Two recent decisions show the different risks that arise when investigators obtain confidential or privileged material when investigating a suspected fraud. In Bourlakova v Anufriev [2026] EWHC 1747 (Ch), the High Court rejected an attempt to use the iniquity exception to seek access to privileged communications between the claimants, their solicitors and investigators. Eleven days later, in Salinas Pliego v Astor Asset Management 3 Ltd [2026] EWCA Civ 940, the Court of Appeal held that a covert operation targeting the opposing solicitor to obtain privileged information was a serious abuse of process and discharged the claimants’ freezing orders.
The cases turn on different legal questions. Bourlakova concerned whether iniquitous behaviour prevented litigation privilege from attaching to communications about an investigation. Salinas Pliego concerned the court’s response to the way an investigation was conducted. The practical point is connected: defeating an attack on privilege does not prevent the investigation from producing serious consequences elsewhere in the proceedings such as potential loss of equitable remedies, elongated proceedings and additional costs.
Bourlakova v Anufriev: the context of investigations
Bourlakova concerns a dispute over the assets and estate of the late Oleg Bourlakov. The claimants, his widow and daughter, allege that a fraudulent scheme was set up to place assets beyond their reach. The defendants, who include the manager of Mr Bourlakov's family office, his sister and her husband, deny the claims and advance allegations of their own.
The claimants’ solicitors, Mishcon de Reya LLP (MDR), instructed CT Group to investigate matters relevant to the proceedings. Of importance to the decision on iniquity, after the initial instruction, MDR learned that CT Group had obtained material over which the defendants might assert privilege. MDR put in place a process under which potentially privileged material was sent to a separate review counsel, who would not be acting for the claimants. The material in question would be released to MDR or the clients only if counsel concluded that it was not privileged.
MDR also instructed Marengo to follow two of the defendants. When they were seen meeting their lawyer, Marengo was asked to eavesdrop. Marengo recorded the conversation without MDR knowing that it would do so. Marengo had been asked to send its product to review counsel but sent the transcript to MDR in error. The recipient identified what it was and deleted it immediately.
The claimants had intended to rely on a report containing the CT Group’s findings, in support of an application for freezing and proprietary injunctions. However, before the application hearing, there was what the court described as an “extraordinary turn of events.” The defendants served evidence suggesting that many of the documents reproduced in the report appeared to be forgeries. Somewhat surprisingly, the claimants did not contest this and subsequently confirmed that they would no longer be relying on the CT report in support of their application. Following this, the application ultimately derailed and the claimants withdrew their application, agreeing to pay the defendants’ costs on an indemnity basis.
Focus then turned to the manner in which CT Group had gathered the information in its report, with the defendants making an urgent application for further information and delivery up of privileged materials. The court subsequently made the delivery-up, destruction and affidavit orders, but refused some of the wider relief sought. The parties also agreed that the investigators already instructed would not be engaged further.
The investigators' activities prompted a counterclaim by two of the defendants for breach of confidence, misuse of private information and breaches of data protection legislation.
By this separate application, three of the defendants sought declarations, disclosure and information on affidavit concerning otherwise privileged communications with the investigators. They contended that the iniquity exception prevented privilege from attaching to those communications. Four alleged iniquities were relied on: the instruction of CT Group; the provision to CT Group of covert recordings made before proceedings; the use of review counsel; and the instruction to Marengo to eavesdrop.
In reaching the conclusion that none of the alleged iniquities had been established, the court reiterated the governing principles. Fraud or dishonesty is not essential: equivalent underhand conduct in breach of good faith, or contrary to public policy or the interests of justice, may suffice. Where communications with lawyers are in issue, the iniquity must also take the relationship outside the normal scope of the professional engagement, or amount to an abuse of a relationship within it. It is the litigant’s own iniquity that engages the exception, although the conduct of its solicitors and agents may be evidence of that iniquity.
Instructing investigation firms or enquiry agents
It is not automatically iniquitous to instruct investigators to undertake work which might yield confidential information without consent. Richards J considered that a broader rule could have a "chilling effect" on claimants' ability to obtain evidence in fraud investigations.
The instructing party's beliefs about the investigation may also be relevant. Richards J rejected the submission that Barclays Bank plc v Eustice made the claimants’ state of mind irrelevant: a mistaken view of the law does not create privilege where none exists, but what a litigant believed about its agents’ methods could bear on whether its own conduct was iniquitous. On the facts, instructing solicitors to engage investigators to seek confidential information did not take the relationship outside the normal scope of the engagement, nor amount to an abuse of it.
However, eavesdropping on a private and potentially privileged conversation in a public place was unattractive. Instructing Marengo to do so knowing that the opposing lawyer was present reflected “no credit” on those involved. Richards J was not satisfied that a criminal offence had been committed and, although the case was “towards the margin”, held on balance that the conduct did not cross the line into iniquity. The court also rejected the allegation that Marengo had been instructed as part of a process of privilege hunting.
