How strong a case of fraud is necessary to defeat a claim for legal professional privilege?

In Buttes Gas & Oil v. Hammer (No. 3), [1980] 3 All E.R. 475 (Eng. C.A.), Lord Denning M.R. stated at p. 486: No privilege can be invoked so as to cover up fraud or iniquity. But this principle must not be carried too far. No person faced with an allegation of fraud could safely ask for legal advice. To do away with the privilege at the discovery stage there must be strong evidence of fraud such that the court can say: ‘This is such an obvious fraud that he should not be allowed to shelter behind the cloak of privilege.’ The judge was not prepared so to hold in this case. Nor am I. and further at p. 490: So far as fraud was concerned, McNeill J. said: I should be surprised if a jury, bearing in mind that fraudulent conspiracy is also a criminal offence, found the plaintiff company guilty on the evidence which is presently available. Indeed, I regard the allegation of fraud as no more than the key to an intended fishing operation, to be carried out in the hope that discovery of otherwise privileged documents will produce some peg on which the defendants could seek to justify and to sustain the counterclaim. I respectfully agree and find it unnecessary to express any view on how strong a prima facie case of fraud is necessary to defeat a claim for disclosure based on legal professional privilege, but something exceptional is called for.

In O’Rourke v. Darbishire, [1920] All E.R. Rep. 1 (U.K. H.L.), Viscount Finlay stated at p. 6: The appellant also relied on the proposition that no privilege comes into existence with regard to communications made in order to get advice for the purpose of carrying out a fraud. This is clear law, and if such guilty purpose was in the client’s mind when he sought the solicitor’s advice, professional privilege is out of the question. But it is not enough to allege fraud. If the communications to the solicitor were for the purpose of obtaining professional advice, there must be, in order to get rid of privilege, not merely an allegation that they were made for the purpose of getting advice for the commission of a fraud, but there must be something to give colour to the charge. The statement must be made in clear and definite terms, and there must further be some prima facie evidence that it has some foundation in fact. It is with reference to cases of this kind that it can be correctly said that the court has a discretion as to ordering inspection of documents. It is obvious that it would be absurd to say that the privilege could be got rid of merely by making a charge of fraud. The court will exercise its discretion not merely as to the terms in which the allegation is made, but also as to the surrounding circumstances, for the purposes of seeing whether the charge is made honestly and with sufficient probability of its truth to make it right to disallow the privilege of professional communications. In the present case it seems to me clear that the appellant has not shown such a prima facie case as would make right to treat the claim of professional privilege as unfounded.