2. Is a party required to disclose and produce all documents relevant to the litigation?
Discovery is governed mainly by Order 24 of the Rules of the High Court (Cap. 4A) (“RHC”) or the Rules of the District Court (Cap. 336H) (“RDC”). The purpose of discovery is to ensure that parties disclose documents which are relevant to the issues in dispute, so that the case can be dealt with fairly. A party is required to disclose the existence of all documents which are or have been in his possession, custody, or power relating to any matter in question in the action.
It is critical to distinguish between the duty to disclose (listing the existence of a document) and the duty to produce (allowing the other party to inspect it). Even if a document is highly relevant and it is necessary to disclose the document, a party may object to its production and inspection if it is protected by privilege or immunity. However, the document’s existence must still be disclosed in the list of documents. These protections recognise that certain interests, such as the confidentiality of legal advice, the right not to incriminate oneself, or the protection of the public interest, may outweigh the ordinary duty to disclose documents.
How privilege is claimed in discovery
A party who wishes to claim that any documents are privileged from production must assert the claim in the list of documents. Under Order 24, rule 5 of the RHC or RDC, the list of documents is prepared in Form No. 26.
Documents which are in the party’s possession, custody or power, but which the party objects to producing, are listed in Schedule 1, Part 2 of the list. The party must also state the grounds of objection sufficiently.
For example, it may be enough to describe the documents as “correspondence between the defendant and his solicitors for the purpose of obtaining legal advice”. The description must give the other side enough information to understand the basis of the claim, without revealing the privileged content itself.
Verification by affidavit/affirmation and court’s power to inspect documents
While a list of documents is served initially, any party can require that the list be verified by an affidavit/affirmation (Form No. 27). Once the list of documents is verified by affidavit/affirmation, the claim to privilege is generally treated as prima facie conclusive. The court will not lightly go behind the affidavit/affirmation. However, if the documents themselves, or other evidence or admissions, suggest that the party has misunderstood the nature of the documents or cannot be trusted on oath, the court may investigate further. The court possesses a discretionary power to inspect any document for which privilege is claimed (except in cases involving national security) to decide the validity of the claim or objection. For more information, please refer to “I have reasonable grounds to believe that the other party fails to disclose all relevant documents during the discovery stage. What can I do?”
Before considering the particular categories of privilege, it is important to distinguish between the procedural act of claiming privilege and the substantive legal basis for doing so. Order 24 explains how a party must assert the objection in the discovery process, but the validity of the objection depends on the underlying legal principles relied upon. The most common and important of these doctrines is legal professional privilege, although other protections, such as privilege against self-incrimination, public interest immunity and the “without prejudice” rule, may also justify withholding documents from inspection.
1. Legal professional privilege
Legal professional privilege is one of the most important forms of privilege. It protects the confidentiality of communications between lawyers and clients. In Hong Kong, it is regarded as a fundamental right and is also protected by Article 35 of the Basic Law.
Legal professional privilege is generally absolute. This means that, unless it is waived by the client or overridden by clear statutory wording, the court will not balance it against other interests. If the document is properly protected by legal professional privilege, it does not have to be produced.
Legal professional privilege has two main branches: legal advice privilege and litigation privilege.
(i) Legal advice privilege
Legal advice privilege protects confidential communications between a lawyer and a client where the dominant purpose of the communication is to seek or give legal advice.
This protection applies whether or not litigation is already taking place or even contemplated. The key point is that the communication must be made in a legal context. It will not cover purely administrative communications simply because a lawyer was copied in or present at a meeting.
In the corporate context, Hong Kong law has taken a broader approach than the narrow English approach which limits “the client” to a small group of authorised employees. The Hong Kong Court of Appeal has applied a dominant purpose test to internal corporate communications. The question is whether the relevant document or communication was produced for the dominant purpose of obtaining legal advice.
(ii) Litigation privilege
Litigation privilege is wider than legal advice privilege in some respects, but it only applies where litigation is pending, reasonably contemplated, or in prospect.
Unlike legal advice privilege, litigation privilege can cover communications with third parties. For example, it may protect communications with expert witnesses, private investigators, or other persons assisting in the preparation of the case.
The document must have been created for the dominant purpose of obtaining legal advice in relation to the litigation, or for collecting evidence or information for use in the litigation. If a document was created for several purposes, litigation privilege will only apply if the litigation purpose was the dominant or main purpose at the time the document was made.
Important limitations to legal professional privilege
Documents that were created for a non-privileged purpose do not become privileged merely because they are subsequently sent to a solicitor for the purpose of litigation.
Legal professional privilege does not extend to communications made in furtherance of a criminal or fraudulent act. If a party seeking discovery establishes a strong prima facie case of fraud, the court will displace the privilege.
Privilege is the right of the client and can only be waived by the client or his authorised agent.
2. Privilege against self-incrimination
A person may also object to producing a document if production would tend to expose that person, or that person’s spouse, to a criminal charge or penalty under Hong Kong law. This protection is found in section 65 of the Evidence Ordinance (Cap. 8).
The risk must be real and not merely fanciful or theoretical. A party cannot rely on this privilege simply by making a vague assertion that the document may be damaging.
This privilege has been restricted in some statutory contexts. For example, it may be limited or removed in relation to Anton Piller orders, investigations by the Securities and Futures Commission, and proceedings concerning the recovery of drug trafficking proceeds. In some cases, the statute may require production of the material but provide “use immunity”, meaning that the compelled material cannot be used against the person in later criminal proceedings.
This privilege must be claimed on oath by the person himself. A claim made by a solicitor on a client’s behalf is insufficient.
3. Public interest immunity
Public interest immunity is not a privilege belonging to a party, but an immunity from production founded on the principle that the administration of justice must occasionally yield to the protection of society. Unlike legal professional privilege, the court must insist on this immunity even if no party objects to disclosure.
Examples may include documents involving national security, the identity of police informers, sensitive government operations, or matters affecting the proper functioning of the public service.
Unlike legal professional privilege, public interest immunity is not absolute. The court must balance the public interest in keeping the document confidential against the public interest in the proper administration of justice. The final decision rests with the court.
Once the court concludes the public interest in secrecy outweighs the interests of justice, the evidence is excluded, and the court has no residual discretion to permit its use.
A claim to public interest immunity is often supported by a certificate from a senior government official, such as the Chief Secretary for Administration. However, the certificate is not conclusive. The court may look behind the certificate and, where appropriate, inspect the documents itself to decide whether the claim is justified.
However, the court should not inspect the documents where a claim is made on the grounds of national security and is supported by an appropriate certificate.
In exceptional cases, especially those involving national security or immigration and deportation matters, the court may use a special advocate procedure. A special advocate may be appointed to represent the interests of a party who is excluded from seeing the sensitive material.
Under Order 77, rule 12(2) of the RHC or RDC and section 24 of the Crown Proceedings Ordinance (Cap. 300), the Government may be permitted to refuse to disclose even the existence of a document in its list if the Chief Secretary believes that disclosing its existence would itself be injurious to the public interest. This is a unique exception to the standard duty of discovery.
4. “Without prejudice” communications
The “without prejudice” rule protects genuine settlement communications. Its purpose is to encourage parties to try to settle disputes freely, without fear that concessions or proposals made during negotiations will later be used against them at trial.
For a claim of “without prejudice” privilege to succeed, the party must show:
- There must be an existing dispute in respect of which legal proceedings have commenced or are contemplated. A mere admission of a debt where there is no dispute as to liability or quantum does not attract protection.
- The communication must be made in a genuine attempt to further negotiations to settle that dispute.
- Marking a document "without prejudice" is a strong indication of intent but is not conclusive. Conversely, a document not so marked may still be protected if the surrounding circumstances show the parties were seeking to compromise.
Although the rule is mainly a rule about admissibility of evidence at trial, it may also protect documents from production during discovery. However, the fact that a document may be inadmissible does not mean it is exempt from disclosure. A party must still list these documents in Schedule 1, Part II of his list of documents if they are already known to the opposing party.
Without prejudice communications are generally protected from disclosure to third parties who were not part of the original negotiations. This is because such communications are often considered irrelevant to the “matters in question” between the applicant and the respondent in a separate action.
There are exceptions. Without prejudice communications may be referred to for limited purposes. For example, “without prejudice” communications may be admitted to prove that the negotiations resulted in a binding settlement agreement. They may also be referred to in order to explain delay in the proceedings, such as where a party is resisting an application to strike out the action for want of prosecution. After judgment, the communications may be shown to the court for the limited purpose of dealing with costs, particularly where an offer is relevant to whether a party acted reasonably.
The protection may also be displaced where the communications are relevant to issues such as mitigation of loss, for example to answer an allegation that a party failed to take reasonable steps to reduce its loss.
Finally, the rule cannot be used as a cover for “unambiguous impropriety”. This includes clear cases of fraud, perjury, blackmail, or attempts to prevent a witness from giving evidence. However, this exception is applied only in the clearest cases, because the courts are careful not to weaken the general protection given to genuine settlement negotiations.
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