The review counsel process, by contrast, supported the conclusion that the claimants had not intended to obtain privileged material for themselves or MDR. Its purpose was to prevent potentially privileged communications from reaching the clients or the litigation team, and Richards J did not regard that purpose as iniquitous.
The court also rejected the defendants’ case that the discovery of potentially privileged material gave rise to an absolute duty to notify them immediately, return the material and terminate the engagement. Richards J accepted the claimants' stated reason for delaying notification—to avoid prejudicing the freezing-order application—and found that the reason was genuinely held. He expressly left open whether the defendants should nevertheless have been told sooner.
The High Court refused to order disclosure of the privileged communications between the claimants, their solicitors and their investigators, despite the investigators having obtained confidential and potentially privileged material belonging to the defendants.
Although privilege was preserved, the investigators’ activities generated substantial procedural disruption, costly satellite litigation and a counterclaim that remains to be determined.
Salinas Pliego: investigations which go too far
Salinas Pliego also relates to a high-value fraud claim, but the conduct was materially different. The investigator, Black Cube, was engaged to carry out a covert sting operation targeting the defendants’ solicitor. The retainer was entered into by an associated company rather than by the claimants themselves, and the Court of Appeal treated that structure, and the terms of the engagement, as relevant to what the claimants intended and understood.
Posing as a potential client, an operative induced the solicitor, over a video call and two meetings, to reveal confidential and privileged information about the defendants. This included weaknesses in the defendants’ case, their litigation and settlement strategy, and the impact of freezing orders against the defendants. The meetings were secretly recorded, and the recordings were provided to the claimants. Their solicitors at the time had known nothing of the operation and refused to review the material when told about it. They were replaced, and the new legal team relied on the recordings in support of a summary judgment application.
The deputy judge described the conduct as an “affront to justice” and found that the operation was a deliberate and sophisticated scheme conducted with the claimants’ knowledge and for their benefit. He struck out the application for summary judgment but declined to strike out the underlying claim, considering that sanction disproportionate.
What did the Court of Appeal decide in Salinas Pliego?
The Court of Appeal was in no doubt that Black Cube's activities had a very serious impact on the course of proceedings. It held that they led to the breakdown of the relationship between the defendants and their solicitors, meaning the defendants could not proceed with their first choice of legal team. Those activities also led to substantial hearings, costs and significant delays, and took resources away from other litigants in the Commercial Court. Those consequences supplied the connection with the proceedings which a finding of abuse of process requires; it was not necessary to show that a fair trial had become impossible.
It is clear from the judgment that the use of privileged information obtained through deception was a pivotal reason for upholding a finding of abuse of process. As the court put it: “Some things are so obvious that they do not need much analysis.”
The Court of Appeal did not decide whether the iniquity exception applied to the material obtained by Black Cube. Males LJ said there was a real question whether it was engaged at all. That unresolved question did not answer the abuse of process issue. Nor was it an answer to say that the operation should have produced nothing and that responsibility lay with the solicitor who disclosed the information. Extracting that information was the object of the operation.
The court’s object was to protect its own process rather than to punish the claimants; protection includes an element of deterrence, and the response must be proportionate. It therefore rejected creating a special rule under which privilege hunting would automatically require strike-out. It pointed to other serious abuses, including the deliberate suppression of disclosable documents, dishonest exaggeration, perjury and unlawful hacking, which do not invariably result in strike-out. Those considerations supported a proportionate and flexible response rather than an automatic rule requiring strike-out. The court also recognised the public interest in ensuring that fraud is exposed and that wrongdoers do not retain the proceeds of fraud.
Although striking out the claim was not appropriate, the Court of Appeal discharged the freezing orders the claimants had previously obtained, potentially impairing their ability to recover assets following trial. The effect was to remove the benefit of interim relief while leaving the underlying claim to be determined at trial.
The claim survived, but the consequences may not end there. If the claimants establish their case at trial, it will be for the trial judge, after fuller disclosure and cross-examination, to decide whether and to what extent the abuse should affect any entitlement to equitable or discretionary relief, including the proprietary claim, interest and costs.
Practical implications
There may be legitimate reasons to instruct investigators, particularly where fraud or asset dissipation is suspected. However, an investigator is not a route around the rules governing privilege, confidentiality and the proper conduct of litigation.
Solicitors should take the following precautions when investigators are instructed:
- defining the objective, specific limits and prohibited methods in writing. In Bourlakova there was no express term forbidding CT Group from targeting privileged communications. A general instruction to act lawfully may not provide sufficient guidance.
- carrying out due diligence on investigators and recording the information provided about methods and sources;
- deciding in advance how potentially privileged material will be quarantined and reviewed if it arrives;
- if potentially privileged material is received unexpectedly, stopping its circulation, restricting access, establishing how it was obtained and taking immediate advice on privilege, confidentiality, use, notification and any regulatory consequences;
- ensuring that any screening arrangement is genuinely independent of the litigation team and has a clearly defined remit; and
- ensuring the litigation team is told about investigations commissioned by the client or elsewhere in its corporate group. Using another entity will not stop the court examining what was done on the litigant’s behalf.
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