UK: Three Rivers: A Further Narrowing of the Scope of Legal Advice Privilege

Last Updated: 23 December 2003

By Neil Jamieson and Simon Schooling

The High Court made a further ruling on the scope of legal advice privilege in its judgment of 4 November 2003. The Court has further narrowed the scope of the privilege, interpreting the principles of the Court of Appeal’s decision in the same case in April 2003. In this article we review the implications for clients consulting solicitors about participating in non-adversarial matters.

Solicitors’ advice on presentational issues may not attract legal advice privilege, the High Court has held in a further ruling in Three Rivers. The decision reduces the scope of legal advice privilege substantially.

Background To The High Court’s Decision

The Three Rivers claim by former BCCI depositors against the Bank of England ("the Bank") arises from the collapse of BCCI and the subsequent inquiry ("the Inquiry") by the then Lord Justice Bingham into the Bank’s regulatory functions.

Since the Inquiry was not adversarial, on disclosure in Three Rivers the documents generated by the Bank were not protected by litigation privilege. The issue was therefore the extent to which documents were protected by legal advice privilege.

In April 2003 the Court of Appeal held that only communications for the purpose of obtaining legal advice between a unit of three officials of the Bank (the Bingham Inquiry Unit or "BIU") and the Bank’s solicitors, and documents evidencing such communications, were protected by legal advice privilege. Legal advice privilege will not protect information obtained from an employee of the client whether produced for the purpose of being sent to the client’s legal advisers or not. No other communications were held to be protected, even communications with other bank employees since the BIU rather than those employees was to be treated as the solicitors’ client, and in any event the dominant purpose of those communications was held to be the presentation of evidence to the Inquiry in an orderly and attractive fashion rather than obtaining of legal advice.

The High Court’s Decision

The Court of Appeal had not been asked to consider which communications between the Bank and its solicitors were for the purpose of obtaining legal advice, and it fell to the High Court to review that issue in light of the Court of Appeal’s decision. In deciding that not all the communications between the Bank and its solicitors were subject to legal advice privilege, the High Court (Mr Justice Tomlinson) held:

  • The true rationale of legal advice privilege is that it is a privilege in aid of litigation. It covers the seeking or obtaining of advice concerning rights and obligations because it is rights and obligations which form the subject matter of litigation.
  • Legal advice privilege should be confined to its proper limits and should not be extended by the Court even if the Court thinks that it should.
  • Advice and assistance was sought by the Bank from its solicitors concerning how to present its evidence to the Inquiry in the way least likely to attract criticism. Such presentational assistance from solicitors should not be characterised as legal advice in relation to rights and obligations of a kind that attracts legal advice privilege. It was therefore unlikely that the Court of Appeal had intended that all communications between the BIU and the solicitors attract legal advice privilege.

The Court has not yet been asked to apply these principles to individual documents. Instead the Bank has been required to re-examine its disclosure in light of the Court’s conclusions, so there may yet be a further episode to come. The decision may, however, result in a large part of the communications between the BIU and the Bank’s solicitors not being covered by legal advice privilege.

Implications Of The Decision

Over and above the consequences of the Court of Appeal’s decision (as reported in our Briefing Note in May 2003) the High Court’s decision has further implications for those seeking assistance from lawyers in relation to their participation in inquiries and other non-adversarial proceedings.

  • Advice in relation to inquiries is routinely sought from and given by lawyers. However where that advice is on presentational issues rather than legal rights and obligations it is likely not to be covered by privilege, particularly where the Court considers that it could equally have been given by professionals other than lawyers such as accountants whose advice does not have the protection of privilege.
  • Separating out issues and material relating to (a) advice on presentation and (b) advice which relates to rights and obligations, may not be an easy task but it would be prudent for lawyers and their clients to seek to do so and, where possible, keep the work streams distinct.
  • It may be possible for matters which fall on the presentational side of the divide to be dealt with orally or in a less document intensive way. Where documentation is required those producing it should be made aware that the cloak of privilege may not be available and that particular care must be taken in the content of such documents. These issues should be addressed with clients at the outset and appropriate guidelines put in place.

It is important to stress that these issues relate to legal advice privilege only, and that litigation privilege is unaffected by this decision. In addition the scope of documents required to be disclosed in civil litigation may well be limited by proportionality or the other considerations relating to disclosure set out in the Civil Procedure Rules.

This further decision on the scope of legal advice privilege may well not be the last. We understand that Tomlinson J’s decision is to be appealed to the Court of Appeal which may reinstate a wider scope for legal advice privilege. We will keep a watch on that appeal and any other developments in this area.

The content of this article does not constitute legal advice and should not be relied on in that way. Specific advice should be sought about your specific circumstances.

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