Legal professional privilege entitles a client to refuse to disclose some of their confidential communications to another party including the courts, tribunals, regulatory bodies and enforcement agencies. It is an absolute right and, once it has been established, can only be overridden in very limited circumstances such as fraud. However, privilege will be lost if the communication loses its confidentiality.
There are two main types of privilege:
- legal advice privilege – this protects confidential communications, and evidence of those communications, between a lawyer and a client provided that the communications are for the purpose of seeking and receiving legal advice in a relevant legal context. It does not protect communications with third parties;
- litigation privilege – this protects confidential communications, and evidence of those communications, between a lawyer and his client and/or a third party, or between a client and a third party. It will apply to communications that have been created for the dominant purpose of obtaining legal advice, evidence or information in preparation for actual legal proceedings, or legal proceedings that are reasonably imminent.
This guide provides a summary of the law on privilege and sets out some practical steps that clients can take to maximise and ensure the protection afforded to confidential communications by privilege.
Who is the lawyer?
Privilege applies to advice given by external lawyers and also to in-house lawyers provided that they act in their capacity as a lawyer - not in an executive or compliance capacity - and are qualified to practise under the Solicitors Regulation Authority or Bar Council rules. In the case of solicitors, this will invariably include the need to hold a current practising certificate. Privilege extends to employees such as legal executives, trainee solicitors and paralegals provided that they are properly supervised by qualified lawyers.
Privilege will also extend to the advice given by foreign lawyers based abroad, provided that they are qualified to practise under their own regulatory authority, and to foreign lawyers based in England and Wales who are qualified to practise under the Solicitors Regulation Authority.
There is an important exception: all advice given by in-house lawyers to their employers will be disclosable in an EU Competition Commission investigation as such advice will not be protected by privilege.
Privilege does not usually apply to other professionals who give legal advice, such as accountants.
Legal advice privilege
Who is the client? For legal advice privilege to apply it is important to establish who 'the client' is. It will only include those individuals specifically tasked with seeking and obtaining legal advice either from in-house or external lawyers. The definition of 'the client' does not extend to everyone within the organisation, or even the whole department or division seeking legal advice. For example, communications between a lawyer and employees outside the client team, will generally not be privileged. Communications within the client team may not be privileged if they are not for the purpose of seeking and receiving legal advice – for example, commenting on the merits of a particular matter.
What advice is covered? Legal advice privilege is not confined to advice on the law, but also covers advice about what a client should do in a particular set of circumstances. This will cover presentational, commercial or strategic advice provided that it relates to a client's legal rights, liabilities, obligations and remedies. It will not apply to advice of a purely strategic or commercial nature which is not provided in a legal context. Equally, it will not apply to the results of any legal advice - for example, an agreement or conveyance drawn up as a result of that advice.
What does litigation mean? Litigation in this context has to relate to adversarial legal proceedings and will therefore exclude internal grievance and disciplinary proceedings. It also excludes fact-finding inquiries and investigations.
In addition, litigation has to be actual or 'reasonably in prospect' - so, more than a mere possibility. It is not sufficient that there is a distinct possibility that sooner or later someone might make a claim, nor is the general fear of future litigation enough.
What is the dominant purpose? documents are often created for more than one purpose – for example, a company may commission an investigatory report looking into the reasons why an accident happened or fraud had occurred, but at the same time anticipating quite reasonably that litigation will be likely and that such a report is necessary for this purpose. However, if the report is not prepared for the dominant purpose of litigation then litigation privilege will not apply.
Common interest privilege
Often there is a need to voluntarily share privileged documents with a third party. Common interest privilege will operate to preserve privilege, whether legal advice or litigation, in documents that are disclosed in this way. The common interest must exist at the time of disclosure to the recipient for this to apply.
- if legal advice is required, get lawyers – whether internal or external - on board as soon as possible to maximise the protection afforded by privilege;
- instruct colleagues or employees to mark all communications in relation to obtaining legal advice as 'privileged and confidential - created for the purpose of obtaining legal advice/in contemplation of litigation'. Although labelling communications in this way is not conclusive, it is certainly helpful and reinforces the main condition which must be satisfied if privilege is to be established;
- ensure that the circulation of any legal advice received is restricted – even if the original advice is privileged, a copy taken of it may not be if it is created for a non-privileged purpose. Review your email policy, as the use of email often results in documents being circulated more widely than intended;
- review emails before forwarding them on – if you consider that they may contain legal advice, send a separate email;
- circulate privileged documents on a 'need to know' basis only – if privileged documents need to be shared, do so under a confidentiality agreement;
- avoid creating unnecessary documents – if it is necessary to discuss privileged advice with third parties, consider holding a meeting to discuss the advice rather than disclosing it, and avoid documenting the discussions where possible. If there is a need to document the discussions, mark any notes or minutes 'Private and Confidential';
- discourage any analysis or discussion of legal advice in written memoranda or minutes of meetings.
- resist making manuscript notes on privileged documentation - such notes are unlikely to be privileged;
- if it becomes necessary to disclose privileged material to a third party, ensure it is always provided on confidential terms. Where lawyers are advising you as members of a multi-disciplinary team, it will frequently be necessary for the legal advice to be copied to other members of the team. This should not amount to a waiver of privilege so long as the disclosure is made on confidential terms.
Legal Advice Privilege – additional steps in a non-litigious situation
- Agree (and document) who is "the client" for the purpose of the internal investigation and instructing lawyers.
- Only the "client" should prepare briefing notes, letters of instruction, meeting agendas or minutes for the purposes of seeking and obtaining legal advice; employees who are not part of "the client" should not take on this task.
- Consider whether the benefit of instructing professional advisers in any investigation outweighs the potential for any third party documents to be disclosed.
- If professional advisers are involved, if they have anything sensitive to say, it may be best to communicate this orally to the lawyer as the lawyer's own documents will be privileged.
- Ensure that any advice sought or given on presentational, strategic or commercial issues is given in the context of the client's rights and obligations and not as stand-alone advice.
- Make it clear to other employees that documents containing information relevant to the seeking of legal advice should not be created without express clearance from the client being obtained first.
- If written communications do have to be produced by non-client employees for the purposes of seeking legal advice, ensure that supporting reasons are recorded as this may help to reduce the risk of the status of the document being misconstrued in future by some hostile third party.
- Discourage non-client employees from reporting to the client on the subject of which legal advice is being sought or from copying in anyone to these communications.
Litigation Privilege – additional steps in a litigious or potentially litigious situation
- If a fact finding investigation is needed, ideally lawyers should be instructed to commission the investigation and report for the dominant purpose of anticipated litigation and on the basis that legal advice is needed; the report should principally look at the causes of the incident and then, as a subsidiary issue, consider what improvements could be made for the future.