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M6: Legal and litigation privilege

General

 

Single privilege

"[17] Where legal professional privilege ("LPP") attaches to a communication between a legal adviser and a client, the client is entitled to object to any third party seeing the communication for any purpose, unless (i) the client has agreed or waived its right, (ii) a statute provides that the privilege can be overridden, (iii) the document concerned was prepared for, or in connection with, a nefarious purpose, or (iv) one of a few miscellaneous exceptions applies (eg in a probate case where the validity of a will is contested).
[18] As Lord Carswell explained in Three Rivers District Council v Governor and Company of the Bank of England (No 6) [2005] 1 AC 610 ("Three Rivers"), para 105, LPP "is a single integral privilege, whose sub-heads are legal advice privilege and litigation privilege". This case is concerned with the first of those subheads, legal advice privilege ("LAP")."  (R (oao Prudential Plc) v. Special Commissioner of Income Tax [2013] UKSC 1)

General

Burden of proving privilege on party claiming it

 

"[108] The burden of demonstrating this is upon RBS. It is axiomatic that the burden of proving privilege falls on the party claiming it. The relevant principles are found in West London Pipeline v Total [2008] EWHC 1729 (Comm) per Beatson J (as he then was) at §86. In particular:
(1) A claim for privilege is an unusual claim in that the party claiming privilege and their legal advisers are judges in their own case, subject of course to the power of the Court to inspect the documents.

(2) For that reason, the Court must be particularly careful to consider the basis on which the claim for privilege is made.

(3) Evidence filed in support of a claim to privilege should be as specific as possible without making disclosure of the very matters that the claim for privilege is designed to protect." (Re RBS Rights Issue Litigation [2016] EWHC 3161 (Ch), Hildyard J)

"[8] It is common ground that it is for the person claiming privilege, both legal advice privilege and litigation privilege to establish it (see Beatson J in West London Pipeline Ltd v Total UK Ltd [2008] EWHC 1729 (Comm) at [86]). The burden of proof is therefore on the applicants who contend that legal advice and litigation privilege apply to the Disputed Documents in this case." (Refinitiv UK Holdings Limited v. HMRC [2023] UKFTT 222 (TC) Judge Brooks)

Burden of proving privilege on party claiming it

Legal advice privilege

 

All communications passing between client and lawyers in connection with the provision of legal advice

"[19] In summary terms, as is common ground on this appeal, LAP applies to all communications passing between a client and its lawyers, acting in their professional capacity, in connection with the provision of legal advice, i.e. advice which "relates to the rights, liabilities, obligations or remedies of the client either under private law or under public law" – Three Rivers (No 6), [2005] 1 AC 610, para 38, per Lord Scott."  (R (oao Prudential Plc) v. Special Commissioner of Income Tax [2013] UKSC 1)

Suggestion of a dominant purpose test for all communications

"[9] LAP applies to confidential communications between a client and their lawyer for the dominant purpose of giving or receiving legal advice together with secondary evidence of the content of such communications and documents that betray the trend of the advice (see R (Jet2.com Ltd) v Civil Aviation Authority [2020] QB 1027 at [96]). Privilege may also attach to documents sent as part of a “continuum of communications” between a lawyer and client aimed at keeping both informed so that advice may be sought and given as required." (Refinitiv UK Holdings Limited v. HMRC [2023] UKFTT 222 (TC) Judge Brooks)

[18] The parties differ on whether it is necessary, when legal advice privilege is claimed, to consider the dominant purpose of the communication in order to determine whether a document is privileged.  HMRC argue that such consideration is necessary.  The Applicant disagrees and also argues that, in any event, the nature of the communications was entirely bilateral (by which I understand the Applicant to be stating that each communication was between a lawyer and client only).  

[19] In light of the recent decision of the Court of Appeal in CAA v R (oao Jet2.com Limited) [2020] EWCA Civ 35 read as a whole (but in particular paragraph 96), I agree with HMRC that, when considering whether legal advice privilege applies to a document, it is relevant to ask for what purpose or purposes the communication was made, and whether the dominant purpose was the giving or seeking of legal advice.

[20] However, as the Applicant noted, CAA v R (oao Jet2.com Limited) concerned a dispute where the documents in dispute were emails sent to multiple recipients, not all of whom were lawyers.  So, while I consider that the question of whether the dominant purpose of a communication is to seek or receive legal advice, can still arise when that communication is between only a lawyer and a client, I consider it is significantly less likely that such a communication will have a purpose other than the seeking or receiving legal advice.  I note the comments of Hickinbottom L.J. (at paragraph 100(iii) of CAA v R (oao Jet2.com Limited)) that: "The response from the lawyer, if it contains legal advice, will almost certainly be privileged, even if it is copied to more than one addressee."" (Wiseman v. HMRC [2022] UKFTT 75 (TC), Judge Bailey)

Legal advice privilege

Only communications in connection with obtaining legal advice from qualified lawyers

 

