Privilege - Court of Appeal restricts ambit of legal advice privilege

11 minute read
04 February 2020

In an important decision for in-house lawyers in particular, the Court of Appeal has confirmed that documents will only benefit from legal advice privilege where they are prepared for the dominant purpose of seeking legal advice. We look at the decision in The Civil Aviation Authority v Limited, R. (on the application of) and its implications for in-house legal teams.

Legal professional privilege

Legal professional privilege is founded on the principle that parties should be free to consult their lawyers without fear that their communications will subsequently have to be disclosed to third parties.

Two limbs of the privilege have developed:

  1. Legal advice privilege (LAP) protects confidential communications between a client and lawyer for the purpose of giving or receiving legal advice.
  2. Litigation privilege protects confidential communications between a client and lawyer, or between either of them and a third party, which are produced for the dominant purpose of litigation which is in reasonable contemplation.

This case focused on the application of LAP, in particular in communications between multiple people, some of whom were lawyers and some of whom were not. Does the dominant purpose test apply to LAP as well as litigation privilege?

The dominant purpose test

It has long been recognised in England & Wales that, to benefit from the protection of litigation privilege, the communication in question must have been created for the dominant purpose of litigation; whereas documents created for multiple reasons, of which litigation was only one equal or subsidiary purpose, will not be protected by litigation privilege. So in the case of Waugh v British Railways Board (which introduced the dominant purpose test in England & Wales), the court held that a railway board's internal investigation report on a fatal accident was not protected by litigation privilege because it had been prepared for dual purposes - both for the railway board to obtain legal advice in relation to litigation arising out of the fatality, and for the board to decide if they needed to revise their safety procedures.

By contrast, it has been less clear to date whether the dominant purpose test also applies to LAP. In the absence of clear authority, working definitions of LAP to date have generally assumed that obtaining legal advice need only be a purpose, not the dominant purpose, in order for legal advice privilege to apply to a communication.

LAP and the "continuum of communications"

In Balabel v Air India, the court recognised that "[t]here will be a continuum of communication and meetings between the solicitor and client… Where information is passed by the solicitor or client to the other as part of the continuum aimed at keeping both informed so that advice may be sought and given as required, privilege will attach". The court further recognised 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".

While this recognition of the broad scope of 'legal advice' and the 'continuum of communication' between solicitor and client suggests LAP is wide in its ambit, difficulty can still arise particularly in the context of in-house lawyers, who may be called upon to provide both legal and commercial advice to their in-house clients, not all of which is necessarily covered by LAP - as was the case in The Civil Aviation Authority (CAA) v Limited (Jet2).

CAA v Jet2 - brief background

The CAA (the aviation regulator) had issued a press release which was critical of Jet2 (an airline) for failing to participate in a new consumer redress scheme. The CAA also provided correspondence between it and Jet2 to the press. Jet2 sought judicial review of the regulator's decision to brief the press. In the proceedings, it sought disclosure of drafts of one of the CAA's letters provided to the press, and of communications concerning the drafts.

The CAA claimed privilege over the documents sought, on the basis that the draft letters and the communications relating to them were prepared with the involvement of in-house lawyers and (although non-lawyers were also involved) they therefore formed part of the "continuum of communications" between client and in-house lawyer for the purpose of seeking legal advice and so were protected by LAP. At first instance, Morris J imposed a dominant purpose test for LAP and found inter alia that the documents were not created for the dominant purpose of seeking legal advice, and so were not privileged.

Is LAP subject to a dominant purpose test?

The key point of the appeal was whether Morris J was right to apply a dominant purpose test for LAP.

After reviewing previous authorities (both here and abroad), the Court of Appeal found that LAP is subject to a dominant purpose test:

  1. Although Waugh v British Railways Board was decided on the basis of litigation privilege, the judgment did not confine the dominant purpose test to that limb of privilege. Furthermore, the dominant purpose test introduced by Waugh was derived from an Australian authority which the Australian courts have ever since treated as applying to both litigation privilege and LAP.
  2. In addition to Australia, the courts in Hong Kong Special Administrative Region of China and Singapore have also concluded that the dominant purpose test applies equally to both LP and LAP.
  3. While other cases in England & Wales may not have considered the point directly, they all at least proceeded on the assumption that LAP applied only where the seeking of legal advice was the dominant purpose of the communication. In particular, both the Court of Appeal's decision in Three Rivers (No 5) and the House of Lords' decision in Three Rivers (No 6) assumed that a dominant purpose test did apply to LAP.
  4. The only authority the Court of Appeal could identify suggesting that the dominant purpose test does not apply to LAP is the Court of Appeal's 2018 decision in Director of the Serious Fraud Office v Eurasian Natural Resources Corp Ltd. However, as dominant purpose was not the key issue in that appeal, that view was obiter, and was reached without detailed consideration of the authorities.

LAP in multi-addressee communications

Having determined that the dominant purpose test does apply to LAP, the court went on to consider the practical application of LAP where a single email is sent to both lawyers and non-lawyers.

Delivering the leading judgment in the Court of Appeal, Lord Justice Hickinbottom said he was "unimpressed" by the CAA's submission that imposing a dominant purpose test for LAP would "make life difficult for those who wish to obtain legal and non-legal advice simultaneously, because (a) there is no indication that that causes a problem in countries, such as Australia and Singapore, which have adopted the dominant purpose test for LAP, and (b) LAP is a privilege, and those who wish to take advantage of it should be expected to take proper care when they do so" (our emphasis).

The key points emerging are therefore as follows:

  1. If the dominant purpose of the email is to obtain legal advice from an in-house lawyer, it will be privileged, even if it simultaneously seeks the commercial views of others;
  2. If the dominant purpose is to obtain commercial views of non-lawyer addressees, it will not be privileged;
  3. In considering whether legal advice is the dominant purpose of a communication, courts must have regard to the wide scope of legal advice (which includes the giving of advice in a commercial context through a lawyer's eyes) and the concept of the "continuum of communications" between solicitor and client;
  4. A lawyer's response, if it contains legal advice, will almost certainly be privileged, even if it is copied to more than one addressee;
  5. Multi-addressee emails should be considered as separate communications between the sender and each recipient for the purposes of assessing LAP;
  6. Emails and their attachments should also be considered separately for purposes of LAP, as they will not necessarily both be privileged; and
  7. Where a communication might realistically disclose legal advice then that communication will also be privileged.

Waiver of LAP?

There was a final issue in dispute, which was that even if the documents were found to be subject to LAP, Jet2 submitted that CAA had waived privilege in them by disclosing some emails voluntarily. Although this was obiter because of the Court's other findings, the Court of Appeal found that the CAA's waiver of LAP was limited to the documents they had voluntarily disclosed, and fairness would not have required any wider collateral waiver.

Key points for in-house lawyers

In the case of an email sent to an external lawyer, the issue of dominant purpose is unlikely to arise. This case is however highly relevant to in-house lawyers, in particular in-house lawyers who may often take part in general business discussions which do not involve legal advice.

The lessons from this judgment are therefore fairly obvious and not significantly different to those from previous cases, but it highlights again the need for in-house lawyers to be mindful that they will often have dual roles - as legal adviser and business adviser. Only communications sent and received in the capacity of the former will attract the protection of legal privilege.

Practically this means that in-house lawyers should:

  • Keep commercial and business advice separate from legal advice wherever possible - use separate communications if necessary; and
  • Consider carefully whether it is appropriate to send communications to multiple addressees - keep distribution lists short.

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