Legal Professional Privilege is an important right in law that relates to all communications between a client and solicitor, and sometimes to communications between a third party when it relates to litigation. However, the law recently changed on legal professional privilege, so our business dispute lawyers are here to explain the basics and how it may affect you before, during and after litigation.
Here we’ll be covering:
- What is Legal Professional Privilege?
- What are the two types of Legal Professional Privilege?
- What is Legal Advice Privilege?
- What is Litigation Privilege?
- In what circumstances is Legal Advice Privilege invoked?
- What’s privileged and what’s not privileged for the purposes of Litigation Privilege?
- How can Legal Professional Privilege be lost?
- Why is Legal Professional Privilege important?
- What steps can be taken to benefit from Legal Professional Privilege?
What is Legal Professional Privilege?
Legal Professional Privilege (commonly abbreviated to ‘LPP’) is a substantive legal right, with its objective being to protect a party from having to disclose confidential and potentially sensitive documents and/or information recorded in other forms.
What are the two types of Legal Professional Privilege?
There are two types of Legal Professional Privilege that you need to be aware of:
Legal Advice Privilege (LAP)
This can be summarised as confidential communications between lawyers and their clients, made for the purpose of seeking or giving legal advice.
Litigation Privilege (LP)
This is defined as confidential communications between lawyers and their clients, or the lawyer or client and a third party, and other confidential documents which come into existence for the dominant purpose of being used in connection with actual or pending litigation.
There are strict rules as to when each type of Legal Professional Privilege is applicable. Whether a document or oral evidence is privileged is a question of substance, not form, so just marking documents as “confidential and privileged”, or forwarding them to a lawyer, cannot automatically make a non-privileged document a privileged one.
It’s important to highlight that Legal Professional Privilege ‘belongs’ to the client, and the client’s lawyer is under a professional obligation to assert that privilege until it is waived by the client. There are – albeit notably few – statutory exceptions whereby the right to absolute privilege will be revoked.
What is Legal Advice Privilege?
Legal Advice Privilege (LAP) protects confidential written or oral communications between a lawyer and a client for the purposes of giving or receiving legal advice, or which reflects such a communication. To attract the protection of LAP, litigation does not necessarily need to be contemplated or pending, but it should be noted that this type of privilege prevents a party from insisting on disclosure of these types of document during litigation. LAP is narrower in scope than Litigation Privilege (discussed below) but is claimed more often.
What is Litigation Privilege?
Litigation Privilege (LP) protects confidential written or oral communications between a client or lawyer on the one hand and third parties on the other, or other documents created by or on behalf of the client or his lawyer, which come into existence once litigation is existing or in contemplation, and which are created mainly for use in the litigation (N.B. litigation in this context also includes arbitration). If protected by Legal Privilege, a party can withhold inspection of a relevant document, but must still identify the document in the disclosure list of documents which is required in civil proceedings. Crucially, no adverse inference can be drawn by the court if privilege is claimed.
In what circumstances is Legal Advice Privilege invoked?
A lawyer must be directly involved
The purpose of Legal Advice Privilege is to allow free access to a lawyer’s professional skill and judgment – therefore, there must be a lawyer involved directly in the communication for LAP to apply. ‘Lawyer’ in this context is widely defined to include solicitors and barristers, as well as any staff such as trainees, paralegals or secretaries being supervised by the lawyer and helping to give legal advice in the context of the professional relationship between their solicitor employer and the client, as well as foreign lawyers admitted to practice in their home jurisdiction.
If a lawyer is advising but does not have a practising certificate because they have been struck off, there can be some protection afforded to the client by way of Legal Advice Privilege, but the burden is on the client to show that they believed the lawyer was appropriately qualified at the time of instructing them.
What about in-house lawyers?
In respect of in-house lawyers, any management, business, or administrative communications are unlikely to attract professional privilege and so anything relating to that aspect of their function should be kept entirely separate from any legal communications, so as not to risk losing privilege.
The court will look at whether they gave the advice in their professional capacity as a lawyer and whether the advice relates to the rights, liabilities, obligations, or remedies of the client under private or public law. The European Court of Justice, however, has previously held that communications between a company and its in-house lawyers in the context of EU competition investigations are not protected by Legal Advice Privilege on the basis that in-house lawyers are not deemed independent.
What about other professions?
Legal Advice Privilege does not extend beyond members of the legal profession, and so even the same legal advice from any other professional will not attract privilege.
There are some very limited cases where Parliament has extended privilege to other professions (for example, patent agents enjoy rights against production of their advice in certain circumstances under the Civil Evidence Act 1968), but generally speaking, this is the exception rather than the rule. Any extension of privilege to advice given by non-lawyers will be a parliamentary decision, but for now, if a lawyer is not involved in the communication, LAP is unlikely to attach to that communication.
