Hong Kong: Court Of Appeal Adopts A Broader And More Generous Interpretation Of "Client" For Legal Advice Privilege

Last Updated: 30 July 2015
Article by John M. Hickin
Most Read Contributor in Hong Kong, October 2018

Keywords: dominant purpose test, Hong Kong

On 29 June 2015, the Court of Appeal handed down judgment in the case of Citic Pacific v. Secretary for Justice1 and rejected the narrow definition of "client" found in the leading English Court of Appeal case on legal advice privilege, Three Rivers (No.5)2.

The Court of Appeal preferred the liberal approach to defining "client" for protection of legal advice privilege and confirmed the dominant purpose test was the proper test for such a claim. The Court also offered some guidance regarding the proper procedure for handling future claims of legal advice privilege.

Background

In the leading decision of the English Court of Appeal in 2003, Three Rivers (No.5), it was held that the protection of legal advice privilege was only available to a narrowly defined classification of "client", comprising of the group of core individuals responsible for obtaining legal advice on behalf of a corporation, and typically confined to the directors and the in-house lawyers of the corporation.

In effect, corporations would only enjoy legal advice privilege if the correspondence and documents were sent to/from this select group of individuals of the corporation and their lawyers. All other relevant communications and materials made with or by "third parties" in the organisation would be outside the scope of legal advice privilege, even if they were prepared for the purpose of obtaining legal advice for the corporation.

Although the decision was controversial and widely criticised, it was expected to be applicable in Hong Kong. Accordingly, at the Court of First Instance hearing of the Citic Pacific case in Hong Kong, Wright J adopted the narrow interpretation of "client" from Three Rivers (No.5). In particular, it was held that a qualified solicitor of Citic Pacific who was in the Company Secretariat Department was still classified as a "third party" and his communication with external lawyers was not protected by legal advice privilege.

Court of Appeal Decision

On appeal, the Court of Appeal disagreed with the adoption by the Court of First Instance of the narrow definition of "client" as the proper limit for legal advice privilege. Ultimately, it held that the right to confidential legal advice, as provided under Article 35 of the Basic Law, requires that all relevant materials produced for the dominant purpose of obtaining legal advice by any staff members of the corporation should be afforded the protection of legal advice privilege.

Such right to confidential legal advice is meaningless if only communications in respect of the advice involving a select few individuals of the corporation is protected rather than the entire process being confidential. This is particularly relevant in the context of a corporation because the necessary information for seeking legal advice is frequently required from different employees in various departments of a corporation. In turn, the restrictive approach would limit a corporation's ability to obtain meaningful legal advice because corporations would need to take into account the risk of possible disclosure of such materials in the future and would be discouraged from providing any sensitive materials to their legal advisors.

This welcome decision of the Court of Appeal serves to confirm the broad scope of legal advice privilege for corporations, firmly entrenching the right of corporations in Hong Kong to obtain legal advice under the Basic Law.

Judicial Guidance on Procedure in Disputes of Legal Privilege

The Court in the Citic Pacific case was asked to examine and assess a large volume of documents in respect of which the availability of privilege was challenged, the Court of Appeal found without proper assistance from the parties. To prevent a repeat of such a time-consuming and arduous exercise for the Court in the future, the Court of Appeal provided the following guidelines for future disputes in respect of legal privilege:

  1. The burden rests on the person claiming privilege to clearly identify the materials which are the subject matter of his claim and specify the basis and the context of how the item is privileged, because blanket claims of privilege will be rejected by the Court;
  2. The person claiming privilege should strongly consider giving a limited waiver for specified personnel or an independent counsel appointed by the other side to inspect the disputed materials; and
  3. Both parties should consider instructing an independent lawyer to resolve disputes on privilege without prejudice to their right to bring the dispute to Court if the matter remains unresolved by such independent lawyer.

Implications

The Citic Pacific case provided the perfect opportunity for the Hong Kong Court of Appeal to clarify Hong Kong's treatment of the controversial English decision of Three Rivers (No.5) regarding legal advice privilege. The Court of Appeal seized the chance to reject the narrow interpretation of "client" and in so doing to protect the fundamental right to seek confidential legal advice pursuant to the Basic Law of Hong Kong.

Corporations in Hong Kong will be delighted with the Court of Appeal's decision, as the decision relieves corporations of the need to very narrowly draw the group of individuals who may safely be involved in preparing and giving disclosure of confidential information for the purposes of obtaining legal advice.

It remains to be seen whether this landmark Court of Appeal decision will be subject to further appeal.

Footnotes

CACV 7/2012, 29 June 2015

Three Rivers District Council v. Governor and Company of the Bank of England (No.5) [2003] QB 1556

Originally published 28 July 2015

Visit us at www.mayerbrownjsm.com

Mayer Brown is a global legal services organization comprising legal practices that are separate entities (the Mayer Brown Practices). The Mayer Brown Practices are: Mayer Brown LLP, a limited liability partnership established in the United States; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales; Mayer Brown JSM, a Hong Kong partnership, and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.

© Copyright 2015. The Mayer Brown Practices. All rights reserved.

This article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein. Please also read the JSM legal publications Disclaimer.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
Barlow Lyde & Gilbert LLP
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Barlow Lyde & Gilbert LLP
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions