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Posted on: 19 March 2018
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In this latest Environmental Law News Update William Upton, Nicholas Ostrowski and Natasha Hausdorff consider legal privilege in the context of a regulatory investigation, the publication of a Joint Inquiry report entitled ‘Improving Air Quality’ and the EU Commission’s Sustainable Finance Action Plan for a Greener and Cleaner Economy.
Off the record, on the QT and very hush hush
No, we’re not talking about the archetypal celebrity gossip columnist Sid Hudgens in James Elroy’s seminal novel LA Confidential but about one view of legal privilege in which any document prepared with the assistance of solicitors for the purpose of anticipated criminal or civil litigation is privileged, off the (regulator’s) record, on the quiet and very hush hush between client and lawyer.
In the blockbuster case of Serious Fraud Office v Eurasian Natural Resources Corporation Ltd  EWHC 1017 QB (where a claim to privileged documents prepared by a mining company in the course of an internal investigation into fraud was rejected), the High Court upheld a much more stringent approach to privilege that a document will only attract litigation privilege if 1) litigation is in progress or reasonably in contemplation, 2) the relevant communication or document is made or created with the sole or dominant purpose of conducting that litigation and 3) the litigation is adversarial, not investigatory or inquisitorial. The High Court said “Criminal proceedings cannot be reasonably contemplated unless the prospective defendant knows enough about what the investigation is likely to unearth, or has unearthed, to appreciate that it is realistic to expect a prosecutor to be satisfied that it has enough material to stand a good chance of securing a conviction.”
Although permission has been granted to ENRC Ltd to appeal to the Court of Appeal where a host of interested parties will make submissions (including the Law Society who strongly object to such a narrow view of privilege being taken), the ramifications of the ENRC case are now being felt in the regulatory world.
In R (Health and Safety Executive) v Paul Jukes  EWCA Crim 176, Mr Jukes had been the transport and operations manager for a waste company at which another employee, was killed in a baling machine. Mr Jukes denied he had responsibility for health and safety at the time of the incident.
At trial the HSE pointed to a statement signed by Mr Jukes which he had given to his employer’s solicitors and in which he had admitted taking formal responsibility for H&S before the accident. He accepted that the signature on the statement was his but claimed to be unable to recall signing it. It was argued at trial for Mr Jukes that the statement was inadmissible since it was a legally privileged document, but the judge rejected this, admitting it instead as material evidence. Mr Jukes was convicted of an offence under the Health and Safety at Work etc Act 1974 and appealed.
On appeal, it was submitted on Mr Jukes’ behalf that the employer’s solicitor had represented both the company and all the individuals associated with it (including Mr Jukes) at the time when his statement was signed. It was therefore privileged, having been created with the assistance of solicitors for the dominant purpose of anticipated civil or criminal litigation and should not have been seized by the HSE.
The Court of Appeal rejected Mr Jukes’ claim to privilege on the basis that there was no evidence that at the time when his statement was signed either he or the company had enough knowledge of what the HSE investigation would unearth that it was realistic to expect the HSE to be satisfied that it had enough material to stand a good chance of securing convictions and that litigation was therefore reasonably in contemplation. The Court went on to hold that any privilege which did attach to the document was exclusive to the company or its Managing Director on whose behalf the solicitors preparing the statement were instructed.
Until the Court of Appeal rules on the issue in the ENRC case, individual directors and employees at risk of personal prosecution for environmental or other regulatory offences should be aware that signed statements provided to solicitors instructed by their employer pursuant to internal incident investigations may not be privileged. If such internal incident investigation reports are privileged, they are likely to be privileged only for their employer alone. Solicitors conducting such incident investigations should advise their clients and interviewees of this accordingly.
A new Clean Air Act ?
The joint inquiry held by four Select Committees produced its report this week: “Improving Air Quality”. It is unprecedented for the Select Committees to join forces in this way, and it is important for emphasising the cross-cutting nature of the issue. The report represents the combined views of the Environment, Food and Rural Affairs, Environmental Audit, Health and Social Care, and Transport Committees.
The concern expressed is that the Government is not acting quickly enough – which adds more political weight and pressure to the legal pressure coming from the succession of successful court challenges by ClientEarth. There is a call to provide more financial support to local authorities, and to bring forward the date from 2040 by which manufacturers must end the sale of conventional petrol and diesel cars, in line with more ambitious commitments in other countries. But they also emphasise that the public health crisis is about more than just nitrogen dioxide emissions.
One interesting headline is their call for a new Clean Air Act, to set out the government’s regulatory course, including whether to adopt World Health Organization air quality guidelines for all air pollutants, including sulphur dioxide, particulate matter and ozone, and not just nitrogen dioxide. The proposal for a right to clean air is lacking in real detail. The Minister’s response to the Committees’ questions reveals the government’s attitude. She argued that “We are clear on what we have to try to do, we know that councils have the powers to do that and we need to press on with it together”. She denied that new legislation was needed to support legal redress on air quality, and insisted that “there is absolutely no diminution in any sense of any target or of our ambition” in light of Brexit. Translation – we have existing powers that can be used, and the focus now should be on what is happening at the more local level.
The EU Commission’s Sustainable Finance Action Plan for a Greener and Cleaner Economy
The European Commission has released information on its strategy to develop a financial system that supports the EU’s climate and sustainable development outlook.
Based on recommendations set out by the High-Level Expert Group on sustainable finance (in its final report published in January 2018) the Commission has laid out a roadmap to boost the role of finance in achieving a “well-performing economy that also delivers on environmental and social [goals]”.
The EU and governments around the world committed to the objective of a more sustainable economy and society when they adopted the Paris Agreement on climate change and the UN 2030 Agenda for Sustainable Development. This new Action Plan constitutes a key step to implementing both the Paris Agreement and the EU’s agenda for sustainable development.
The Commission’s Action Plan comprises the following strategy points:
– Establishing an EU classification system for sustainable finance; a common language to define what is sustainable and identify potential areas of impact.
– Introducing EU labels for green financial products, on the basis of this new classification system.
– Clarifying the duties of asset managers and institutional investors to take into account sustainability and enhance disclosure requirements.
– Incorporating sustainability in prudential requirements, including potentially recalibrating capital requirements for banks for sustainable investments.
– Enhancing transparency in corporate reporting; in particular revising the guidelines on nonfinancial information to further align them with the recommendations of the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD).
The Commission’s press release emphasised the necessity of steps addressing the financial system, if the EU is to develop more sustainable economic growth, ensure stability, and foster more transparency and longtermism in the economy. This perspective is also reflected in the European Union’s Capital Markets Union (CMU) project.
The Commission is organising a conference on 22 March 2018 to discuss the Action Plan, which can be streamed live here.
The Chambers UK Guide to Environmental Law 2018 was published this week and written by Six Pump Court’s Environmental Law Team. The Guide can be accessed on the Chambers UK website. You can also use the link here to access the full-text pdf version. The Guide provides easily accessible information to help navigate environmental law in the UK and covers the environmental regulatory framework, environmental protection, developments in policy and law, enforcement, liability and disclosure requirements as well as the law as it relates to contaminated land, waste, asbestos, climate change and emissions.
Have you seen our latest Environmental Law Video Newscast – a monthly round-up of the latest developments in environmental law.
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