UK: Legal Advice Privilege - Has Certainty Been Restored?

Last Updated: 15 December 2004
Article by Joanne Garbett

In a previous article, "Legal Advice Privilege - Has the House of Lords calmed troubled waters?"* we reported that the House of Lords had overturned the Court of Appeal's restrictive analysis of legal advice privilege in the Three Rivers' litigation1. Full reasons for the Law Lords' decision have only just been delivered. Whilst the Judgment does provide clarification on the scope of legal advice privilege, disappointingly the House of Lords declined to grapple with the Court of Appeal's narrow interpretation of "client" in the context of privileged lawyer/client communications.

*To view this article please click on ‘Next Page’ link at the bottom of this page.

It has long been accepted2 that there are two categories of legal professional privilege, namely legal advice privilege and litigation privilege.

Broadly, legal advice privilege protects communications where no litigation is contemplated or pending. It is not as wide in scope as litigation privilege and extends only to communications between a client and its solicitor which are created for the dominant purpose of obtaining legal advice and documents evidencing those communications. It will not apply to communications with third parties. It was legal advice privilege that was examined in the Three Rivers litigation.

During the course of two appeals the Court of Appeal held that legal advice privilege did not extend beyond advice in respect of rights and liabilities which are capable of being the subject matter of proceedings in a Court of Law. This did not include "presentational" advice sought by the Bank of England from its lawyers. Furthermore, and of particular concern to corporate clients, the Court of Appeal found that legal advice privilege would only attach to communications between a "nominated client", here the Bingham Inquiry Unit (BIU) and its lawyers. The BIU comprised of three Bank officials and had been set up by the Bank of England to deal with all communications between itself and the inquiry. Legal advice privilege would not attach to other communications between the Bank of England's employees, or ex-employees and the Bank's lawyers.

Scope of legal advice privilege

The House of Lords has rejected the Court of Appeal's restrictive interpretation of legal advice privilege. It held that, in order to attract privilege, communications between a client and its lawyers would not be limited to situations when the legal advice relates to a client's "rights and liabilities." The House of Lords found that all communications between the BIU and its lawyers regarding the content and manner of presentation of evidence to the Inquiry and all internal notes and memos relating to this would qualify for legal advice privilege.

Lord Scott of Foscote, delivering the principal speech, emphasised the following;

• Legal advice is not confined to telling the client the law; it includes advice as to what should prudently and sensibly be done in the relevant legal context;

• In cases where a "relevant legal context" is in doubt the Court should consider whether the legal advice relates to the rights, liabilities, obligations or remedies of the client either under private law or public law;

  • If it does the parties should ask themselves whether the communications falls within the policy underlying the justification for legal advice privilege, ie: is the occasion on which the communication takes place such as to make it (objectively) reasonable to expect the privilege to apply?

Helpfully the House of Lords set out a number of practical examples where it says legal advice privilege will and will not apply:

  • Advice given by a lawyer to a developer seeking planning permission will relate to rights under planning law that the developer hopes to acquire and any conditions accompanying the permission. This will attract legal advice privilege.
  • Advice given by a lawyer to a objector at a planning inquiry will not relate to the rights, liabilities and obligations of the objector. However as every objector has the right under public law to present his case to an inquiry, advice given by a lawyer to the objector for the purpose of enhancing the prospects of a successful outcome would be advice given in a relevant legal context thereby qualifying for legal advice privilege.
  • Advice given by a lawyer to the promoters of private bills will often relate to presentational advice, and will therefore qualify for legal advice privilege.
  • Advice given by a lawyer as to how to set about joining a private club will not attract legal advice privilege as there is no legal context. If however the client had, for example, previously been refused membership and believed his rejection was inconsistent with the club's admission rules and wanted to make a fresh application, it is likely that legal advice privilege would apply.

Communications between lawyers and clients' employees

Many interveners in this appeal expressed their concern that the Three Rivers (No. 5)Court of Appeal Judgment had gone too far in treating communications between the Bank of England's lawyers and employees of the Bank as being, for privileged purposes, the equivalent of communications between the lawyers and third parties and thereby not attracting legal advice privilege.

The employee/client point did not arise as an issue in this appeal. However, the House of Lords was invited to express its views on the approach to be adopted in determining whether a communication between an employee and his/ her employer's lawyers should be treated for legal advice privilege purposes as being a communication between lawyers and their client. Despite recognising that this issue is of particular importance to corporate clients who can only communicate through employees and officers, the Law Lords disappointingly declined to express a view.

The law on this point continues to be as set out in the Court of Appeal's Judgment in Three Rivers (No. 5) .Corporate clients should therefore ensure that communications with lawyers are conducted via a "nominated client" in order to attract legal advice privilege.


1 Three Rivers District Council and Others v. Governor and Company of the Bank of England [2004] EWCA Civ 281

2 See the Court of Appeal's decision in Anderson v Bank of British Columbia (1876) 2 Ch.D 644

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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