For fans of Hollywood, you may recognise the term “Attorney-Client Privilege” bandied around in many a legal thriller. Tom Cruise’s character in the 90s hit film “The Firm” relies on it to reassure the Mob that he won’t leak details of the legal advice they’d been given to the FBI, and saves his skin in the process! Believe it or not, a similar concept exists outside of Hollywood. Although usually used in less dramatic circumstances, it can be just as useful to protect client confidence. In England and Wales, we call it “Legal Professional Privilege” (LPP).
These concepts can be complex and therefore difficult to know when they can be relied upon.
What is LPP?
- LPP protects from disclosure confidential communications, and material evidencing such communications, that take place between clients and their lawyers and in some circumstances also between clients/lawyers and third parties.
- Everyone who seeks legal advice (including individuals and corporates) is entitled to its protection and it is one of the highest rights recognised in law.
- It is a client’s and not a lawyer’s right and solicitors have a duty to advise their clients of its existence, their right to it, and when they are able to assert it.
- It comes in two flavours, depending on the circumstances:
- in connection with the client consulting a lawyer (legal advice privilege)
- in connection with litigation (litigation privilege)
When do they apply?
Legal advice privilege applies:
- to confidential communications between a lawyer and a client; and
- where those communications are made for the sole or dominant purpose of giving or receiving legal advice, or where communications are factual updates to allow advice to be given to clients at a later point.
- It doesn’t just apply to advice about the law but also covers advice about remedies and solutions, and documents created for advice purposes, e.g. background summaries.
- It is useful because it means you can unburden yourself to your lawyer and be sure that they won’t share what you’ve told them to your disadvantage and/or without your permission.
Litigation privilege applies:
- to confidential communications between lawyers their clients, or between either of them and a third party; and
- where those communications are made for the sole or dominant purpose of conducting existing or reasonably contemplated litigation which is adversarial (against someone) rather than investigative. This can include criminal and regulatory processes; and
- for the purpose of obtaining legal advice or information relating to the litigation.
- It is useful because it means that you are free to prepare your case against the other side in a dispute as fully as possible without your opponent being able to see what you’ve been up to. It also means that you can use your lawyer’s advice to prepare to reach a deal without going to court.
When do they not apply?
- If a lawyer’s assistance has been sought to further a crime or a fraud. The rule will emphatically be of no help in these circumstances and the attempt may spectacularly backfire – the lawyer may well be professionally obliged to disclose the information to the relevant authorities.
- In exceptional circumstances where legislation limits it, which mainly applies to powers to gather information in the interests of national security.
Let’s look at some examples:
Tom Cruise’s law firm provided the Mob with legal advice in relation to a number of matters. Many of these likely involved tax fraud and money laundering. Do you think Tom’s advice to the Mob would have been protected in England and Wales? It seems unlikely.
Now for some actual examples from case law:
- An employer emails its HR consultant about an employee who is being investigated for misconduct and says that the employee’s “rudeness and gross insubordination has caused major problems” and that they will not be returning to work “under any circumstances.” The employer dismisses the employee, who appeals. The person who sent the email makes the decision not to uphold the appeal. The employee claims his dismissal was unfair. It is alleged that the email suggested his dismissal was pre-determined and it would cause him injustice if the tribunal could not include the email as part of the evidence, i.e. it should not be privileged. However, the employer argues that it had been sent ‘in contemplation of litigation’ and should not be considered as part of the employee’s claim. Is the email protected by privilege?
- As the email was to a HR consultant and not an employment lawyer, it could not qualify for legal advice privilege.
- The Employment Appeal Tribunal in Abbeyfield (Maidenhead) Society v Hart, which was faced with this set of facts, concluded that, even though the email suggested the decision to dismiss had been pre-determined, it could still be privileged. The employer did not seek advice on how to act unlawfully, and the HR consultant did not give such advice. Instead, the consultant advised on the disciplinary process and the risk of that process leading to litigation. The employer’s indication that they did not want the employee to return to work was the sort of frank instruction that a party may feel able to give in a privileged communication.
- An employee alleges corruption and financial wrongdoing is going on within an employer’s business. The employer starts its own internal investigation and uses forensic accountants to review records. The Serious Fraud Office (‘SFO’) eventually gets wind of the allegations and writes to the employer to encourage it to self-report for possible prosecution. The SFO ultimately decides to launch its own, criminal, investigation. The SFO applies to the court for copies of the company’s lawyers’ notes of interviews with the company and its employees, as well as the materials produced by the forensic accountants, including their reports. Are these documents protected by privilege? The Court of Appeal when faced with this set of facts in The Director of The Serious Fraud Office v Eurasian Natural Resources Corporation Ltd & Ors concluded that:
- Although many of the documents being requested related to either the company’s own internal investigation or the SFO’s investigation and not to formal court proceedings, the documents could be protected by litigation privilege on the basis that criminal prosecution was reasonably contemplated at the time that the investigations began. Investigations where the prospect of them leading to criminal proceedings is made clear to the business, can therefore trigger litigation privilege in documents created for the dominant purpose of taking advice on and/or defending themselves.
- Also, although criminal prosecution by the State is different to civil litigation involving individuals or companies suing each other, it is just as serious and sufficiently serious to trigger litigation privilege.
- Only communications between the company’s lawyers and any employees specifically authorised by the company (e.g. a Board member) to communicate with the lawyers could be protected by legal professional privilege. This is quite a strict test and disadvantages bigger businesses whose Board members or senior figures are not always the ones who give instructions or information to lawyers to get their advice. However, the court did say that it believed it would be in the interests of public policy that explicit instruction is not a requirement. It said that there is a public policy rationale that businesses should be able to get legal advice without the “fear of intrusion”, i.e. that they will have to show their communications to a court.
Legal advice privilege and litigation privilege are important protections for your business. Equally important is knowing when you can rely on them and when you can’t. The related duty to disclose all relevant evidence in litigation does mean that it’s important to get this right.