Various Claimants v G4S PLC
[2023] EWHC 2863 (Ch)
Aabar Holdings SARL v Glencore PLC & Ors
27 November 2024
[2024] EWHC 3046 (Comm)
High Court
A company sued by one of its shareholders (or someone who used to be one) argued it could keep some documents secret. The judge said no, because the old rule supporting this secrecy no longer applies and there’s no good reason to make a new one. The judge also explained that, even if there were such a rule, it wouldn't apply to documents meant to settle the case privately.
Key Facts
- •AABAR HOLDINGS S.À.R.L. (Aabar) brought a claim against Glencore Plc and others.
- •Aabar was the sole shareholder of Commodities S.à.r.l., which allegedly held Glencore shares.
- •The dispute centered on whether Glencore could assert privilege against Aabar regarding various documents.
- •Glencore's claims to privilege were challenged by Aabar, while other claimants did not challenge them.
- •The central issue was the validity and application of the 'Shareholder Rule' in English law.
Legal Principles
Shareholder Rule: A company cannot assert privilege against its shareholder, except for documents created for the purpose of hostile litigation.
Various cases, including Gouraud v Edison Gower Bell Telephone Co, Woodhouse & Co Ltd v Woodhouse, Sharp v Blank, Various Claimants v G4S Plc, Oasis Investments II Master Fund Ltd v Jardine Strategic Holdings.
Joint Interest Privilege: Privilege cannot be claimed where parties have a joint interest in the communication's subject matter at its creation.
Thanki, The Law of Privilege; Dawson-Damer v Taylor Wessing LLP; CIA Barca de Panama SA v George Wimpey & Co Ltd; Commercial Union Assurance Co Plc v Mander; R (Ford) v FSA; Wang v Wong.
Without Prejudice Privilege: Communications made for genuine compromise attempts are privileged.
Muller v Linsley and Mortimer; Cutts v Head.
Successor in Title: A successor in title stands in the shoes of its predecessor regarding privilege.
Travelers Insurance Co Ltd v Armstrong; Twin Benefits Ltd v Barker.
Outcomes
The Shareholder Rule does not exist in English law.
The original proprietary interest rationale is outdated post-Salomon v A Salomon & Co Ltd. The proposed joint interest privilege rationale lacks sufficient authority and principled justification, especially in the context of large public companies with dispersed shareholding.
If the Shareholder Rule existed, it would apply to legal advice and litigation privilege but not without prejudice privilege.
Extending it to without prejudice privilege would harm public policy by deterring settlements and ignoring the interests of third parties involved in negotiations.
If the Shareholder Rule existed, it would extend to Aabar as the successor to Commodities' beneficial ownership of Glencore shares.
Focus is on beneficial ownership and joint interest, not just legal title. Aabar, as successor, inherits Commodities' rights.
If the Shareholder Rule existed, it would extend to privileged documents of Glencore's subsidiaries.
A chain of holding companies sharing a joint interest means the ultimate subsidiary cannot assert privilege against the ultimate holding company.