A Closer Inspection Of Legal Advice Privilege

The principle of legal advice privilege came under scrutiny by the Court of Appeal at the start of this year in Civil Aviation Authority v R (on the application of Jet2.com Limited) [2020] EWCA Civ 35. We look in detail at the principles established in this case and how these were applied by the court in the recent case of A v B and the FRC [2020] EWHC 1492.

Summary

  • Privilege entitles a party to withhold evidence from production to a third party or the court
  • Legal advice privilege and litigation privilege are both types of legal professional privilege which cover communications between a lawyer and their client (and in the case of litigation privilege between a client or their lawyer and a third party) in certain circumstances
  • In January 2020, the Court of Appeal confirmed that only those communications and documents created for the “dominant purpose” of obtaining or giving legal advice will be protected by legal advice privilege (Civil Aviation Authority v R (on the application of Jet2.com Limited))
  • This “dominant purpose test” had previously related to litigation privilege only
  • In June 2020, in A v B and the FRC, the Court held that internal documents which the company believed had been created with privilege, were in fact not privileged

Legal advice privilege

Legal advice privilege (“LAP”) covers communications between a lawyer and their client whether or not litigation is pending or contemplated where the purpose of such communications is to obtain or provide legal advice. Litigation privilege has traditionally been drawn more widely to cover communications between a client, their lawyer and third parties but will apply in more limited circumstances i.e. where litigation is pending or contemplated.

In Three Rivers DC V Bank of England (No 5) [2003] EWCA Civ 474, it was held that LAP only covers communications between a lawyer and the lawyer’s client. In that case the Court of Appeal set out a narrow definition of client. Therefore, an employee of a corporation and the corporation’s lawyers will not necessarily be covered by LAP, unless the employee was specifically tasked with obtaining legal advice on behalf of the corporation. Consequently, internal documents created by employees are unlikely to be covered by LAP (although if litigation is pending or contemplated then litigation privilege may be relevant). This principle has been widely criticised as it is said that it does not take into account the fact that in vast corporations, information required for legal advice may not only be held by those instructing lawyers.

It was also established in Three Rivers (No 5) that LAP may extend to material which “evidences” the substance of confidential communications passing between a client and their lawyer for the purpose of obtaining or providing legal advice, for example, litigation funding documents.

Jet2 judgment

Jet2 was publicly criticised by the Civil Aviation Authority (“CAA”) for not participating in a consumer complaint resolution scheme and, as a result, Jet2 brought judicial review proceedings against the CAA. Jet2 considered that the CAA may have been motivated by an improper purpose, therefore, in order to prove its concerns in this regard Jet2 applied for specific disclosure of all drafts of a letter from CAA to Jet2 (containing the criticism) and all emails between CAA employees discussing the drafts. CAA argued that these documents were covered by LAP as CAA’s in-house lawyers had been included on the emails and advised on the drafts.

The High Court rejected these arguments and ordered that all drafts and emails discussing the drafts should be disclosed. The Court of Appeal upheld the High Court’s decision confirming unanimously that a claim for LAP requires the party claiming privilege to show that the relevant document or communication was created or sent for the “dominant purpose” of obtaining legal advice.

It was held that the original formulation of LAP (as set out in Greenough v Gaskell 1 My & K 98 continues to apply. This is described in the following terms:

“…there must be (a) a communication (whether written or oral); (b) between a client and a lawyer, or a lawyer and his client; (c) made in confidence; (d) for the purpose of giving or obtaining legal advice.” (para.42)

The focus of the appeal was whether the “purpose” in (d) must be the dominant purpose. Most of the documents that were the subject of the disclosure application in this case were emails sent to a number of addressees, one or more of whom were in-house lawyers. The Court of Appeal applied the following principles to this class of document:

  1. The dominant purpose test applied to LAP.
  2. The dominant purpose test requires an analysis of each document and cannot rely solely on the general role of the relevant lawyer.
  3. In relation to multi-addressee emails, the dominant purpose of the communication must be identified. If the dominant purpose is to obtain the commercial views of the non-lawyer addressees then it will not be privileged, even if a subsidiary purpose is to simultaneously obtain legal advice.
  4. If the response from the lawyer contains legal advice, then that communication is likely to attract privilege.
  5. Multi-addressee communications should be considered as separate communications between the sender and each recipient and therefore each separate communication may attract different levels of privilege.

These same principles are applicable to meetings attended by both lawyers and non-lawyers. Legal advice provided at such a meeting would attract privilege, however the mere presence of a lawyer at a meeting is not sufficient to attract privilege to the entire proceedings. In the same way, the simple fact that a document is sent to a lawyer does not render it privileged; an analysis of the content of the document will be required. However, the Court of Appeal held that such documents ought to be considered in the context of communications which preceded and followed it.

Application of the Jet2 principles

Five out of the six documents the Court was asked to consider were held to be not privileged.
In A v B and the FRC, the High Court was asked to consider whether or not LAP attached to a number of internal governance and compliance documents including a risk register, minutes of board and executive meetings and the draft of a Chairman’s script.  The judgment serves as a warning to corporate bodies to consider carefully the principles of legal professional privilege and their application to internal governance documents, and to take steps to ensure that documents are created only where necessary and in the context of seeking legal advice where they would seek to rely on LAP.

As stated above, the mere presence of a lawyer at meetings or the involvement of a lawyer in preparing minutes will not necessarily render those minutes privileged. If legal advice is being provided and recorded, then that part of the document will be subject to privilege. In A v B and the FRC, the meetings did not record any legal advice and therefore the minutes were not privileged.

The risk register, which had been produced by General Counsel, was said to be privileged however the judge disagreed and stated that simply because a document “takes into account” legal advice, does not mean that it is privileged. Similarly, the judge rejected arguments that the draft of the Chairman’s script was privileged as it was held that it did not communicate legal advice.

Comment

It is prudent to be aware of the principles applied when considering whether a document meets the requirements for LAP protection. The new “dominant purpose” test will require a more stringent approach and will perhaps necessitate clear and unequivocal language when seeking or providing legal advice. Certainly, all legal advice communications ought to be kept separate from more general commercial advice so that the legal communications are clearly privileged and do not become mixed with more generic advice risking failure of the “dominant purpose” test.

Should you require assistance with internal governance procedures, please do not hesitate to get in touch at hello@tenetlaw.co.uk

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