established because, for instance, the evidence does not establish a legal right to withhold inspection then the Court will order inspection of the documents.

(4) If sufficient grounds are shown for challenging the correctness of the asserted right then the Court may order further evidence to be produced on oath or, if there is no other appropriate method of properly deciding whether the right to withhold inspection should be upheld, it may decide to inspect the documents.

(5) If it decides to inspect then having inspected the documents it may invite representations.

38. With these principles in mind I now turn to consider the two Applications. Obviously the principles have to be applied taking account of all the circumstances of a particular case. In this case both parties have accepted the court's right to inspect documents as each invites the court to do so in relation to its application.

The Application by Atos: Board Meeting Minutes

39. In relation to the application by Atos, Mr Baker in his fifth witness statement on behalf of Avis states that the redacted sections of the February 2003 Board Meeting related to matters which contain no reference to the FSP Project, ITFS or related relevant matters. He sets out the relevant headings for the sections which have been redacted. He refers to the deleted sentence in what is otherwise a relevant section of the February 2003 Board Meeting minutes and states that the sentence refers to additional capital expenditure on confidential unrelated matters.
40. The initial position taken by Ms Mulley in her fourth witness statement at paragraph 30 was that relevance was not a ground for redaction. That is evidently not correct. She referred to the process for dealing with confidential information which had been agreed by the parties. However I accept that, as Mr Baker says, that agreed process is only relevant to cases where there is confidential information that is relevant. The fact that, as Ms Mulley says, the minutes are important does not detract from the fact that they may contain matters that are irrelevant. Ms Mulley's comments that there are redactions within otherwise relevant material does raise a valid concern but one which is responded to in Mr Baker's fifth witness statement.
41. I have considered the redacted version which states as follows in overview:

"MS confirmed that the Group's total capital expenditure commitments for 2003-2005 represents a cash investment of €100 million, comprising approximately €16 million approved for Project Pearl, €63 million for the Financial Systems & Processes Project, the €10.6 million requested expenditure for IT FutureShape and a remaining €10 million for Avis Futures which is scheduled to complete in mid -2004.

REDACTED-IRRELEVANT

The rate of spend will build up in 2003 and 2004, with savings generated from 2005 onwards."

42. In the context in which it is written I consider that Mr Baker's explanation is inherently credible and likely to be correct.
43. In relation to the redaction of sections with the headings set out in Mr Baker's fifth witness statement, Atos makes no challenge by way of submitting that matters within any of these headings are likely to be relevant. Again I have reviewed the redacted versions of all the minutes which have been submitted and, in my judgment, they are likely to relate to matters other than the FSP Project and I do not consider that there are grounds for challenging the explanation given by Mr Baker.
44. In theses circumstances I do not consider it appropriate either to make an order for further evidence or to inspect the documents.
45. In coming to this conclusion, I also bear in mind that this application by Atos was made in relation to what was originally Request 23. That original request was limited to the redactions in the board minutes of 26 February 2003. This request was first raised in correspondence on 11 December 2006 in relation to disclosure made earlier in 2006. Avis responded on 15 December 2006 and Atos subsequently replied on 11 January 2007. Avis made a second response on 19 January 2007 and Atos replied to that on 31 January 2007.
46. The application was issued on 6 February 2007 and Ms Mulley's fourth witness statement in support is dated 7 February 2007. The matter was dealt with on 9 February 2007, the date fixed for the pre-trial review. Mr Baker's response was in a fifth witness statement dated 8 February 2007 which I first saw on the morning of the application. I have every sympathy for the solicitors who are currently embroiled in voluminous correspondence dealing with many matters leading up to the trial. However, given that this is a late application arising out of disclosure given in 2006 and there is a long and complex trial fixed for mid March 2007, I consider that the court would, in any event, have been less likely to order further evidence or carry out further investigation than if the matter had been dealt with promptly.

