The principle that a client should be able to consult a lawyer in confidence without fear of having to disclose communications between them at a later date is a fundamental right that has long been recognised by common law. A successful claim to privilege will allow a party to withhold communications from production to a third party or the court. In the right circumstances, it can also be used to deny regulators and enforcement agencies access to documents. However, whether a document is privileged will always depend on the facts.
Here, we take a look at the principles governing the ability of a party to claim privilege and how to ensure communications that are privileged, stay privileged.
What is legal professional privilege?
Legal professional privilege allows a party to withhold evidence from a third party or the court (i.e. not to have to produce it to them) and it comes in two forms: legal advice privilege and litigation privilege. Although they are different in scope, many of the basic principles are the same.
Legal advice privilege
Legal advice privilege (LAP) is designed to protect the confidentiality of the lawyer/client relationship and applies to:
- confidential communications;
- that pass between a client and the client's lawyer;
- which have come into existence for the purpose of giving or receiving legal advice.
LAP can apply whether or not litigation is pending or contemplated.
LAP can only be claimed if the communication in question is confidential. If the communication ceases to be confidential, it will also cease to be privileged.
Just because a communication is confidential it does not, however, mean it will be privileged. It will need to meet all of the other requirements of LAP as well. Sensitive commercial documents may well be highly confidential but they would not be privileged.
"Communications" in this context will generally include actual lawyer/client communications (phone calls, face-to-face discussions, letters, emails and faxes etc.) and evidence of such communications (file notes of phone calls etc.).
Between a client and the client's lawyer
For LAP to apply the communications must be between the client and the lawyer. LAP cannot apply to communications with any professional other than a qualified lawyer, even if they are giving advice about the law such as accountants or claims consultants in construction adjudication. In those scenarios, it is possible (but not guaranteed) that litigation privilege will apply.
For the purpose of LAP, the definition of "lawyer" includes all members of the legal profession including barristers and solicitors, patent attorneys, foreign lawyers, and trainee solicitors and paralegals acting under the supervision of a qualified lawyer. It will also include in-house lawyers to the extent that they are providing legal advice - as where any lawyer is providing business/commercial advice, or advice relating to administration or management, that advice will not be privileged.
LAP will not apply to communications with an in-house lawyer in a competition investigation by the European Commission. In those circumstances, LAP can only be claimed if an external lawyer was instructed and provided the advice in question.
Being able to identify the 'client' is key when claiming LAP. In the case of individuals, the position will be more straightforward; generally, the 'client' will be the individual instructing the lawyer. Difficulties can arise (and often do) where legal advice is being given to a company or organisation. In that situation only those employees who are responsible for seeking and receiving legal advice from the external lawyers, will be regarded as the client for the purpose of the legal advice given.
Employees who are not expressly or impliedly tasked with seeking and receiving legal advice from the lawyer will fall outside the definition of "client", and communications between the lawyer and those employees will generally not attract LAP (though litigation privilege may apply to these communications - see further below).
For the purpose of giving or receiving legal advice
Legal advice is not just confined to telling the client the law. In any lawyer/client relationship there will be continued communication between the lawyer and client, and where information is passed between the two as part of that continuum and/or providing advice on what should prudently and sensibly be done in the relevant legal context, privilege will attach to those exchanges.
Lawyers' working papers will also be privileged if they would betray the tenor of the legal advice given by the solicitor.
As above, LAP will not apply to communications that are purely strategic or commercial in nature and this applies equally to communications with an in-house and an external lawyer. Where the lawyer is acting as a business adviser, rather than a legal adviser, no privilege can be claimed.
Litigation privilege allows a litigant to prepare for litigation without the fear that the documents produced for that purpose will subsequently have to be disclosed. It can apply to communications beyond those just between lawyer and client, but it only arises once litigation or other adversarial proceedings are reasonably in prospect, or have already commenced. Litigation privilege covers:
- confidential communications;
- between any of a client and its lawyer, or a client and a third party, or that lawyer and a third party;
- which come into existence once litigation is reasonably contemplated or is in existence; and
- which is made for the sole or dominant purpose of the litigation.
The principles that apply to the requirement of confidentiality, the scope of "communications" and the definition of a lawyer, apply to litigation privilege as they do to LAP.
Litigation or adversarial proceedings?
Litigation privilege can be claimed in proceedings where judicial functions are exercised by the court or a tribunal, e.g. proceedings in the High Court, County Court, employment tribunal and, where it is subject to English procedural law, arbitration.
The proceedings need to be adversarial, rather than purely investigative or inquisitorial. Internal grievance and disciplinary proceedings and proceedings which are only fact-gathering, or that take place before administrative tribunals, will not attract litigation privilege; nor (without more) do internal investigations or regulatory investigations.
A cautious approach is advisable generally on this point - for example in construction adjudication, where it cannot be said definitively that litigation privilege will protect legal advice given by a non-lawyer claims consultant, even where the dominant purpose test is satisfied.
When is litigation reasonably in prospect or contemplated?
If litigation is not already in progress, it must be reasonably in prospect or contemplated. To satisfy that requirement there must be a real likelihood rather than a mere possibility of adversarial legal proceedings being commenced, although it will not matter if the litigation never in fact commences.
The chance of litigation does not have to be greater than 50 per cent but a possibility that someone might make a claim at some point in the future, or mere apprehension of future litigation, will not be enough.
