The iniquity exception does not bite merely because a claimant instructed enquiry agents who ended up holding the other side’s confidential material. In Bourlakova v Anufriev [2026] EWHC 1747 (Ch), Richards J dismissed an application to strip privilege from those instructions, and he did so on grounds that give civil fraud teams a workable boundary.
What did the court actually decide?
Judgment was handed down on 10 July 2026 in litigation over assets worth more than US$3bn generated by the late Russian businessman Oleg Bourlakov. The sixth to eighth defendants applied for declarations, disclosure and information on affidavit relating to communications with the private investigators the claimants had instructed, their case being that the claimants had accessed their confidential and privileged information on an industrial scale over five years, so that the iniquity exception prevented privilege attaching to any of it.
Richards J identified four separate alleged iniquities: instructing the investigators CT Group, passing them covert recordings made at the family home in Monaco, instructing separate review counsel to filter privileged material, and instructing a second firm to eavesdrop on a conversation in a Marylebone bar. None was established, at [194], and the application was dismissed.
The reasoning matters more than the result, because two propositions were rejected outright and both had been argued as rules of law rather than as conclusions on these facts.
Is instructing an enquiry agent iniquitous in itself?
No. The applicants argued for what the judge called per se iniquity: that setting in motion a process which could be expected to yield another party’s confidential information, without consent, is inherently iniquitous whatever the instructing party believed. Richards J declined both to find that authority established such a rule and to create one.
His reason at [168] is the passage practitioners will cite. The law does not protect confidentiality in documents that comment on or reveal iniquity, but a claimant will seldom be able to show iniquity before trial and needs documentary evidence to get there, in circumstances where a defendant who has in fact done what is alleged might be expected to conceal rather than volunteer it. A rule of the kind contended for would risk a chilling effect on the ability of claimants to obtain evidence in cases of suspected fraud. He accepted that claimants cannot have free rein simply by asserting suspicion, but held per se iniquity a disproportionate answer.
The authorities relied on were each narrowed in turn. Imerman v Tchenguiz [2011] Fam 116 is a confidentiality case rather than an iniquity exception case, so it establishes that the counterclaim might succeed, not that privilege never attached.
How much does the client’s belief matter?
A great deal, and this is the second doctrinal move. The applicants said Barclays Bank v Eustice [1995] 1 WLR 1238 made beliefs about lawfulness irrelevant, and that the point was binding. Richards J read Eustice more narrowly, at [32] to [35]. Schiemann LJ had not held that a client’s beliefs are irrelevant in all cases; he had held that on those facts a genuine belief that the planning worked did not keep the relationship with the solicitors inside the ordinary run.
Beliefs are relevant in two ways. They bear on whether there is iniquity at all, because iniquity extends to underhand conduct in breach of a duty of good faith. They also bear on whether the relationship falls within the ordinary run of a professional engagement, the touchstone drawn from Al Sadeq v Dechert [2024] KB 1038 at [58].
Applying that, the judge found that the claimants and Mishcon de Reya believed the investigations were lawful, and believed that privileged material reaching the investigators came from a whistleblower rather than from hacking. He declined to decide whether CT Group had in fact hacked anything, holding at [148] that a finding of that seriousness could not fairly be made on the papers against a firm not represented at the hearing.
Note what the exception does not require. Following Al Sadeq at [55], iniquity needs neither fraud nor dishonesty; underhand conduct contrary to public policy or the interests of justice will do. The interlocutory standard is the balance of probabilities.
What separates this from privilege hunting?
Eleven days later the Court of Appeal decided Pliego v Astor Asset Management 3 Ltd [2026] EWCA Civ 940, where the claimants had engaged Black Cube to run a covert sting on the defendants’ solicitor, who was induced to attend meetings in Amsterdam and disclose litigation and settlement strategy. Males LJ described obtaining privileged information by suborning the other side’s solicitor as a form of corruption, held the conduct a very serious abuse of process, and discharged the worldwide freezing orders, though the underlying fraud claim was not struck out.
Richards J had already distinguished the first instance decision in Pliego, at [166], on the basis that the litigant there was itself closely involved in an operation designed to induce an opponent’s solicitor to give up information. That is the line. A process aimed at gathering evidence, which incidentally captures privileged material the instructing party then takes steps not to see, sits on one side of it. An operation targeted at the opponent’s lawyer sits on the other.
The margin is narrower than the outcome suggests. Richards J described the eavesdropping on a conversation known to involve the defendants’ lawyer as reflecting no credit on either the claimants or their solicitors, found that allegation to be towards the margin, and described the covert recordings as underhand and made in full knowledge that they were likely to capture privileged material. This is a dismissal with reservations, not an endorsement.
What should firms do now?
The architecture that saved the claimants is set out in the judgment and can be copied. Contractual terms required the agents to comply with English law and, expressly, with the Court of Appeal’s judgment in Imerman. When it emerged in August 2023 that privileged material was reaching the investigators, separate review counsel were instructed on terms that they would never act for the claimants in the dispute, and material they flagged as potentially privileged never reached the solicitors at all.
The judge held at [181] that this was not iniquitous, citing Hollander on Documentary Evidence for the proposition that instructing different lawyers to review disputed material may be the prudent course, and he rejected the argument that an absolute duty arose to notify the other side and terminate the retainer the moment privileged material surfaced.
Scale explains why the administrative cost is worth carrying. CT Group’s Norwich Pharmacal disclosure produced 2,039 potentially relevant documents, of which only 178 were disclosed, with privilege asserted over the remaining 1,861, and that is the volume at stake on one interlocutory application in a case listed for trial in October 2027.
The cautionary half of the judgment is the investigators’ report itself. Tendered as evidence on a freezing order application issued in January 2024, it was met almost immediately with the assertion that much of the underlying documentation was forged, and the application was withdrawn with costs paid on an indemnity basis. Privilege survived; the evidence did not.
Instructing enquiry agents does not, on its own, cost you privilege in the communications about that instruction. What the court examines is whether the conduct falls outside the ordinary run of cases, and it will look at what the client and the firm actually believed about the lawfulness of the agents’ methods. That belief has to be reasonable and, in practice, documented through retainer terms and contemporaneous records. A deliberate operation to extract an opponent’s privileged strategy is a different thing entirely, capable of being an abuse of process serious enough to cost a freezing order.
The two judgments compared
| Bourlakova v Anufriev | Pliego v Astor | |
|---|---|---|
| Court and date | High Court (Ch), 10 July 2026 | Court of Appeal, 21 July 2026 |
| Target of the investigation | The opposing parties | The opposing party’s solicitor |
| Instructing party’s role | General instructions, methods left to the agents | Closely involved in the operation |
| Handling of privileged material | Segregated via independent review counsel | Reviewed, with waiver wrongly assumed |
| Outcome | Application dismissed, privilege upheld | Serious abuse of process, freezing orders discharged |
For the procedural counterpart, see our coverage of pre-action disclosure under CPR 31.16, where every threshold condition was met and the application still failed, and the accompanying guide to when the court will order it. On how investigative material should be handled once it reaches the firm, see our disappearing messages and disclosure guide.