In Brief: October 2018
Legal professional privilege: where are we now?
In broad terms Part 31 of the Civil Procedure Rules outlines civil litigants’ duties to disclose (to the other parties) documents that are or have been in their control and are relevant to the issues in dispute.
The Criminal Procedure and Investigations Act 1996 (as amended) (CPIA), the CPIA Code of Practice, and Part 15 of the Criminal Procedure Rules (along with guidelines issued by the Attorney General and relevant judicial protocol) outline the disclosure duties of the prosecution and the defence in criminal proceedings.
Litigants are however not generally under a duty to disclose “privileged” documents to one another. As such it is important to understand the different forms of legal professional privilege (LPP) and how LPP applies to documents produced in, or arising out of client matters.
Forms and key features of LPP
There are two main forms of LPP in English law, (1) legal advice privilege, and (2) litigation privilege.
Legal advice privilege applies to confidential communications between legal advisers and clients for the purpose of giving or receiving “legal advice as to what should prudently and sensibly be done in the relevant legal context” (Balabel1, Taylor L.J.).
Legal advisers’ working papers which have “some attribute or addition which would betray, or give a clue as to the trend of advice being given” will also attract legal advice privilege (The RBS Rights Issue Litigation (“RBS”)2, Hildyard J).
Litigation privilege applies to confidential communications between (1) legal advisers or their clients and (2) third parties, where the sole or dominant purpose is the provision of legal advice in relation to actual or contemplated litigation.
Common features: confidential communications
Confidential Documents arising out of a lawyer/client relationship are presumed confidential. Confidentially can however be waived, sometimes inadvertently (eg. where the documents fall into the public domain). Where confidentiality is waived “there can be no question of legal advice privilege arising” (confidentiality being a necessary ingredient of both forms of LPP) (Three Rivers (No 5)3, Scott L.J.).
The courts have adopted a wide definition of the types of document that may be considered communications for the purposes of LPP. This extends to ‘notes and memoranda’ (Three Rivers (No 5), Scott L.J.).
It is not an absolute requirement for a client to have communicated a document to his legal adviser for that document to attract legal advice privilege. The key question is whether the document was prepared for communicating with a legal adviser for the purpose of obtaining legal advice (Three Rivers (No 5), Longmore L.J.).
Further legal advisers’ working papers will attract legal advice privilege, notwithstanding that they are not communicated to the client (subject to the document giving a clue as to the trend of advice being given). As was noted in Ainsworth4 the “important point… is that notes or memoranda made by the solicitor are placed on the same footing as communications between the solicitor and the client”.
Legal advice privilege: the client
Legal advice privilege only applies to confidential communications between legal advisers and their clients. As such it is crucial for legal advisers to understand who constitutes the “client” for the purposes of legal advice privilege.
In Three Rivers (No 5) the court restricted the definition of the client to just three Bank of England employees who were responsible for providing instructions to the bank’s solicitors. This narrow definition was also applied in Astex, in which the court dismissed Astrazeneca’s assertion that attendance notes of interviews between in-house counsel and employees were covered by legal advice privilege.
The definition of the client was also considered in detail in RBS. In RBS shareholders issued a class action against the bank following its share collapse in 2008. In the course of the proceedings the claimants sought disclosure of records of interviews between RBS’s legal advisers (both external and internal) and employees of the bank. RBS resisted disclosure, claiming legal advice privilege. Applying Three Rivers (No) 5 the court held that the definition of the client for the purposes of legal advice privilege was confined to those individuals authorised to receive legal advice on behalf of the bank. The definition of client did not extend to employees who were authorised to provide the bank’s legal advisers with information. Note that in SFO –v- ENRC 5 the Court of Appeal expressed the view that the definition of “client” should now be extended for the purposes of legal advice privilege to include other employees of the client (although, as the Court of Appeal is bound by previous decisions, that is a matter for the Supreme Court to consider).
Note that a lawyer/client communication is not a requirement for the purposes of litigation privilege. As such the definition of the client is not generally a concern when claiming litigation privilege.
Legal advice privilege: the legal adviser, the advice given and the purpose of the advice
Because legal advice privilege only applies to confidential communications between legal advisers and their clients, the definition of the “legal adviser” is also important. This was considered in R (on the application of Prudential plc) v Special Commissioner of Income Tax6 in which the Supreme Court observed that members of the legal profession “includes members of the Bar, the Law Society, and the Chartered Institute of Legal Executives (CILEX) (and, by extension, foreign lawyers). That is plain from a number of sources, which speak with a consistent voice” (per Neuberger L.J.).
As such solicitors, trainee solicitors, junior staff, barristers, pupil barristers, foreign lawyers and in-house counsel all constitute legal advisers for the purposes of legal advice privilege. Junior law firm staff will in all likelihood also come within the definition of members of the legal profession, so long as they are supervised in line with Law Society requirements.
Further, as was noted in Balabel, in order to attract legal advice privilege the confidential communication has to be for the purpose of giving or receiving “legal advice as to what should prudently and sensibly be done in the relevant legal context”. This is particularly important for in-house lawyers who should note that certain communications made in the course of their work may not attract legal advice privilege (eg. where the communication relates to the in-house lawyer’s functions outside of giving legal advice).
More generally, it is not sufficient that the confidential communication relates to the law; the communication must contain legal advice. In SFO –v- ENRC 7 the court held that a verbatim note of an interview between a solicitor and an employee is not a privileged document ‘just because the solicitor has interviewed the witness with a view to using the information that the witness provides as a basis for advising his client’ (per Andrews J).