Dominant purpose test
Communications are often created for more than one purpose, so the 'purpose' test is one of dominance not exclusivity. Provided that the sole or dominant purpose for which the communication is created is the conduct of the litigation (or contemplated litigation) it will come within the scope of litigation privilege. 'Conducting litigation' includes the seeking of advice or information in order to decide whether to litigate and whether to settle the dispute giving rise to the litigation, as well as fighting litigation.
If litigation was not contemplated at the time a communication was created, then even if it becomes likely immediately thereafter, the communication will not be privileged.
Whether there is privilege in communications prepared in the course of internal investigations (including those in a regulatory or health and safety context) will be highly fact specific. If it can be shown that at the time the investigation was conducted litigation was reasonably in prospect, and that the litigation was the dominant purpose of the communications (notwithstanding the communications were also prepared for the investigation), privilege can be claimed. This can be a hard test, as an equal (a 50/50) purpose is not enough.
If litigation privilege cannot apply, it may be that LAP can be claimed, although that will only be possible if the communications in question are between the lawyer and the client for the purpose of obtaining legal advice. If the purpose of the communications is purely fact-finding, for the client's own internal or a third party's purpose, privilege will not apply.
Communications with a third party
Unlike LAP, litigation privilege attaches to communications with third parties and so the concerns arising in the context of LAP in relation to the identity of the "client" are not relevant.
Loss of privilege
The general rule is "once privileged, always privileged". This means that once a communication becomes privileged, the party to whom the privilege belongs may continue to claim privilege over it. This right will continue indefinitely, until the privilege is lost or waived.
Privilege can be lost inadvertently or it can be waived by the holder, and once privilege has been lost or waived it cannot be reclaimed.
Loss of confidentiality
Privilege only attaches to confidential communications, so if the communication is no longer confidential it will no longer be privileged. If a document is circulated widely, or is made publicly available, privilege is likely to be lost.
However, if a document is disclosed to a third party it will not necessarily mean that privilege in the communication is lost. If the communication is disclosed on confidential terms for a limited purpose, it may well remain privileged as against the rest of the world.
If it is necessary to share privileged communications with third parties consider using a confidentiality agreement. This would require the receiving party to agree that the communications are privileged and that provision of the communications does not amount to a waiver of that privilege.
A party may choose to waive privilege in a document or part of a document that is helpful to its case. However, this can be risky as, if the party relies on the document in support of its case, it can result in the party having to disclose other privileged documents or the whole document, and so any such waiver should be carefully considered.
The general rule is that where privilege is waived in respect of one document in a sequence of documents (or one part of a document), then the class of documents (or rest of the document) will have to be disclosed unless the document (or part of the document) disclosed deals with an entirely different issue or subject matter. This is to prevent parties relying on only selective disclosure or cherry picking from privileged material.
Disclosure through improper means or mistake
Where a document is obtained by the other party by improper means or as a result of an obvious mistake, that party may only use the document with the permission of the court.
An obvious mistake is usually when an obviously otherwise-privileged document (e.g. legal advice) is disclosed in a disclosure list and inspection is then allowed. If the fact that disclosure was mistaken was either obvious to the recipient, or alternatively would have been obvious to a reasonable solicitor in the same circumstances, the court will (or should) prevent use of the document.
Criminal or fraudulent purpose
Both LAP and litigation privilege may be lost if the communication in question was created for the purpose of furthering a criminal or fraudulent purpose.
Things to remember
There are a number of key considerations to have in mind when considering how to ensure communications that should be privileged, are privileged and will remain so.
- Do not share privileged communications (unless you feel you have to) - as that puts confidentiality in jeopardy.
- If you do feel that you have to share, control the distribution of privileged information as far as possibly you can. If privileged communications are widely shared, they may well cease to be confidential; if they are not confidential, they cannot be privileged.
- If legal advice needs to be shared, make sure it is shared on confidential terms which require acknowledgement of the confidential nature of the material and agreement as to the limited basis upon which it is shared.
- Ensure communications are marked "privileged" and "confidential". Labelling a communication privileged will not make it privileged, but it will help to identify privileged documents if privilege needs to be claimed.
- Copying a lawyer in on communications will not make them privileged. If litigation is not in prospect communications between non-lawyers, copied to a lawyer, will not be privileged. Likewise, where a third party (for example an accountant) provides legal advice, it is not privileged and will not become privileged simply by copying it to a lawyer.
- Try not to mix legal and non-legal advice. Where possible, legal and general commercial advice should be included in separate documents.
- Take care in board meetings. Make it clear when legal advice is being discussed and, where possible, the lawyer should report on legal advice. Legal and non-legal advice should be recorded separately in board minutes (so that the legal advice parts can be redacted if disclosure becomes necessary).
- Either avoid recording internal corporate discussions about litigation, or (if they are recorded – as must be more likely) be careful as to what is said. While privilege will attach to communications with the purpose of obtaining information or advice in relation to settlement, communications involving a purely commercial assessment of compromising a claim will not be privileged. E-mail discussions between two board directors, for example, as to a number to offer in settlement is not advice or information, and so is not privileged.
- Where investigations are to be carried out, think about whether you need a lawyer to prepare any reports. If litigation is not contemplated, it may be a lawyer should be involved on the basis that legal advice is needed to assess the legal risks and obligations (and in which case LAP would apply). If a lawyer is simply gathering information, communications are unlikely to be privileged.