Legal Professional Privilege

Legal professional privilege is, in some respects, more restricted than the duty of con­fidentiality owed by a lawyer to a client. It only protects communications between the client and lawyer and, generally, only information given for the purpose of obtaining legal representation.

The effect of these limitations is that information cannot be placed under a cloak of privilege just because it has been given to a lawyer. Much criticism of confidentiality is directed at privilege, although this is not always clear. Recently, legal professional privilege has been under attack by governments eager to convict criminals or reduce money laundering or tax evasion.

A. Basis in Common Law and Statute

Legal professional privilege was developed as a rule of evidence. The original principles covered work done by the lawyer in giving legal advice to the client or in preparing for litigation. Neither lawyer nor client could be ordered to give evidence in court, or elsewhere, of communications between them. The sanctity of advice is also bolstered by statute. The Police and Criminal Evidence Act (PACE) 1984, section 58(1) provides that ‘[a] person arrested and held in custody in a police station or other premises shall be entitled, if he so requests, to consult a solicitor privately at any time’.

PACE also gave the privilege a statutory definition, applicable to both criminal and civil proceedings, in section 10(1). The section states that:

(1) Subject to subsection (2) below, in this Act ‘items subject to legal privilege’ means—

(a) communications between a professional legal adviser and his client or any person representing his client made in connection with the giving of legal advice to the client;

(b) communications between a professional legal adviser and his client or any person representing his client or between such an adviser or his client or any such represen­tative and any other person made in connection with or in contemplation of legal proceedings and for the purposes of such proceedings; and

(c) items enclosed with or referred to in such communications and made—

(i) in connection with the giving of legal advice; or

(ii) in connection with or in contemplation of legal proceedings and for the purposes of such proceedings, when they are in the possession of a person who is entitled to possession of them.

(2) Items held with the intention of furthering a criminal purpose are not items subject to legal privilege.

The statutory definition is said to embody the common law.^[1550]

Privilege has acquired significance beyond its original scope. In General Mediterranean Holdings v PaleU^[1551] Toulson J stated that privilege was a fundamental basis of the administration of justice, which cannot be overridden by the general words of a statute. The House of Lords has held that legal privilege is a fundamental human right protected by Article 8 of the European Convention on Human Rights.^[1552] The case law is often ambiguous or confused and has not received extended analysis by either the judiciary or the legal profession.^[1553]

B. Communications between a Lawyer and his Client

(Legal Advice Privilege)

i. Private Practitioners

It will be noted that, under PACE, all communications between solicitor and client are privileged if they concern giving legal advice, whether or not they relate to litigation. This is often known as legal advice privilege. An illustration of the operation of this professional privilege, and a justification for it, can be found in the House of Lords decision in R v Derby Magistrates’ Court, ex p B^[1554]

On arrest B admitted murdering a girl. Before trial, he retracted his confession and implicated the girl’s stepfather. B was acquitted. He later admitted the offence again and then retracted the confession. Eventually, the stepfather was charged with the murder and B was called as a witness for the Crown. Counsel for the stepfather sought evidence from B, and his solicitor, of B’s previous inconsistent instructions.^[1555]

At first instance disclosure was ordered on the balance of public interest. The public interest in ensuring that all relevant evidence was available to the defence was held to outweigh the public interest in confidentiality. B no longer had any recogni­sable interest in the privilege.

In a comprehensive judgment the Lord Chief Justice, Lord Taylor, examined the history of legal privilege. He concluded

[t]he principle which runs through all these cases... is that a man must be able to consult his lawyer in confidence, since otherwise he might hold back half the truth. The client must be sure that what he tells his lawyer in confidence will never be revealed without his consent.