Litigation privilege: actual or reasonably contemplated litigation
Litigation privilege will not arise unless adversarial proceedings are underway or at least reasonably contemplated at the time the document in respect of which privilege is asserted is created. “Adversarial proceedings” include employment tribunal and arbitration proceedings (Tesco Stores8), but do not extend to disciplinary, grievance or fact finding proceedings (Three Rivers No 69).
Where litigation has not been commenced at the time of the communication, “it has to be ‘reasonably in prospect’; this does not require the prospect of litigation to be greater than 50% but it must be more than a mere possibility” (Tchenguiz10, Elder J). A “distinct possibility [or] general apprehension of future litigation” is not sufficient (USA –V- Philip Morris Inc11, Brooke L.J.).
A party cannot “simply self certify” that litigation was reasonably contemplated at the time the documents were created. Unless the position is obvious (eg. following receipt of a pre-action letter) “some evidence may be needed to assist the court in making a determination” (Astex v Therapeutics Ltd v Astrazeneca12). The threshold is likely to be higher in respect of contemplated criminal proceedings, where the CPS would require sufficient evidence to meet the public interest test before taking the decision to prosecute (SFO).
A delay of nearly a year between the production of the document and the commencement of litigation indicated “strongly against any suggestion that litigation was reasonably in prospect” when the document was created (Rawlinson and Hunter Trustees SA13, Tomlinson L.J.).
In Bilta (UK) Ltd v Royal Bank of Scotland Plc14 the court held that a letter from HMRC asserting grounds to deny RBS a VAT claim of nearly £90m was analogous to a letter before claim. The court described HMRC’s letter as a “watershed” and found that RBS’s response (instructing specialist tax litigators) suggested the bank “anticipated a claim and was gearing up to defend it”.
Litigation Privilege: sole or dominant purpose
For litigation privilege to arise, the document must be prepared for the sole or dominant purpose of actual or reasonably contemplated litigation.
The “dominant purpose test” was devised by the House of Lords in the case of Waugh v British Railways Board15. In Waugh the plaintiff sought disclosure of a joint inquiry report prepared by the defendant following an accident that resulted in the plaintiff’s husband’s death. The report, which contained witness statements, was prepared for a dual purpose, being (1) railway operation and safety, and (2) to obtain legal advice in respect of anticipated litigation. The court considered whether the second purpose was sufficient to support a claim of litigation privilege. The court held that the best test was one of “dominant purpose”. On the facts the court found that the purposes for preparing the report were of “equal weight or rank”. Accordingly the defendant was not able to claim litigation privilege in respect of the report.
The courts will consider the question of dominant purpose ‘from an objective standpoint’ with regard to “the deponent’s analysis of the purpose” (Rawlinson). There is a high evidential threshold and “a mere claim in evidence… will not be decisive” (Rawlinson). Indeed in Tchenguiz Elder J rejected joint liquidators’ claim that reports establishing an Icelandic bank’s collapse were privileged, even though it was accepted that the reports had enabled solicitors to advise on potential litigation.
In Property Alliance Group16 the defendant sought disclosure of records of meetings between the claimant and former employees. It was accepted that the claimant’s purpose for meeting with the former employees was to assist in the litigation against RBS. The claimant had however informed the former employees that the purpose of the meeting was to discuss new business opportunities. As such the former employees had been deceived as to the real purpose of the meetings. Applying the objective test the court found that there were “two clear but entirely divergent purposes” for the meetings. As such the claimant failed to meet the dominant purpose test.
Further, in SFO –v- ENRC  the court distinguished documents produced for the purpose of obtaining advice on how to avoid contemplated litigation, from documents produced for the purpose of obtaining advice as to the conduct of litigation. In that case the High Court found that ENRC did not meet the dominant purpose test. The decision was however overturned by the Court of Appeal which found, on the facts, that ENRC’s solicitors had interviewed staff for the dominant purpose of avoiding legal proceedings that were reasonably contemplated5.
Paul Fuller is a Solicitor Advocate at Hadfield Bull & Bull.
Please contact 0208 301 0808 or email email@example.com to discuss any commercial or civil matters with Paul.
- Balabel v Air India  Ch. 317
- The RBS Rights Issue Litigation  EWHC 3161
- Three Rivers District Council and others v Governor and Company of the Bank of England (No 5) –  All ER (D) 176 (Nov)
- Ainsworth v Wilding  2 Ch 315
- SFO –v- ENRC  EWCA Civ 2006
- R (on the application of Prudential plc and another) (Appellants) v Special Commissioner of Income Tax and another (Respondents)  UKSC 1
- The Director of the SFO v Eurasian Natural Resources Corporation Limited  EWHC 1017
- Tesco Stores Ltd v Office of Fair Trading  CAT6
- Three Rivers District Council v Bank of England (No 6)  4 All ER 948
- Tchenguiz v Director of the SFO  EWHC 2297 (QB).
- USA -v- Philip Morris Inc. and British American Tobacco (Investments) Ltd  All ER (D) 191 (Dec)
- Astex v Therapeutics Ltd v Astrazeneca AB  EWHC 2759 (CH)
- Rawlinson and Hunter Trustees SA v Akers  All ER (D) 200 Feb
- Bilta (UK) Ltd v Royal Bank of Scotland Plc.  EWHC 353
- Waugh v British Railways Board  AC 521 (HL)
- Property Alliance Group Limited v Royal Bank of Scotland Plc  EWCA Civ 355