"[52] Turning to this case, then, despite the powerful arguments advanced to the contrary, and in agreement with the clear and careful judgments below, I consider that we should not extend LAP to communications in connection with advice given by professional people other than lawyers, even where that advice is legal advice which that professional person is qualified to give.
[53] I reach this conclusion for three connected reasons, which together persuade me that what we are being asked to do by Prudential is a matter for Parliament rather than for the judiciary. First, the consequences of allowing Prudential's appeal are hard to assess and would be likely to lead to what is currently a clear and well understood principle becoming an unclear principle, involving uncertainty. Secondly, the question whether LAP should be extended to cases where legal advice is given from professional people who are not qualified lawyers raises questions of policy which should be left to Parliament. Thirdly, Parliament has enacted legislation relating to LAP, which, at the very least, suggests that it would be inappropriate for the court to extend the law on LAP as proposed by Prudential."  (R (oao Prudential Plc) v. Special Commissioner of Income Tax [2013] UKSC 1)

Must be acting in a professional capacity (whether or not being paid)

"[15]... I therefore conclude that Knowles were not retained as solicitors or barristers, even if Messrs Rainsberry and Tomlinson were barristers and solicitors...

...

[17] The reality is that the Defendants retained Knowles not as barristers but as an organisation to provide them with claims and project handling advice. In this respect, their position is no different from the claimants in the Prudential case who employed accountants. The fact that Mr Mackay honestly understood that the two gentlemen with whom he was dealing at Knowles were qualified and practising barristers or solicitors is immaterial because their employer was not retained by the Defendants to provide the services of barristers or solicitors." (Walter Lilly & Company Limited v. Mackay [2012] EWHC 649 (TCC), Akenhead J)

Includes in-house lawyers and foreign lawyers

"[124] The privilege attaching to the advice of salaried legal advisers was first recognised judicially by the Court of Appeal in Alfred Crompton Amusement Machines Ltd v Customs and Excise Commissioners (No 2) [1972] 2 QB 102. Lord Denning MR, at p 129, justified the result primarily on the ground that, although the communications of a corporation with an in-house legal adviser were internal to the corporation, nevertheless the adviser was performing the same function as the lawyer in independent practice. Relevant communications with foreign lawyers have for many years attracted the same privilege for the same reason. In Lawrence v Campbell (1859) 4 Drew 485 privilege was claimed in English litigation for communications between a Scottish client and a Scottish solicitor practising in London. Sir Richard Kindersley V-C held (at p 491) that "the same principle that would justify an Englishman consulting his English solicitor would justify a Scotchman consulting a Scotch solicitor." Subsequently, communications with foreign lawyers were treated as being entitled as a matter of course to the same privilege as communications with English lawyers in like circumstances: see Macfarlan v Rolt (1872) LR 14 Eq 580; In re Duncan, decd [1968] P 306; Great Atlantic Insurance Co v Home Insurance Co [1981] 1 WLR 529, 535-536." (R (oao Prudential Plc) v. Special Commissioner of Income Tax [2013] UKSC 1, Lord Sumption (dissenting on the result))

"[44] Although the older cases (decided at a time when legal advice was generally obtained from or through solicitors in private practice) concern external lawyers, LAP applies to communications, not only with a lawyer in independent practice, but also with an in-house lawyer (see, e.g., Alfred Crompton Amusement Machines Ltd v Customs & Excise Commissioners (No 2) [1972] QB 102, and Financial Services Compensation Scheme Limited v Abbey National Treasury Services Limited [2007] EWHC 2868 (Ch) at [9])." (Civil Aviation Authority v. Jet2.comLimited [2020] EWCA Civ 35)

"[11] Although it is not necessary for the lawyer to be in private practice (advice from an in-house lawyer may be protected by LAP), it is necessary for the lawyer to be acting in his or her capacity as a lawyer..." (Refinitiv UK Holdings Limited v. HMRC [2023] UKFTT 222 (TC) Judge Brooks)

Good faith but mistaken belief that adviser is qualified lawyer can suffice

"[122] It is therefore no surprise to find legal professional privilege described in terms of communications between a lawyer and his client because this is the relationship to which the law for the policy reasons I have described gives this extended form of protection. No other professional relationship qualifies. But it does not necessarily follow from this that a client who in good faith instructs someone whom he mistakenly believes to be a qualified solicitor or barrister should forfeit the protection of the legal privilege which he would otherwise obtain in relation to the disclosures he has made or the advice he has received." (Dadourian Group International Inc v. Simms [2008] EWHC 1784 (Ch), Patten J)

Communications with subordinates acting under the supervision of a qualified lawyer can be privileged 

"Now, keeping that in view, what has been done is this: The actual communication to the solicitor by the client is of course protected, and it is equally protected whether it is made by the client in person or is made by an agent on behalf of the client, and whether it is made to the solicitor in person or to a clerk or subordinate of the solicitor who acts in his place and under his direction." (Wheeler v. Le Marchant (1881) 17 Ch D 675 at 682)

Only communications in connection with obtaining legal advice from qualified lawyers

Statutory extension

 

"(1) Subsection (2) applies where an individual (“P”) who is not a barrister or solicitor—
(a) provides advocacy services as an authorised person in relation to the exercise of rights of audience,
(b) provides litigation services as an authorised person in relation to the conduct of litigation,
(c) provides conveyancing services as an authorised person in relation to reserved instrument activities, or
(d) provides probate services as an authorised person in relation to probate activities.