The Application by Avis: The FSP Report

47. The FSP Report in its final form was sent to Avis by Atos at the time and is dated 11 October 2004. The first skeletal draft (version 0.1: 27 September 2004) was disclosed without redactions. Redactions have been made to similar sections of the 0.2, 0.3 and 0.5 drafts produced on 4, 7 and 8 October 2004, respectively.
48. The report sent to Avis is marked without prejudice but nothing turns on that. The drafts were marked "Company Confidential, Legally Privileged".
49. The objectives of the review were stated in drafts 0.2 onwards and in the final version to be:

"To respond to concerns that Avis have raised about the status of the FSP programme and the quality of Atos Origin's and PeopleSoft's work on the FSP

To determine what actions need to be taken by AC, PeopleSoft and Avis to give the required level of comfort that:

The expenses system is ready to go live on the 1^st November 2004 as planned

The revenue system will be deployable in an acceptable timeframe.

To review the commercial position relating to the assignment. It is recognised that this element will contain recommendations confidential to Atos Origin, and which will not be released to Avis."

50. On disclosure in 2006, both parties disclosed the final version of the FSP Report but Atos did not disclose any drafts. On 13 December 2006 Avis raised concerns that the drafts had not been disclosed.
51. On 22 January 2007 Atos gave late disclosure of copies of the available drafts saying that they had been "redacted for privilege". The grounds of privilege in the letter of 26 January 2007 produced as a result of the court order stated simply that the redacted material was "the subject of legal advice". As Olswang stated in response, that is not a ground of privilege. The matter was subsequently explained further in Ms Mulley's fifth witness statement on the basis that the redacted passages "contain legal advice reviewed, amended approved and given by James Loughrey (Atos head of their U.K. Legal Department) in his capacity as legal advisor to Atos."
52. That does not in my judgment, properly explain the position. On the face of the draft reports they were produced by employees of Atos not by lawyers. If the authors of the draft reports have set out legal advice which has been given by Mr Loughrey then they will be covered by legal advice privilege. However in that case they would simply contain "legal advice given by James Loughrey".
53. The reference to legal advice "received, amended, approved" by Mr Loughrey suggests strongly that the original text was produced by someone else other than Mr Loughrey but was reviewed by him, amended by him and approved by him. Particularly where earlier an explanation had been given that the drafts had been "the subject of legal advice", I consider that these explanations raise real concerns as to whether the correct test for privilege has been applied. These concerns are further increased by other matters.
54. First as set out below, the letter of 26 January 2007, written as a result of a court order to explain the grounds of privilege, referred to common interest privilege being waived in 5 of the original 15 emails whereas it is apparent that what it should have said was that the documents were not privileged at all. Secondly, Mr Baker at paragraphs 46 and 47 of his fifth witness statement refers to redactions which have been made by Atos to 19 further emails disclosed on 5 January 2007 and for which legal advice privilege is claimed. One of those redacted documents exists elsewhere in an unredacted form. It can be seen from this that the currently redacted part cannot, on any view, be said to be covered by legal advice privilege.
55. All of these matters lead me to the conclusion that there are sufficient grounds for challenging the correctness of the asserted right to claim privilege for the redacted parts of the draft reports.
56. In this case, Atos only gave disclosure of the relevant documents on 22 January 2007 and Avis issued an application supported by Mr Baker's fourth witness statements on 5 February 2007 after receiving Nabarro Nathanson's letter of 26 January 2007 and raising concerns with Atos on 29 January 2007 which were only dealt with, at all, in Ms Mulley's fifth statement on 8 February 2007. Whilst I appreciate the pressures under which she and others must be working and the need for instructions, I do not consider that the passage in the witness statement gives an adequate explanation.
57. In these circumstances, particularly given the proximity of the hearing I do not consider that Atos should be provided with another opportunity to explain the position. Rather I consider that the Court should inspect the documents. As the parties accepted because I am no longer to be considered the trial judge concerns which might otherwise arise will not do so in this case.
58. Having inspected the documents, I then set out my preliminary conclusions and invited any further representations from the parties. No representations were received. Accordingly I order inspection of all parts of the draft Reports which, as set out in Appendix 1 to this judgment, are not covered by legal advice privilege.

