In another instalment of the Scottish Lion saga (see our previous blog entries here, here and here) the Outer House of the Court of Session (the Scottish First Instance Court) has ruled that where a scheme creditor submits documents in support of his claim for voting purposes at the creditors’ meeting convened to approve a scheme of arrangement, he is deemed to have waived any privilege there might have been in such documents.

Production of the relevant documents was originally ordered in July 2009, soon after the first ruling by the Scottish Court (which was not contested in the appeal) that the court could examine the valuation of all the votes. Privilege was claimed under various heads, including legal advice privilege, litigation privilege and attorney work product privilege, soon afterwards and the issue of waiver was decided as a preliminary point in July 2010, notwithstanding the sale of Scottish Lion to Berkshire Hathaway earlier this year.

The documents were held by the Court to have been submitted in what amounts to a court process which is always potentially adversarial; the value fixed for voting purposes goes to both the discretion of the court and the jurisdictional issue of whether the requisite majority in value has been attained. The jurisdictional issue is a matter which is open to challenge by any scheme creditor and where there is a challenge to the voting process, documents submitted by all creditors who vote must be available to all the parties to the process. If part of a document contains privileged material it is not possible to claim privilege for that part and seek to rely on the remainder of the document. In such circumstances the privilege is waived in respect of the whole document.