Assuming the High Court's view stands on the extent to which Legal Professional Privilege (LPP) can be claimed in relation to the products of internal investigations, it will have significant consequences for internal investigations where firms uncover potential illegality by its staff.

The judgment, relating to Serious Fraud Office (SFO) v ENRC [2017] ECHR 1017, renders a whole raft of documents generated within the course of an internal investigation potentially disclosable to the Serious Fraud Office (SFO), including statements from witnesses, interviews and reports and it would also encompass audit reports from forensic accountants.

Many have raised concerns that this could be a disincentive to investigate, however there are several avenues to consider that may help to ensure internal investigations remain an appropriate option.

The first is to ensure that all communications between lawyers and staff are conducted with only those authorised to seek and receive legal advice on behalf of the member; General Counsel or the Board for example.

The second is to consider very carefully the timing of the appointment of investigators. When assessing LPP, the court will consider whether a prosecution was thought likely by the firm and/or whether there was thought to be any substance to allegations made. A firm may therefore want to make a preliminary evaluation and document it for the purposes of seeking legal advice. In the case of ENRC, the allegations were unverified.

It is important also to fully document the purpose of any internal investigation. Documents created as part of an effort to build a defence in the event of impending criminal proceedings are more likely to attract LPP than those created to dissuade the SFO from taking action in the first place. That said, if the primary and dominant purpose is to build a defence, the product may be used for an ancillary purpose of seeking to dissuade action.

Either way, the judgement may ultimately drive perverse outcomes, and adversely impact on the Deferred Prosecution Agreements (DPA) scheme. Early engagement, co-operation (including the provision of investigation reports) and an effective compliance programme are all factors listed in the Code of Practice that militate in favour of a DPA. Caution over the instruction of investigators owing to concerns about whether LPP will apply for lawyers has the potential to delay the point at which allegations can be verified and, counter-intuitively, make DPAs less likely.

When allegations come to light, the time to act is often short. Firms would be well advised to ensure they have the right processes in place to safeguard their position early - while there needs to be a wider debate over whether making DPAs less likely is a desirable policy outcome.