The Financial Reporting Council v Sports Direct International plc
18 February 2020
The Court of Appeal has today partially allowed Sports Direct’s appeal against the judgment of Mr Justice Arnold in relation to the provision of privileged material to the FRC.
The court decided that the recipient of a notice by the FRC requesting information under the Statutory Auditors and Third Country Auditors Regulations 2016 (SATCAR) is not required to produce legally privileged documents. This decision applies whether the person entitled to the privilege is the auditor under investigation or the audited entity. This decision reverses the previous decision of the High Court which was reported on here.
The Court of Appeal upheld the decision of the High Court that, where a request is made under SATCAR for emails and their attachments, the fact that the email may be privileged does not automatically mean that the attachment is privileged. Non-privileged attachments therefore need to be provided to the regulator.