High Court Rejects Privilege Challenge Over Private Investigators

High Court Rejects Privilege Challenge Over Private Investigators

Fraud litigation has a problem built into it. The person accused of hiding assets is rarely willing to explain where they went. A claimant may therefore need an enquiry agent to uncover evidence that would never be volunteered. That can create a second dispute over how it was obtained and whether the investigation communications must be disclosed.

A recent High Court judgment refused to treat obtaining information without consent as automatically “iniquitous”, or as conduct that prevented legal professional privilege from arising. Such a rule could have a “chilling effect” on fraud investigations. A Court of Appeal decision days later shows the limit: investigators can support litigation, but hunting for an opponent’s privileged legal strategy is another matter.

The US$3 billion dispute behind the judgment

Bourlakova v Anufriev [2026] EWHC 1747 (Ch) arose from a dispute over more than US$3 billion connected with Russian businessman Oleg Bourlakov. His widow and daughter brought claims involving alleged fraud, forged documents and concealed assets. Their solicitors instructed enquiry agents, principally CT Group and, for one operation, Marengo.

The opposing parties alleged that confidential and privileged information had been obtained “on an industrial scale”, including through email hacking and covert recordings. They sought disclosure of the investigators’ communications under the iniquity exception.

Why the High Court rejected an automatic rule

Litigation privilege can protect communications with investigators where litigation is reasonably contemplated and their dominant purpose is obtaining evidence, information or advice for it. The iniquity exception prevents privilege attaching to communications furthering fraud, crime or equivalent underhand conduct.

The applicants argued that setting out to obtain confidential information without the subject’s consent was itself iniquitous. Mr Justice Richards disagreed. Fraud investigations often exist because evidence is being withheld. Requiring an alleged fraudster’s agreement before looking for it would make investigation impossible when it was most necessary.

That did not give the claimants free rein. The court examined what they and their solicitors believed and intended. They had retained a reputable firm, received assurances about lawful conduct and had not instructed it to target privileged communications. When such material emerged, separate review counsel prevented the litigation team from seeing it. None of the alleged iniquities was established.

The judgment did not approve every tactic

The court separated the investigators’ methods from the claimants’ belief that the work was lawful. It did not decide that everything allegedly done was legitimate. Claims for breach of confidence, misuse of private information and data protection breaches remain matters for trial.

Nor was the judge comfortable with everything he examined. Marengo had followed two opponents and listened to a hotel bar conversation attended by their lawyer. Mr Justice Richards called the eavesdropping “unattractive” and said the instruction reflected no credit on the claimants or their solicitors. It was close to the margin, but did not cross into iniquity on the evidence before him.

A tactic can therefore fall short of defeating privilege while still creating confidentiality, privacy, data protection or regulatory problems. The result should not be mistaken for a finding that every part of the investigation was vindicated.

Privilege hunting sits on the other side of the line

That boundary became clearer in Salinas Pliego v Astor Asset Management 3 Ltd [2026] EWCA Civ 940. Investigators posed as representatives of a potential client and induced the defendants’ solicitor to reveal litigation strategy, weaknesses in the defence and the effect of freezing orders. The secretly recorded material was used to support a summary judgment application.

The Court of Appeal found this deliberate “privilege hunting” to be a serious abuse of process. It upheld the refusal of summary judgment, discharged the claimants’ worldwide freezing orders and warned that such an operation “should have no place” in litigation in England and Wales.

The distinction is not simply between open and covert investigation. Legitimate enquiries often take place without alerting the subject. The real questions are what the investigator was asked to obtain and how. Searching lawfully for evidence of suspected fraud supports the litigation process. Deceiving the opposing solicitor to extract privileged strategy attacks it.

The instruction matters as much as the result

Both judgments make the paper trail important. As explained in our guide to what a solicitor can lawfully ask a private investigator to do, written instructions should identify the evidence sought, set a proportionate scope and prohibit hacking, blagging, trespass, impersonation and targeting privileged material. They should record the data protection basis, sources and methods, with approval required for any change of scope.

There should be a plan for unexpected privileged material before it arrives. The SRA Code of Conduct prohibits complicity in misleading the court and the misuse of evidence. The ICO-approved ABI UK GDPR Code of Conduct gives investigators a practical framework for lawful bases, impact assessments and their responsibilities to clients.

Protection for lawful investigation, not a blank cheque

Bourlakova protects a claimant’s ability to investigate suspected fraud without first securing the subject’s permission. It also makes the commissioning party’s knowledge, intentions and safeguards central. Fraud investigations cannot depend on cooperation from the people being investigated, but they must still withstand scrutiny from the court.

Frequently Asked Questions

Are communications with a private investigator legally privileged?

They can be where litigation is reasonably in prospect and their dominant purpose is obtaining evidence, information or advice for it. Privilege does not automatically cover everything an investigator finds.

Does investigating someone without consent remove privilege?

No. The High Court rejected that general rule. The purpose and methods of the investigation, the commissioning party’s intentions and the safeguards used must all be examined.

What should solicitors include in an investigator’s retainer?

A legitimate objective, a proportionate scope, prohibited methods, data protection responsibilities, reliable source records and a procedure for isolating unexpected privileged material.