Legal Professional Privilege – Only the privileged and select few are covered by it


Legal Professional Privilege (LLP) protects communications between lawyer and client from being disclosed.

O nly communications with lawyers will be protected against disclosure and it follows that LPP is not available to advice given by Claims Consultancies that are not peopled by qualified lawyers.

What is legal professional privilege?

Legal advice privilege consists of written or oral communications between lawyer and client and not with third parties, for the dominant purpose of giving or getting legal advice. The lawyer’s client will receive this protection and the courts have identified who are the individuals in a corporation that will be classified as “the client” having this protection against disclosure of sensitive communications, made by the corporation and by these individuals on behalf of the corporation.

The two recent cases RBS Rights Issue Litigation [2016] EWHC 3161 and The Director of the Serious Fraud Office -v- Eurasian Natural Resources Corporation Limited [2017] have further restricted the scope of LPP. It is therefore essential that corporations pay heed to the narrow limits in which their communications with lawyers will be protected against disclosure.

The narrowing limits of Legal Professional Privilege

In the RBS Rights Issue Litigation [2016] EWHC 3161 the Royal Bank of Scotland claimed privilege of transcripts, notes and other records of interview of employees in an investigation in response to subpoenas issued by the US Securities and Exchange Commission relating to the notorious sub-prime lending and as a result of whistleblowing allegations. RBS resisted disclosure and inspection of the interview notes on the grounds that they were covered by legal advice privilege or that the Interview Notes were lawyers’ privileged working papers.

RBS argued that that the Interview Notes recorded communications between a lawyer and a person authorised by RBS to give instructions to its lawyers and they were privileged as such. They did not claim that the interview notes were part of communications between RBS and its lawyers. They accepted that the Interview notes contained information from employees and former employees to enable them to obtain legal advice from its external counsel.

The Court of Appeal followed Three Rivers (No 5) and made it clear that information gathered from an employee is to be shown to a lawyer to enable the lawyer to give legal advice is merely “preparatory material” and is not privileged.

The interview notes were not privileged because they comprised information gathering from employees or former employees preparatory to and for the purpose of enabling RBS through its directors or other persons authorised to do so on their behalf to seek and receive legal advice. Employees are treated in the same way as independent agents and third parties and for this reason the interview notes were not communications between client and lawyer and were therefore not privileged.

Not a clue

The court also decided that the interview notes were not privileged as “lawyers’ working papers” because they did not “give a clue” to the trend of the advice being given. If the interview notes fall short of giving a clue as to the trend of legal advice and merely contain “a line of enquiry” they will not be privileged.

In The Director of the Serious Fraud Office -v- Eurasian Natural Resources Corporation Limited [2017] 1017 (QB) applied for a declaration from the court that certain documents generated during investigations carried out by solicitors and forensic accountants into activities of the Defendant (ENRC) who had self-reported to the SFO alleged criminal activities of a subsidiary. The SFO’s investigations focused on allegations of fraud, bribery and corruption in Kazakhstan and Africa. ENRC claimed litigation and legal advice privilege in respect of the documents. Amongst these documents were those relating to a large number of witnesses interviewed in the Kazakhstan investigation and a number of meetings and telephone calls in the African investigation. The court decided that none of these documents were protected by LPP and that they had to be disclosed.

The court decided that if a lawyer carries out fact-finding investigation by speaking to employees of the corporation these would not be privileged merely because he was obtaining the information from them in order to give legal advice to their employer. It would be different if the “client”, for example the board of the corporation, delegated the responsibility for obtaining the legal advice to a senior employee or group of employees.

Lawyers’ notes and papers

The Serious Fraud Office and Eurasian decision confirm that LLP will only apply if the lawyers’ notes show the tenor of the legal advice. This means that a verbatim note of what the lawyer was told by a prospective witness is not a privileged document.

The lawyers’ notes of the interviews had to be disclosed and the court concluded that a document such as a witness statement is not privileged just because a lawyer has created it.

The rivers of privilege run deep

In the House of Lords and Court of Appeal cases of Three Rivers District Council -v- Governor of The Bank of England the courts asked themselves who is the lawyer’s “client” to whom the protection of LPP will apply? The court decided that only a small number of employees could be considered to be “the client”, rather than any single officer.

The Court of Appeal decided that legal advice applies to communications between lawyer and client for the obtaining of advice and assistance in relation to “rights and liabilities”.

The Court of Appeal concluded that the dominant role of the lawyers was to advise merely on the preparation and presentation of events to the Inquiry that had been set up. They decided that “presentational advice” on the best “presentation” of evidence to be submitted to the Inquiry was not advice on “legal rights and responsibilities”. It was instead advice and assistance on how to present the Bank’s evidence to the inquiry in the least likely way to attract criticism of the Bank of England.

The conclusions to be drawn from the Three Rivers litigation are as follows:

1. It is important to record and list the few individuals in the corporation who are to be “the client”.

2. Explicit reference to advice as to the clients’ rights and responsibilities should be made in the legal advice,

3. In giving commercial advice explicit reference should be made to substantive rights and obligations. For example, the terms of the contract that is the subject of the advice,

4. Strategic, presentational and commercial advice will only be privileged if it is given in the context of legal advice given on a freestanding basis, otherwise it will not be privileged.

5. Marking the document with the following wording will not make it privileged but will limit the author to the giving of advice on legal rights and obligations and prevent the unwanted dissemination of the document:

“legally privileged and confidential prepared for the purpose of obtaining advice in relation to rights and obligations. Not to be forwarded without express consent of the legal department or external lawyers”

These cases show that it is important for corporations to create internal procedures and protocols in order to bring their communications and documents within these parameters. Inevitably this will require the input of lawyers to assist in creating these procedures and protocols.

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