The Application by Avis: The 10 emails

59. The 10 emails are the remaining emails for which privilege is claimed. Originally there were 15 but in response to the court's order to set out the grounds for privilege, Nabarro Nathanson wrote on 26 January 2007 and under the heading "common interest privilege" stated that Atos was waiving privilege in respect of 5 of those emails. When Mr Baker pointed out that the emails were not privileged, Ms Mulley accepted this and in her witness statement stated that the 5 emails should have been identified as not being privileged.
60. The ground on which privilege might be claimed was originally put forward as "common interest privilege" when the agreement was drawn up in November 2006 which led to the documents being produced by Baker & McKenzie on behalf of Oracle. On 19 January 2007 Nabarro Nathanson stated that the privilege was "litigation privilege and common interest privilege". In the letter of 26 January 2007 common interest privilege is referred to but only litigation privilege appears to be maintained. The letter states that the litigation privilege was based on the dominant purpose of the author being "to assist with the preparation of Atos' case (that is the subject of these proceedings)".
61. As was explained at the hearing, the events surrounding termination occurred in the middle of October 2004 and a letter before action was sent on 5 November 2004. The timing of the Oracle emails between 18 and 25 November 2004 were therefore after the dispute in the current proceedings had commenced.
62. In Mr Baker's fourth witness statements at paragraphs 16 and 17 he raised valid questions as to the basis on which the emails could be said to be privileged. These questions were not responded to in Ms Mulley's fifth witness statement, except in one respect. Mr Baker had referred to the title of one of the emails "How's India" and commented that such an email would not appear to be privileged. Ms Mulley responded in her witness statement by saying that Mr Baker does not suggest how the heading could possibly be relevant. This seems to raise a matter of relevance rather than privilege.
63. In my judgment Mr Baker has raised matters which called for an explanation and for which no proper explanation has been given. In addition, the mistaken "waiver of privilege" in respect of the five emails which were not privileged, the concern over the lack of privilege for a redaction in one of the further 19 emails and the confused position over whether the privilege claimed was "common interest privilege" or "litigation privilege" are matters which I consider do raise sufficient grounds for challenging the correctness of the asserted right to privilege.
64. In this case, the disclosure was obtained from Oracle under the November 2006 agreement and it was only on 19 January 2007 that inspection of the emails was withheld on the grounds that they were the subject of privilege. On 26 January 2007, in response to the court order, and in Ms Mulley's fifth witness statement there was an opportunity to produce further explanation of the grounds but an adequate explanation was not given.
65. Again, give the proximity of the hearing I do not consider that Atos should be provided with another opportunity to explain the position. Rather, in my judgement, the threshold had been crossed and I should inspect the documents.
66. Having inspected the documents, I then set out my preliminary conclusions and invited any further representations from the parties. No representations were received. Accordingly for the reasons set out in Appendix 2 to this judgment the 10 emails are not covered by the claimed litigation privilege.

The Avis Application: Other matters

67. In addition to the matters raised in relation to the redactions, Avis sought the curriculum vitae of Jane Taylor who has made a witness statement in these proceedings in which she relies on her experience as a qualified accountant. Atos has agreed to provide a copy of her certificate showing her qualification and I consider that they should also provide details of the 12 years of operational experience which she refers to. This information will assist in avoiding time being wasted at the hearing and, if not strictly a matter for disclosure is covered by the court's wide power of case management.

The Atos Application: Other matters

68. In addition to the matters raised in relation to redactions, Atos sought:

(1) Documents referred to in Requests 3 to 7 of 11 December 2006;

(2) All versions of "Scenario 1.xls";

(3) A copy of an email response from Jaspal Kalsi (8:36 on 7 April 2004);

(4) Copies of all existing K:Drive back up tapes and a full copy of the K:Drive as it existed at the termination of the MSA.