An ‘authorised’ client must be present
Only communications between a lawyer and an authorised client will be protected by Legal Advice Privilege. This does not mean, therefore, that all communications the lawyer has with any of the other employees at the corporate client’s company will necessarily be privileged. The term ‘client’ is narrowly construed to refer only to individuals who are authorised to give instructions to and receive advice from the lawyer, on that particular legal matter.
There must be a communication
Generally, for Legal Advice Privilege to apply, there must be a communication between a lawyer and a client, or a document which reflects such a communication.
Documents that have not actually been communicated between a lawyer and client may not be privileged.
Draft requests for legal advice may be privileged, but otherwise draft memoranda that do not have a clear intention to be and are not in fact communicated to the lawyer are unlikely to be privileged.
The rules are more flexible where non-communication is down to the lawyer, rather than the client. Where such documents are prepared in the course of giving legal advice to a client, they will generally be seen as part of the lawyer’s preparatory work for the client and they will therefore be covered by privilege, even if they are not actually communicated to the client.
The communication must be for the purpose of giving or receiving legal advice
Legal Advice Privilege arises in the context of the giving or receiving of legal advice. The term ‘legal advice’ is widely defined and covers advice in a relevant legal context, which may also extend to documents evidencing the substance of confidential communications passing between clients and their lawyers for the purpose of giving or receiving legal advice. This could include advice on how to present a case to an inquiry, for example, but may not cover situations where the lawyer is acting as general business adviser. If a lawyer is involved for convenience and not in the active capacity as the specifically instructed lawyer in a case, documents would not attract privilege.
Background documents sent to a lawyer when seeking legal advice will not be privileged if they existed before the need to seek legal advice arose, unless they were already protected by a pre-existing privilege, but the actual request for advice would benefit from privilege, whether made orally or in writing.
Key principles relating to whether content is legal advice for the purposes of LAP
- The party claiming privilege bears the burden of proof
- Affidavit assertions regarding privilege are not determinative, but evidence of facts which may require independent proof
- It is difficult to go behind an affidavit at an interlocutory stage, and an affidavit is generally conclusive unless doubt is cast on it from other sources
In the same vein, if a party can prove that documents form part of ‘a continuum of communication and meetings’ between the client and its lawyers, the object of which was the giving of legal advice as and when appropriate, a person should not have to redact the primary documents sent by their lawyers, so these documents would be entirely privileged.
Wider communication of Legal Advice Privilege
Communication of privileged advice from the recipient within the company to its employees (if they need it for the purposes of their work, or if it is to be given to a company’s board of directors) should not cause loss of privilege, provided this does not involve the loss of confidentiality.
Board minutes can be a tricky sticking point: board minutes summarising or attaching a copy of legal advice received will be privileged, but if the minutes go on to discuss the advice or its implication, the privilege may be lost.
What’s privileged and what’s not privileged for the purposes of Litigation Privilege?
Litigation Privilege (LP) arises from the principle that a litigant or potential litigant should be free to seek out evidence without being obliged to disclose the results of their research to the other side. For Litigation Privilege to apply, the material must:
- Be a communication between a lawyer, acting as a lawyer, and the client; or
- Be a communication between either a lawyer or client or a third party, i.e. confidential documents created by any of these parties, which came into existence for legal advice to be sought or given regarding contemplated or existing litigation, even if not actually communicated. (Similarly, a lawyer-to-lawyer communication made on behalf of the same client will benefit from litigation privilege if it satisfies the other requirements); or
- Be a document created by or on behalf of a client or their lawyer.
The material must also:
- Be made for the dominant purpose of litigation, meaning proceedings in the High Court, the County Court, employment tribunals and arbitration. (In respect of other tribunals, public inquiries or statutory investigations, the only guidance is that litigation must be ‘adversarial’, not investigative, or inquisitorial); and
- Litigation must be pending, reasonably contemplated or existing (‘litigation reasonably in prospect’ which means ‘may happen’, and that there is a real prospect of litigation, more than a mere possibility but not necessarily greater than 50%, would satisfy the test of ‘reasonably contemplated’ for this purpose); and
- Be confidential.
An assertion of privilege and statement of the purpose of the communication in a witness statement may assist, but this is evidence of a fact which may require proving independently. An affidavit is conclusive, unless from other evidence this is considered to be incorrect.
