Legal professional privilege in the spotlight again

August 19, 2020

This article was first published by Estates Gazette. 

By Bill Hanbury

Legal professional privilege continues to cause confusion both as to its scope and its application to particular classes of documents. Two recent Court of Appeal decisions help to illuminate this area of the law and to answer two crucial questions:

1. To what extent is the test for legal advice privilege different from the test for litigation privilege?
2. To what extent can a confidential document emanating from a non-lawyer containing legal advice be privileged?

The latter question is particularly important in the modern commercial environment where a document might emanate from one department of a large company but may be considered by several different departments within that organisation, including the legal department.

Most of the recent case law has arisen in commercial litigation:

• Raiffeisen Bank International AG v Asia Coal Energy Ventures Ltd [2020] EWCA Civ 11, which involved a share sale and purchase agreement in which a finance company and external solicitors were involved; and
• R (on the application of Jet2.com Ltd) v Civil Aviation Authority [2020] EWCA Civ 35, which involved a “commercial” judicial review of a decision of the CAA, a public authority, and whether it had to disclose certain press releases.

The scope of legal professional privilege is less often argued about in property disputes. In part, this is because there remains some confusion as to the scope of legal professional privilege and because there is a significant pressure on litigants to limit their disclosure requests. In the court system, the Disclosure Pilot for the Business and Property Courts (PD 51U), which continues until January 2021, requires users of the Business and Property Courts to attempt to agree the scope of disclosure where possible. In the First-tier Property Tribunal, where many disputes concerning the extent of title and related issues are now determined, it is rare for the parties to argue over disclosure for fear of the costs consequences of doing so. Such applications are determined as preliminary issues usually on paper and are not particularly well suited to complex legal argument. In many cases it is the client’s wish to concentrate his resources on the “main show” and not expend money at the disclosure stage.

However, disclosure is crucial to the outcome of much litigation and this is no less so in property litigation, as the following example shows:

A purchaser buys a parcel of land on the strength of a survey report which reveals that the boundary of the land is not along the fence between the site to be acquired and the adjoining site, which is shown by the Land Registry as the general boundary, but along the wall of the building standing on the site. The survey should be a disclosable document, which would fundamentally undermine any claim that the purchaser was reasonably mistaken as to the boundary position for the purposes of the defence created by paragraph 5 of schedule 6 of the Land Registration Act 2002. That paragraph provides a number of defences which may be met to defeat an application by the registered proprietor to recover possession.

But:

(a) Would it make any difference that the same advice was given by the purchaser’s solicitor and why?

(b) What if the solicitor gave the advice but passed it on to the agent who passed it on to the client?

It is worth noting in passing that Article 8 of the European Convention on Human Rights, which protects private correspondence, is a qualified right and does not provide the absolute protection of confidential communications that the English common law does to lawyers.

So that legal advisers are confident in relation to these issues, they need to be aware of the parameters of legal professional privilege. The remainder of this article explains why serious thought should be given to a blanket claim to privilege and points out some of the problems with the law post Jet 2.

Legal advice privilege and litigation privilege compared

Legal professional privilege is not to be confused with without prejudice privilege, which applies solely to documents or communications coming about for the purposes of achieving a settlement of a dispute. It has two branches – legal advice privilege, which provides absolute protection to a person who seeks legal advice on an issue, and litigation privilege, where the purpose of the person seeking advice is actual or contemplated litigation.

Both legal advice privilege and litigation privilege are seen as closely allied branches of legal professional privilege or even as “integral parts of the same privilege” (Re L (a minor) (Police Investigation: Privilege) [1997] AC 16 at 33E, per Lord Nichols).

What they have in common as forms of privilege is that:

(a) The right to claim privilege is seen as a fundamental constitutional right. Hence, legal professional privilege is regarded as absolute. It is not to be abrogated even, in some cases, by the enforcement of the criminal law, although privilege cannot be used to further crime or wrongdoing (Addlesee v Dentons Europe LLP [2020] EWHC 238 (Ch)). If privilege is successfully claimed, communications of any type, whether written or oral, would be protected from disclosure. It even survives the client’s death in certain circumstances (Bullivant v Attorney General for Victoria [1901] AC 196).

(b) Privilege of the two types under discussion is not simply a rule of evidence that may be raised in court proceedings but may be claimed by a client to resist investigation in certain circumstances by statutory authorities including the police. “Communications” are extremely widely interpreted to include, for example, a list of email addresses/contact details of the client held by his solicitor (as in JSC BTA Bank v Ablyasov [2012] EWHC 1252) (see Privilege and investigations: the lowdown, 24 January 2019).

(c) The right to claim a document is privileged belongs to the client not the lawyer. The lawyer has to keep the privileged documents confidential, in certain circumstances even where disclosure of them would assist him in meeting criticisms by the client or a third party in relation to his conduct of the client’s affairs (see Medcalf v Mardell [2003] 1 AC 120). The circumstances where privilege is said to have been waived by the client, in the absence of express waiver, will be limited.

Turning to the two questions posed above.

1. To what extent is the test for legal advice privilege distinguished from the test for litigation privilege?

The Court of Appeal, while noting the conflicting authorities on the point, nevertheless confirmed in Jet 2 that the “dominant purpose” test applies to both types of legal professional privilege. Hickinbottom LJ adopted the following summary of that test from the judge at first instance whose decision was appealed:

“whether the communication or document was brought into existence with the dominant purpose of it or its contents being used to obtain legal advice”.

The documents the court was concerned with there were press releases and correspondence issued by the CAA which, the court found, plainly had not come into existence for the purposes of taking legal advice. Thus, they were not capable of attracting legal advice privilege. However, the court also considered privilege and the extent of legal advice privilege in the modern context.

2. Are communications emanating from non-lawyers privileged?

It is not uncommon for a document to emanate from, say, the in-house surveyor of a company but be circulated to different people for a commercial decision taking account of the commercial risks of entering the transaction as well as the legal pitfalls. These are all part of the same process of appraisal that a company is expected to go through before entering the transaction. What if the document was created by the company’s surveyor rather than its lawyers? What if the surveyor actually gave legal advice, for example, as to the future prospects of achieving an upward rent review?

The Court of Appeal would have clearly liked to widen legal advice privilege to cover communications which touched on legal advice including legal advice by non-lawyers but they considered themselves bound by Three Rivers DC v The Governor & Company of the Bank of England [No 5] [2003] EWCA Civ 474. Three Rivers No 5 is generally thought to be a decision that has passed its usefulness and has not been followed in Commonwealth jurisdictions.

On this most important question (whether a non-lawyer who gives legal advice may claim privilege) the court invited the Supreme Court to take another look. But, until the Supreme Court deals with such a case, the answer to the question posed above is that the extent of the disclosure obligation is much wider in relation to the surveyor’s report than very similar advice given by a solicitor in relation to the same title.

Some communications passing between non-lawyers may be privileged where they form part of the continuum of communications as privilege is a broad concept. Communications from a lawyer copied to a non-lawyer which deal with other, say, commercial aspects of the transaction would be covered by privilege but communications which began from a non-lawyer may not attract privilege even if they contain legal advice. It is not enough merely to copy in, say, an in-house lawyer in order to claim legal advice privilege if the dominant purpose was to obtain the commercial views of the board of directors.

It seems, however, that for the foreseeable future other professionals will remain in a separate category from lawyers in relation to their confidential communications. The dominant purpose test will continue to govern the disclosure of such communications.