Requests 3 to 7

69. Requests 3 to 6 arise out of Note 44 to the 2005 Avis Annual Report and Accounts which refers to a restructuring project. Request 7 arises out of a slide used for a presentation which refers to a "Fit to Grow Program". In summary, Atos says that documents relating to restructuring or programmes introduced by Avis are relevant to issues of benefit derived by Avis and claims for wasted costs.
70. Avis refers to the second witness statement of Mr Carrigan which has been served in relation to the trial. He explains the "Fit to Grow Program" and the so-called "ABC Programme". Avis submits that there is no link in causation between these programmes and the issues in dispute. Mr Carrigan has prepared figures of costs and benefit and explains his calculations which appear in Appendix 1 to the witness statement of Martyn Smith. Avis submits that it has carried out a reasonable search for all documents which may be relevant to Appendix 1 and states that Mr Carrigan has confirmed that he has no further documents relevant to the loss which arises from the Business Support Centre or any benefit which might arise from it.
71. Atos correctly states that it is entitled to investigate Mr Carrigan's evidence and to be provided with documents which will enable it to do so.
72. This request was dealt with in correspondence from 11 December 2006 and resulted in Avis giving disclosure on 2 February 2007 in relation to Requests 3 to 7. There is dispute as to whether that disclosure is sufficient.
73. I consider that Avis should make a search for and disclose any further relevant documents which explain the proposals for changes to the Business Support Centre in Budapest in the context of the 2005 restructuring project or the "Fit to Grow Program" and also any further documents which explain the outcome of any changes in the context of those two programmes. The evidence before me indicates that this is an area where disclosure may not have been provided.

Scenario 1.xls

74. This arises out of Request 8 of 11 December 2006 in relation to business case financial models. Avis has stated that it has no further documents but Atos seeks all versions of spreadsheet "Scenario 1.xls". In paragraph 17 of his fifth witness statement Mr Baker states that Mr Adrian Bull, who has submitted a witness statement for the trial, has explained that as the relevant model was developed new versions overwrote earlier versions and the document was always saved as "Scenario 1.xls" so that there are no further versions. On that basis I do not order any further disclosure.

Jaspal Kalsi email

75. This email has now been produced. It was located within data restored from email back-up tapes by Avis' IT consultants Lee & Allen. It does not appear, on initial reading, to be of any significance.

K: Drive

76. The "K: Drive" was an area on Avis' servers with an identified path where both Avis and Atos stored documents during the course of the FSP Project. Avis provided Atos with a complete copy of the K:Drive as part of its standard disclosure on 20 January 2006 and Avis states that no changes were made to it after the end of the FSP Project.
77. A concern has been raised by a witness statement of Thomas Schumacher who says that he cannot locate certain documents within the K:Drive and does not think it is complete. However, Avis says that it is the version which existed and there is no further disclosure to be given in relation to the request for a complete copy of the K:Drive as at the end of the FSP Project.
78. Atos also seeks disclosure of back-up copies of the K:Drive. Avis explains that the K:Drive was backed-up on a monthly basis and that because the K:Drive was re-organised from time to time and documents were deleted or overwritten, there may be documents on the back-up tapes which have not been disclosed. These tapes will take 2-3 days to locate and some 11 days and about £7500 to restore the data.
79. Avis however says that Atos have known since at least 15 May 2006 that Avis has not searched the back-up copies. The matter was raised by Nabarro Nathanson on 25 September 2006 and responded to by Olswang on 26 September 2006 but only raised again by Atos on 11 January 2007.
80. Avis submits that in these circumstances a late order for disclosure would be disproportionate and Atos has not identified any documents which cannot be located or how the documents on the back-up tapes can be handled close to trial. There are already some 300 files of chronological documents in Trial Bundle H. Atos says that it is content to be provided with the back-up tapes so that it can restore the data and carry out searches to locate any further documents.
81. I do not consider that Atos have established any grounds for seeking disclosure at this late stage of these back-up copies. They have not identified significant documents which must be missing and essentially the exercise is more an exploratory one. It is made late in circumstances where Atos have known of the existence of the back-up copies since May 2006 but have not previously pursued any application. It is precisely the type of exercise which could lead to attempts to make late additions to Bundle H of insignificant documents which have not been properly analysed by either party. Such an unjustified exercise cannot be allowed in this case so close to trial. I therefore make no further order for disclosure in respect of either the K:Drive or the back-up copies.
SCHEDULE 1 The drafts of the FSP Report

1 Atos relies on legal advice privilege. In relation to these drafts of the report. These drafts were not written by Mr James Loughrey but were produced by authors identified in the report. (see SB5/15)

2 The communications sent to Mr Loughrey or received from Mr Loughrey in the context of receiving legal advice would be privileged.