The judgment in R v Derby Magistrates’ Court raised legal advice privilege above a rule of evidence to ‘a fundamental condition on which the administration of justice as a whole rests’. Lord Taylor concluded that legal advice privilege ‘once established should be absolute. No exception should be allowed.^[1556] Were this not to be the law, solicitors would have to tell their clients that their confidence would be broken if ‘in some future case the court was to hold that [they] no longer had “any recognisable interest” in asserting it’.^[1557] The idea that, once established, legal advice privilege is absolute has been accepted in a number of leading cases.^[1558]

Lord Nicholls, agreeing with Lord Taylor, considered that if a court could override privilege it ‘would be faced with an essentially impossible task’. What criteria would it use? Would the public interest in the conviction of the guilty always override it? Would the need for evidence in a serious civil claim be a sufficient cause, ‘say where a defendant is alleged to have defrauded hundreds of people of their pensions or life savings?’^[1559]

The broad scope potentially afforded to advice privilege potentially protects clients confessing crimes to their lawyer with a view to obtaining advice. Thus, in the excep­tional cases, considered below, where the state seeks information by covert surveillance or other methods, there is no guarantee that the court will let it be used in evidence.

ii. In-house Lawyers

In-house lawyers are subject to the same codes as private practitioners in England and Wales. Doubts arise regarding the privileged status of in-house communications. There is a risk that, if legal advice privilege applies to in-house lawyers, corporations might use it to protect sensitive documents, and dubious activities, from scrutiny by the courts.

The English courts have treated the issue of the independence of in-house counsel as only one consideration in assessing whether in-house communications with lawyers were created in a relevant legal context. This approach is different from that in Australia and Europe, for example, where employment in-house negates any question of privilege.^[1560]

In England and Wales, communications between in-house lawyers and their employing companies have been treated as potentially attracting privilege, including in investigations by competition authorities, such as the former Office for Fair Trading. Some doubt is cast on this assumption by European competition law and the recent decision in Akzo Nobel Ltd v European Commission.^[1561] The case involved the investiga­tion of possible anti-competitive practices at the appellant company and the seizure by the respondents of communications with in-house lawyers for which privilege was claimed.

The European Court of Justice held that privilege only extended to ‘independent lawyers’ committed to ‘collaborating in the administration of justice’. In-house lawyers, because of their employed status and relationship with their client, were ‘less able to deal effectively with any conflicts between his professional obligations and the aims of his client’.^[1562] The court held that the decision need not affect the policy of Member States in pursuing competition investigations. It does, however, create considerable uncertainty about the vulnerability of confidential communications with in-house lawyers. It also indicates the possibility of a longer-term drift in domestic law towards the European position.

iii. Non-lawyers Providing Legal Advice

In the current legal services market it is arguable that legal professional privilege should be available to non-legal professionals providing legal advice. This proposi­tion was tested recently in the Supreme Court, in the case of P rudential PLC and Prudential (Gibraltar) Ltd v Special Commissioner of Income Tax and Philip Pandolfo (HM Inspector of Taxes).^[1563] The appellants sought a declaration that legal profes­sional privilege protected advice given on a tax avoidance scheme by its accountants.

The appellants argued that changes in the legal services market had rendered the reservation of privilege to lawyers an anomaly. It was noted that patent agents were once not regarded as lawyers and so their clients did not have common law privilege.^[1564] Given their intervening development and contemporary role, counsel argued, patent and trade mark attorneys were now regarded as lawyers. Lord Neuberger, however, noted that, Parliament had extended privilege to new groups in very specific instances. For example, patent attorneys acting to protect inventions, designs, technical information, or trade marks, now enjoys statutory protection of communications as if they were ‘acting as the client’s solicitor’.^[1565]

By a majority the court decided that privilege applies only to qualified lawyers, solicitors and barristers, even where advice is legal advice which a professional person is qualified to give. In the leading judgment in the Supreme Court, Lord Neuberger said that Parliament has legislated to extend privilege in some cases. Therefore, extending common law privilege to non-legal professionals, such as accountants, was a matter for parliament. To decide otherwise, he said, would ‘would be likely to lead to what is currently a clear and well understood principle becoming an unclear principle, involving uncertainty’.

iv. The Client

a. Individuals

In most circumstances it is clear who the client is.

b. Organisations

In Three Rivers District Council & Others v Governor and Company of the Bank of England (No 6),^[1566] the issue arose as to whether communications between a Bank’s employees or ex-employees, or officers or ex-officers and its solicitors, could qualify for legal advice privilege. The case concerned the collapse of the Bank of Credit and Commerce International SA (BCCI). The claimants were creditors of BCCI and the liquidators in its insolvency (A). They brought an action against the Bank of England, the respondents, for misfeasance in public office. This related to the supervi­sion of BCCI before its collapse. The government appointed Lord Justice Bingham to conduct an inquiry into the supervision of BCCI.

