Effect of Company Dissolution on Legal Privilege: Addlesee v Dentons Europe [2018] EWHC 3010 (Ch)

In the recent case of Addlesee v Dentons Europe [2018] EWHC 3010 (Ch), the High Court considered whether the act of dissolving a company has the knock-on effect of removing legal professional privilege.

In this case, the claimant made an application, seeking a court declaration that documents, held by a dissolved company, did not remain subject to privilege. Further, that these documents should be disclosed by the defendant.

The basis of the claimant’s application was that a dissolved company does not technically exist. As such, it cannot own property or have the benefit of any rights. It also has no successor in title to take the benefit of its privilege.

Master Clark disagreed with the defendant’s submission that there was no basis in principle, or on the authorities, for the existence of an ‘inchoate right’ of privilege.

However, the Master went on to contemplate whether ‘the court should have regard to the fact that the Company could, as a matter of law, be restored’. In personal injury proceedings, restoration of a company to the register can be achieved under s.1030 of the Companies Act 2006:

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The effect of restoration is to put the dissolved company into the same position as if it had not been dissolved – see s.1032:

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Master Clark hypothesised that, if an application to restore the company to the register had been made:

‘... the court would then, in my judgment, be bound to protect the privilege which was about to be revested in the Company ... Not enforcing the privilege means contemplating the position where, having been restored to the register and otherwise placed in the position it was before dissolution, the privilege to which the Company should then be entitled would be irretrievably lost’.

Consequently, the claimant’s application was dismissed and the Master was able to conclude, at paragraph 49:

‘In my judgment, the policy considerations (considered above) underlying the principle "once privileged, always privileged" compel the court to maintain the privilege, unless and until there is no prospect of the privilege being enforced by the person entitled to it’.

Full text judgment can be accessed here.