3 If the authors themselves set out their views in a draft which was circulated for comment generally including being sent to an in-house lawyer or if the authors altered the draft as a result of obtaining legal advice neither the original draft circulated by them generally nor the altered text taking account of legal advice would be privileged unless it set out the contents or gist of that legal advice obtained, in this case, from Mr Loughrey. I accept that the advice might include "presentational advice": see Three Rivers DC v. Bank of England (No 6) [2005] 1 AC 610 at 652H, 658D and 681D. Thus, such advice would be covered but not, in my judgment, the presentation which was made taking into account that advice.

4 In a note dated 12 February 2007 providing the Court with copies of further authorities, counsel for Atos also stated that:-

"Atos does not intend to tender further evidence on the points before the Court. However in light of the way in which the parties' arguments were developed on Friday, Atos thought it proper to record that the contemporaneous emails (in which privilege is not hereby waived): (1) do not disclose that version 0.2 of the Draft Review report (referred to at paragraph 9(b) of the fifth witness statement of Rosemary Mulley) and version 0.3 (paragraph 9(d) ibid) were sent to James Loughrey;(2) disclose that version 0.2 dated 6 October 2004 (paragraph 9(c) ibid) and version 0.5 (paragraph 9(e) ibid) were sent to James Loughrey, and (3) disclose that an earlier version 0.2 dated 4 October 2004 was sent to James Loughrey."

5 I bear that in mind when I consider the documents. My conclusions on the review of the five drafts is as follows, referring to pages in SB5:

A Version 0.1 dated 27/9/04 (SB5 1 to 11)

There are no redactions apparent in this version.

B Version 0.2 dated 4/10/04 (SB5 12 to 31)

(1) Redaction in para 4.6.1 on SB5/21

This does not contain legal advice and is not privileged.

(2) Redaction in para 4.6.2 on SB5/22

This does not contain legal advice and is not privileged.

(3) First redaction in para 4.6.2 on SB5/23

This does not contain legal advice and is not privileged.

(4) Second Redaction in para 4.6.2 on SB5/23

This does not contain legal advice and is not privileged.

(5) Third redaction in para 4.6.3 on SB5/23

This sets out the financial position and does not contain legal advice. It is not privileged.

(6) Redaction of para 4.6.3 and 4.6.4 on SB5/24

This sets out the financial position and deals with matters of corporate and commercial management. It does not contain legal advice and is not privileged

(7) Redaction of para 4.6.4 and 4.6.5 on SB5/25

This deals with matters of corporate and commercial management and supplier management. In the first bullet paragraph under para 4.6.5 the wording after "has not been reviewed" may properly be redacted as it is likely to contain legal advice. Otherwise the text does not contain legal advice and is not privileged.

(8) Redaction of para 5.6.1 on SB5/27

This deals with contractual issues and sets out views or arguments on legal matters. On balance it is likely that this paragraph contains legal advice and therefore may be properly redacted.

(9) Redaction of para 5.6.1, 5.6.2, 5.6.3, and 5.6.4 on SB5/28

The content of para 5.6.1 again deals with contractual issues which may properly be redacted.

The remainder of the paragraphs (para 5.6.2, 5.6.3 and 5.6.4) deal with financial and management matters and do not contain legal advice. They are not privileged.

(10) Redaction of para 6.6 on SB5/29

There is no text and the heading alone is redacted. It is not privileged.

C Version 0.2 dated 4/10/04 (SB5 32 to 56)

(1) Redaction of headings on contents page (SB5/33)

These headings relate to matters similar to those dealt with in B(5), B(6), B(7) and B(9) above which are not privileged.

(2) Redaction of heading on contents page (SB5/34).

The relevant heading relates to the matters similar to those dealt with in B(10) above and is not privileged.

(3) Redaction of text on SB5/36

This text is likely to be a request for legal advice and is privileged.

(4) Redaction of para 4.6.1 on SB5/44

As B(1) above.

(5) First redaction in para 4.6.2 on SB5/46

The words "This would appear to be inconsistent" should not be redacted but the remainder of this bullet paragraph is properly redacted on the basis that it contains legal advice.

