Privilege Claims, Deleted Messages and an Inadvertent Bundle

Item (i) - in-house counsel's email. Likely privileged as legal advice privilege: a confidential communication between a lawyer and a client for the purpose of giving or receiving legal advice. The fact that counsel is employed in-house does not matter, provided the advice is given in a legal capacity rather than as a commercial or compliance function. An email on whether the contract permits withholding milestone payments is squarely legal advice. The list should say so, identify the author and recipient, and record that confidentiality has not been lost.

Item (ii) - the consultant's report. This is the contested one. It is not legal advice privilege, because the consultant is not a lawyer and the report is not advice. Litigation privilege can apply to a confidential communication between a party and a third party, but only where the dominant purpose of bringing the document into existence was the conduct of litigation that was reasonably in prospect. Here the letter of claim had arrived, which helps Kestrel, but the regulator's request pulls the other way, and if the report was created to satisfy a statutory safety obligation in the ordinary course of business, privilege will fail. If the report has been sent to the regulator, confidentiality has been lost, at least as against the regulator and arguably generally. The claim must be supported by a witness statement from the person who commissioned the report, setting out the instructions, the reason and the timing. If the document is mixed-purpose, do not bluff: the safer course may be to disclose it and manage the damage.

Item (iii) - the board minute. Documents are not privileged merely because they mention a claim. But a minute that records the substance of legal advice given to the board may itself attract privilege or require redaction of the privileged passages. The court has a document-inspection power and can look at the document itself to test the claim. The list should identify the specific passages rather than the whole minute, and the deponent should explain who gave the advice recorded.

The breach. The duty to preserve documents arises as soon as litigation is reasonably contemplated, and certainly on receipt of a letter asking for preservation. Deleting two years of messages from the project manager's phone three weeks later is a serious failure, whether or not it was designed to destroy evidence.

Remedies, in ascending order of seriousness:

1. Specific disclosure. Apply for an order that Delphi give specific disclosure of the messages, and that it set out in a witness statement what happened: which devices and accounts were involved, what was deleted, when, on whose instruction, and what steps have been taken to retrieve material from the phone, the cloud backup, or the telecom provider.

2. Inspection of the device. Apply for inspection of the phone or for the appointment of an independent expert to image and search it, with the costs of the exercise borne by Delphi if the deletion is unexplained. Build in confidentiality protections so that irrelevant private material is not exposed.

3. Adverse inference. At trial, ask the court to infer that the deleted messages would have been unhelpful to Delphi's case. This inference is available but is not automatic; it depends on the relevance of the missing material to a live issue. If the project manager was the person who accepted the software as fit for purpose, the inference is a powerful one.

4. Costs and contempt. Ask for the costs of the application on an indemnity basis, and consider, in a bad case, whether the deletion amounts to an interference with the administration of justice.

Practical point: send a further preservation letter expressly covering backups and personal devices, and pin Delphi down in a witness statement before any application is heard, so it cannot later reconstruct its account.

Act immediately and in writing. Privilege is not waived by accidental disclosure; it is waived by intentional disclosure, or by disclosure in circumstances where the privilege-holder has not taken reasonable steps to protect it. Every day of silence makes it look as though Kestrel accepted the exposure.

The letter should: assert that the document is privileged and was sent by mistake; identify it precisely; require its immediate return or destruction, together with all copies and any notes made from it; require confirmation that it has not been circulated further within Delphi or its legal team; and reserve Kestrel's rights, including the right to apply for an injunction without further notice. The covering correspondence should also correct the bundle.

The legal test. Where a document has been disclosed by mistake in circumstances where it is obvious that the disclosure was unintended, the court will ordinarily restrain the recipient from using it. Where the mistake was not obvious, the court weighs the interests of justice, including the conduct of the disclosing party, the stage of the litigation, and the damage to the integrity of the trial. A draft advice from counsel analysing weaknesses is the paradigm case of a document whose disclosure is obviously a mistake.

Professional obligations. Delphi's lawyers are not entitled to take unfair advantage of an obvious error. Their associate's instinct to use it in cross-examination is precisely what the professional rules forbid; the correct step was to stop reading and notify Kestrel. Kestrel should say so, politely but clearly, in the letter.

If Delphi does not comply: apply for an injunction and delivery up, and seek the costs of the application on an indemnity basis. Consider also whether Delphi's conduct should be drawn to the court's attention at the next case management hearing.