Generally speaking, it is the purpose of the person who was behind the creation of the communication that is relevant, but if one party has ‘actively deceived’ the other party to a document and they had an alternative purpose, the ‘fair and correct’ way of assessing the dominant purpose is to look at the other party’s purpose, which may in turn mean that the dominant purpose is not then the litigation.
There can be no confidentiality (and therefore no privilege) in the following types of document:
- Transcripts of proceedings in open court
- Attendance notes of meetings where both parties were present
- Telephone attendance notes of conversations between lawyers of both sides (apart from if the note contains additional comments about the case by the solicitor unless these notes can be redacted so the remainder of the note can be disclosed. If redaction is not possible, the note will be treated as privileged)
How can Legal Professional Privilege be lost?
Waiver of Legal Professional Privilege involves voluntarily producing documents where there would otherwise be a right to object to this. This might be by placing privileged documents before a court, for example. The waiver may give rise to an obligation to produce further associated privileged documents, known as collateral waiver, to prevent a partial disclosure to the court. A party could also choose to waive privilege over certain material (for example, a corporate entity could self-report to a regulator). This has wider implications than where there is simply a loss of confidentiality in one or more documents.
It is important to highlight that no Legal Professional Privilege can attach to communications between opposing parties (although without prejudice privilege prevents full disclosure of some documents). However, privilege could be waived on a selective basis to a third party, so that it is disclosed to that party for a certain stated purpose set out in a contractual undertaking but remains privileged for all other purposes.
Confidentiality is fundamental to privilege. Not all confidential documents are privileged but all privileged documents are confidential. If a document enters the public domain, it ceases to be confidential and will therefore lead to a loss of privilege. As such, it is important not to circulate privileged material too widely. If there is only limited disclosure to specifically named individuals, this is unlikely to amount to putting documents in the public domain and in such circumstances they would remain privileged.
Employee use of company’s IT systems
There are risks for an employee in using work IT systems for private communications, because of the lack of confidentiality as against the employer. If an email is sent from a work email account, that email and any attachments may not attract Legal Professional Privilege as the email is unlikely to be found to be confidential as against an employer. Emails sent and received on an employer’s IT system or attachments created on it are generally regarded as company property, and so not confidential.
Provision of written commentary
Providing written commentary on legal advice is risky, as that commentary may not itself be privileged. The exception to this is where the sender is acting as an in-house lawyer and giving legal advice.
Why is Legal Professional Privilege important?
LPP is crucial in allowing all businesses, irrespective of size, to access professional legal advice and not have to disclose the details relating to that advice – or from having to disclose the findings of document searches/information relating to existing or future litigation. This is all critical in allowing businesses to function with the confidence that they will be afforded some privacy for matters which may be commercially sensitive. If privilege were to be lost for communications between lawyers and third parties, this might risk corporations failing to seek legal advice when required or failing to engage in the self-reporting process. Both of these things might lead to corporates acting in ways in which they should not and less overall transparency as to how they have acted, with a view to preventing reoccurrence.
What steps can be taken to benefit from Legal Professional Privilege?
There are several steps that can be taken to improve the prospects of successfully claiming Legal Professional Privilege:
- Ensure that information remains confidential and so retains LPP by marking the document as ‘confidential and privileged’ and ‘not for onward circulation’. You can circulate privileged material, but this should only be limited disclosure to specifically named individuals. You could also try using confidentiality agreements, which our commercial contract solicitors can assist you with in terms of drafting the documentation.
- If you need to disclose a document which would otherwise have been privileged, you could waive the privilege on a selective basis to a third party, but ensure that you get a signed contractual undertaking in writing which is sufficiently precise and drafted by a lawyer, so that the document remains privileged for all other purposes. Again, if you would like assistance with that, our solicitors can help.
- If an external lawyer is instructed, ensure that the scope of the work to be done and advice to be given is confirmed in writing from the outset. Any proceedings contemplated must also be confirmed in writing as soon as a lawyer is instructed (or if already instructed, as soon as proceedings are contemplated, and this needs to be pinpointed as precisely as possible between the lawyer and your business).
- When commissioning a report, a company should ideally record whether litigation is contemplated and clearly mark it as such, keeping a paper trail of documents created and collected for this purpose. Claiming Legal Privilege over documents which come into existence before this is done would typically be more difficult.
- Depending upon the size of your business, you may wish to consider including a key employee in any committee managing documentation being sent and received to a legal adviser, in respect of an investigation or potential litigation, to improve the prospects of communications with that person being covered by LAP under the current restrictive definition of ‘client’.
Legal Professional Privilege is a complex and delicately balanced area of great importance in the dispute resolution arena. Seeking legal advice at the outset of any potential dispute is strongly advised, so that your business can exploit the benefits of specialist advice straightaway.