(6) Second Redaction in para 4.6.2 on SB5/46

As B(2) above.

(7) Third redaction in para 4.6.2 on SB5/46

As B(3) above

(8) Fourth Redaction in para 4.6.2 on SB5/46

As B(4) above.

(9) Fifth redaction - para 4.6.3 on SB5/46

As B(5) above.

(10) Redaction in para 4.6.3 on SB5/47

As B(5) above.

(11) Redaction of para 4.6.3, 4.6.4 and 4.6.5 on SB5/48

In the first bullet paragraph under para 4.6.5 the wording after "has not been reviewed" may properly be redacted as it is likely to contain legal advice. Otherwise these sections deal with financial and management issues and do not contain legal advice and are not privileged.

(12) Redaction of para 5.6.1 on SB5/52

As B(8) above. I consider that this may properly be redacted.

(13) Redaction of para 5.6.1, 5.6.2, 5.6.3 on SB5/53

The contents of para 5.6.1 again may be properly be redacted. The remainder of the paragraphs (paras 5.6.2.ad 5.6.3) deal with financial and management matters and do not contain legal advice. They are not privileged.

(14) Redaction of paras 5.6.3 and 5.6.4 on SB5/54

These deal with financial and management matters and do not contain legal advice. They are not privileged.

(15) Redaction of para 6.6 on SB 5/55

As B(10) above.

D Version 0.3 7 October 2004 (SB5/57-82)

(1) Redaction of contents (SB5/58 and 59)

As C(1) and (2) above.

(2) Redaction of para 4.6.1 on SB5/69

As B(1) above.

(3) First Redaction of para 4.6.2 on SBS/71

As C(5) above.

(4) Second, third and fourth Redaction of para 4.6.2 on SB5/71

As B(2), B(3) and B(4) above.

(5) Fifth redaction - para 4.6.3 on SB5/71

As B(5) above.

(6) Redaction of para 4.6.3 on SB5/72

As B(5) above.

(7) Redaction of para 4.6.3 and 4.6.4 on SB5/73

As B(6) above.

(8) Redaction of para 4.6.4 and 4.6.5 on SB5/74

As B(7) above.

(9) Redaction of para 5.6.1 on SB5/77

As B(8) above.

(10) Redaction of paras 5.6.1, 5.6.2 and 5.6.3 on SB5/78

As C (13) above.

(11) Redaction of para 5.6.4 on SB5/79

This deals with management matters and does not contain legal advice. It is not privileged.

(12) Redaction of para 6.6 on SB5/81

This section contains commercial recommendations. The opening section of each draft report (except version 0.1), including the final report (SB5/171) served by Atos, it is stated that the objective of the Report was:

"To review the commercial position relating to the assignment. It is recognised that this element will contain recommendation confidential to AC, and which will not be released to Avis."

These commercial recommendations are said to the confidential to AC. They are commercial recommendations and do not on their face contain legal advice. Whilst they may have been "reviewed, amended or approved" by Mr Loughrey that does not make them privileged and I do not consider that paragraph 6.6 can properly be redacted on the basis of legal advice privilege.

E Version 0.5 8 October 2004 (BS/83 to 125)

(1) Redaction of contents pages (SB5/84 and 85)

As C(1) and C(2) above.

(2) Redaction of para 4.6.1 on SB5/104

As B(1) above

(3) First redaction of para 4.6.2 on SB5/105

As C(5) above

(4) Second and third Redaction of para 4.6.2 on SB5/105

As B(2) and B(3) above

(5) Redaction of para 4.6.2 on SB5/106

As B(4) above.

(6) Redaction of para 4.6.3 on SB5/106

As B(5) above

(7) Redaction of paras 4.6.3 and 4.6.4 on SB5/107

As B(6) above.

(8) Redaction of para 4.6.4 and 4.6.5 on SB5/108

As B(7) above.

(9) Redaction of 5.6.1 on SB5/120

As B(8) above

(10) Redaction of 5.6.1, 5.6.2, 5.6.3 and 5.6.4 on SB5/121

As B(9) above

(11) Redaction of 6.6 on SB5/123 to 124

As D(12) above

SCHEDULE 2 The 10 emails

1 Atos relies on litigation privilege in relation to the emails. It does not rely on the emails being irrelevant or on there being any common interest privilege.