On the announcement of the Bingham Inquiry, B had established the Bingham Inquiry Unit (BIU) to prepare its case. The Bank of England had retained Freshfields, solicitors to advise on dealings with the inquiry. The Court of Appeal held that only communications between Freshfields and the BIU could qualify. Communications between the lawyers and third parties could not. Since it was not relevant to the appeal, the House of Lords declined to express a view. Baroness Hale said that, in organisations, there are particular difficulties in identifying ‘the client’ to whose communications privilege should attach.^[1567]

V. Legal Advice

Legal advice privilege is not exclusively concerned with preparation for litigation but covers legal advice given to a client by a lawyer in all contexts, for example in making a will, drawing up contracts or undertaking conveyancing. It is in this context that the Court of Appeal attempted to rein in what was seen as an attempt to overextend the scope of this privilege in the Three Rivers case. In fact, the Court of Appeal and the House of Lords reached different conclusions on restricting the scope of legal advice privilege.

In order to succeed in a claim for losses suffered as a result of the BCCI collapse, depositors had to show an omission attributable to bad faith.^[1568] This would be all but impossible without access to internal documents. A, therefore, sought disclosure of documents created by the BIU for Freshfields. The Bank of England claimed legal professional privilege in respect of those documents.

In the Court of Appeal, Lord Phillips was critical of the wide scope afforded legal privilege. He said that

[w]here.. litigation is not anticipated it is not easy to see why communications with a solici­tor should be privileged. Legal advice privilege attaches to matters such as the conveyance of real property or the drawing up of a will. It is not clear why it should.^[1569]

He called for a review of the law.

The Court of Appeal held that legal professional privilege could only be claimed for communications between the Unit and the solicitors seeking or giving legal advice. In order to claim legal advice privilege the advice being sought from the lawyers had to be advice as to legal rights or liabilities. Advice as to how the Bank of England should present its case to the inquiry did not qualify for privilege.

On appeal to the House of Lords, A argued that legal advice privilege attached to communications between lawyer and client where the advice and assistance was of a kind that was part of the proper function of a lawyer to give. The Bank of England argued that legal advice privilege was an extension of litigation privilege and should be confined to advice on legal rights and obligations. It should, it was said, extend to advice and assistance in the presentation of a client’s case to a public inquiry.

The House of Lords agreed with the Bank of England and allowed the appeal. It held that legal advice privilege attached to communications between the Unit and its solicitors. It covered the manner in which the Bank should appropriately present evidence and material to the Bingham Inquiry. Legal advice privilege was not, however, an extension of litigation privilege. Legal professional privilege was a single privilege. Its two sub-heads were legal advice privilege and litigation privilege.

The rationale for the decision was that solicitors, as ‘men of affairs’, provided clients with a wide variety of advice on their rights, liabilities and obligations. This was covered by legal advice privilege, and the advice given to the bank in this case was so covered. Legal advice included, said Lord Carswell ‘advice as to what should prudently and sensibly be done in the relevant legal context’.^[1570]

Baroness Hale said the their Lordships endorsed the approach of the Court of Appeal in Balabel v Air India,^[1571] and the observation of Lord Justice Taylor,^[1572] that ‘legal advice is not confined to telling the client the law; it must include advice as to what should prudently and sensibly be done in the relevant legal context’. She added,

[t]here will always be borderline cases in which it is difficult to decide whether there is or is not a ‘legal’ context. But much will depend upon whether it is one in which it is reasonable for the client to consult the special professional knowledge and skills of a lawyer, so that the lawyer will be able to give the client sound advice as to what he should do, and just as importantly what he should not do, and how to do it.^[1573]

Lord Scott said,

it is necessary in our society, a society in which the restraining and controlling framework is built upon a belief in the rule of law, that communication between clients and lawyers, whereby the clients are hoping for the assistance of the lawyers’ skills in the management of their affairs, should be secure against the possibility of any scrutiny from others.^[1574]