2 Litigation privilege applies to documents embodying communications with (including reports to or from) a non-professional servant agent or third party if they came into existence for the purpose of obtaining advice in anticipated proceedings.

3 That litigation privilege applies to a document which is produced or brought into existence where the demonstrated purpose of its author, or of the person or authority under whose direction it is produced or brought into existence is the use of the document or its contents in order to obtain legal advice or to conduct or aid in the conduct of litigation in reasonable prospect at the time of its production.

4 As Taylor LJ said Balabel v. Air India [1988] 1Ch 317 at 330 when speaking of legal advice privilege but which I consider is also relevant to litigation privilege:

"Usually a letter which does no more than acknowledge receipt of a document or suggest a date for a meeting will be irrelevant and so non-disclosable."

5 In the context of litigation privilege I consider that such privilege only applies to documents produced when the dominant purpose is the use of the documents or its contents in order to obtain advice or conduct the litigation. Thus questions asked or answers given or reports produced for that purpose will be covered by the privilege. The preliminary actions such as arranging a meeting or any documents produced which relate to the fact that information might be given or documents might be produced which then will be covered by litigation privilege are not, in my judgment, covered by such litigation privilege. They are generally likely to be irrelevant.

6 In the present case in relation to the particular documents:

(1) OR 004347: Email 18/11/04 Hardy to Gallagher, Fitchett, Lasan

This is an email concerning preliminary actions. It is not covered by litigation privilege.

(2) OR004348: Email 18/11/04 Gallagher to Hardy, Van der Hagen (copied to Fitchett, Lasan)

This is an email responding to and incorporating the email at 004347 concerning preliminary actions. It is not covered by litigation privilege.

(3) OR004349: Email 18/11/04 Van der Hagen to Gallagher (copied to Fitchett, Lasan, Hardy)

This is an email responding to 004348 (incorporating 004347 and 004348) and concerns preliminary actions. It is not covered by litigation privilege.

(4) OR004350: email 18/11/04 Hardy to Van der Hagan (copied to Fitchett, Lasan, Gallagher).

This is an email responding to 004349 (incorporating 004347, 004348 and 004349) and concerns preliminary actions. It is not covered by litigation privilege

(5) OR 004351: Email 18/11/04 Van der Hagen to Hardy (copied to Fitchett, Lasan, Gallagher).

This is an email responding to 004350 (incorporating 004347 to 004350) and covers preliminary matters. It is not covered by litigation privilege.

(6) OR 004358: Email 19/11/04 Fitchett to Hardy

This is an email which concerns preliminary matters. It is not covered by litigation privilege.

(7) OR 004360: Email 19/11/04 Hardy to Lobo

This is an email which, in the first paragraph, contains reference to irrelevant personal matters. The remainder concerns preliminary matters. It is not covered by litigation privilege.

(8) OR 004378: Email 23/11/04 Gallagher to Hardy.

This email incorporates three other emails:

(a) An email of 17/11/04 from Mark Tapp of Atos to Stephen Blundell and Richard Shakespeare at PeopleSoft concerning payment for work carried out by PeopleSoft on the Avis project. That is not covered by litigation privilege.

(b) An email of 18/11/04 from Mark Tapp to Serge Minne forwarding the email of 17/11/04 to him. That is not covered by litigation privilege.

(c) An email of 23 /11/04 from Serge Minne (copied to James Loughrey of Atos and Steve Gallagher) concerning the account between Atos and PeopleSoft, and responding to previous emails. That is not covered by litigation privilege.

The email itself concerns preliminary matters. It is not covered by litigation privilege.

(9) OR 004385: Email 25/11/04 Hardy to Gallagher.

This is a reply to 004378 (incorporating the same emails as 004378). It concerns preliminary matters. It is not covered by litigation privilege.

(10) OR 004379:Email 24/11/04 Lasan to Lasan

This email forwards an email of 23/11/04 from Gallagher to Hardy (copied to Van der Hagan, Fitchett, Lasan). That email of 23/11/04 concerns preliminary matters. It is not covered by litigation privilege.