Therefore, where information was found to be subject to legal professional privilege, it could not be set aside on the ground of some higher public interest.

vi. N on-legal Advice

The courts have adopted a wide definition of legal advice in interpreting the scope of legal advice privilege. Privilege extends to the client’s instructions to the solicitor, instructions to a barrister and the barrister’s opinion. It covers documents, and copies of them, created in order to obtain legal advice and those which indicate the advice being given.^{[1575] [1576] It does not necessarily extend to client attendance notes. In R (Howe) v South Durham Justices,31 privilege was claimed for an attendance note made by a solicitor at a trial in which his client was disqualified for driving offences. The note was required by the authorities in order to establish that the defendant in the present case was the same person, in which case he was driving while disqualified. The defen­dant claimed, inter alia, that the note was covered by privilege. The Divisional Court held that the note could be used purely for the sake of proving identity, provided any privileged material could be concealed.}

The substance of ‘legal advice’ is interpreted broadly. For example in Nederlandse Reassurantie Groep Holding NV v Bacon & Woodrow,^[1577] assistance provided for the client included advice given by solicitors on the commercial wisdom of a proposed transaction. This information was held to be covered by privilege provided it was given in the context of acting as a legal adviser. This is similar to the reasoning of the House of Lords in Three Rivers. ‘Legal advice’ is also given wide definition by extension of the privilege to employed lawyers and also to patent agents, licensed conveyancers and ‘authorised advocates and litigators’.^[1578] In relation to EU competi­tion investigations before the European Court of Justice, however, legal professional privilege does not extend to communications between employed lawyers and their employer clients.

C. Litigation Privilege

In Three Rivers, Lord Scott said that he favoured ‘a new look at the justification for litigation privilege’ in the light of the Civil Procedure Rules and the fact that civil litigation was ‘in many respects no longer adversarial’. In fact, the courts seem to have been more inclined to apply the privilege beyond the conventional courts.

i. Parties to Litigation Privilege

Litigation privilege potentially covers communication between solicitors or barristers and third parties relating to litigation. This includes the work of in-house litigation solicitors in exactly the same way as if they were external lawyers.^[1579] Under the Courts and Legal Services Act, legal professional privilege was extended to a person who was not a barrister or solicitor at any time when that person was providing advocacy or litigation services as an authorised advocate or authorised litigator. It also covered those providing conveyancing services as an authorised practitioner or providing probate services as a probate practitioner. Under the section, any communication was, in any legal proceedings, privileged from disclosure as if the person in question were acting as his client’s solicitor.^{[1580] [1581]}

ii. Venue and the Nature of Proceedings

The assumption that litigation privilege is restricted to proceedings or anticipated proceedings in a court of law was tested in Tesco Stores Ltd v Office of Fair Trading.⁴¹ The applicants (T) appealed a decision by the Office of Fair Trading (OFT) to impose a fine for alleged practices designed to increase the price of cheese. T had interviewed a number of witnesses connected with the case and the OFT sought disclosure of their statements.

The OFT argued that the process was an administrative procedure under the Competition Act 1998 and therefore not litigation. The Competition Appeal Tribunal found that the procedure was administrative, but that, by the time T began collecting statements, it had become adversarial. Litigation privilege could therefore apply. The decision suggests that it is the nature of the proceedings rather than the venue that determines whether litigation privilege applies.

iii. Documents Covered

Litigation privilege covers a wide range of documents, including reports compiled by an expert in preparation for litigation. Prior to PACE this was an area of inconsis­tency. The courts first declared that solicitors could not be required to produce or give evidence of the report⁴³ and then that they could.⁴⁴ This was apparently contrary to PACE, section 10 and was rightly criticised.⁴⁵ Although the position now seems settled in favour of privilege applying, protection is less than watertight. Circumstances will inevitably arise where the right to privilege will be tested. An expert preparing a report can be subpoenaed by the other side to give evidence, there being no property in a witness. It should be emphasised, therefore, that Three Rivers, Derby Magistrates and numerous other cases, state that the doctrine of privilege is absolute once established.

IV.