(2) Any communication, document, material or information relating to the provision of the services in question is privileged from disclosure in like manner as if P had at all material times been acting as P's client's solicitor.

(3) Subsection (4) applies where—
(a) a licensed body provides services to a client, and
(b) the individual (“E”) through whom the body provides those services—
(i) is a relevant lawyer, or
(ii) acts at the direction and under the supervision of a relevant lawyer (“the supervisor”).

(4) Any communication, document, material or information relating to the provision of the services in question is privileged from disclosure only if, and to the extent that, it would have been privileged from disclosure if—
(a) the services had been provided by E or, if E is not a relevant lawyer, by the supervisor, and
(b) at all material times the client had been the client of E or, if E is not a relevant lawyer, of the supervisor.

(5) “Relevant lawyer” means an individual who is—
(a) a solicitor;
(b) a barrister;
(c) a solicitor in Scotland;
(d) an advocate in Scotland;
(e) a solicitor of the Court of Judicature of Northern Ireland;
(f) a member of the Bar of Northern Ireland;
(g) a registered foreign lawyer (within the meaning of section 89 of the Courts and Legal Services Act 1990 (c. 41));
(h) an individual not within paragraphs (a) to (g) who is an authorised person in relation to an activity which is a reserved legal activity; or
(i) a European lawyer (within the meaning of the European Communities (Services of Lawyers) Order 1978 (S.I. 1978/1910)).

 

(6) In this section—
“advocacy services” means any services which it would be reasonable to expect a person who is exercising, or contemplating exercising, a right of audience in relation to any proceedings, or contemplated proceedings, to provide;
“litigation services” means any services which it would be reasonable to expect a person who is exercising, or contemplating exercising, a right to conduct litigation in relation to any proceedings, or contemplated proceedings, to provide;
“conveyancing services” means the preparation of transfers, conveyances, contracts and other documents in connection with, and other services ancillary to, the disposition or acquisition of estates or interests in land;
“probate services” means the preparation of any papers on which to found or oppose a grant of probate or a grant of letters of administration and the administration of the estate of a deceased person.

 

(7)This section is without prejudice to any other enactment or rule of law by virtue of which a communication, a document, material or information is privileged from disclosure." (Legal Services Act 2007, s.190)

Statutory extension

Solely for the benefit of the client

 

"[22] Secondly, LAP exists solely for the benefit of the client. As Bingham LJ said in Ventouris v Mountain [1991] 1 WLR 607, 611, the expression "legal professional privilege" is "unhappy" in so far as it suggests that the privilege is that of the legal profession, when it is "the client who enjoys the privilege". Thus, as Lord Hoffmann pointed out in Morgan Grenfell at para 37, "[i]f the client chooses to divulge the information, there is nothing the lawyer can do about it"."  (R (oao Prudential Plc) v. Special Commissioner of Income Tax [2013] UKSC 1)

Solely for the benefit of the client

Joint privilege

 

Joint retainer

"[52]...I consider that the authorities establish that where a solicitor accepts a joint retainer from parties with potentially conflicting interests one client cannot insist as against the other that legal professional privilege attaches to any of what passes between the solicitor and that client during the currency and in the course of the retainer: Baugh v Cradocke (1832) 1 Mood & R 182; Perry v Smith (1842) M&W 681; Shore v Bedford (1843) 5 Man & Gex 271; Ross v Gibbs (1869) LR 8 Eq 522 and Re Koenigsberg [1989] 3 All ER 289. (I note that there is no question here of a separate and exclusive retainer of Slaughter and May by some only of the joint clients). I agree with this statement of the law in Thanki "The Law of Privilege" para 6.12:-
"….in order for joint privilege to arise the joint interest must exist at the time that the communication comes into existence. If the parties subsequently fall out and sue one another, neither of them can claim privilege as against the other in respect of any documents that are caught by the joint privilege, as the original joint interest is not destroyed by a subsequent disagreement between the parties…"
I consider that the authorities also establish that privilege cannot be asserted as between partners in relation to any documents concerning the partnership's affairs: Re Pickering (1883) 25 ChD 247. Slaughter and May's advice was undoubtedly sought and tendered in relation to the partnership's affairs and forms part of the books and records of the partnership." (BBGP Managing General Partner Limited v. Babcock & Brown Global Partners [2010] EWHC 2176 (Ch), Norris J)

Privileged as against each other after actual of conflict of interest arises

"[13] ... Moreover the waiver of privilege implied from the existence of the joint retainer is based on the normal rules for the implication of contractual terms. I do not consider that any of those principles (necessity, the officious bystander, business efficacy etc) could justify the implication of a waiver extending to communications made by one client to the common solicitor after an actual conflict of interest had emerged but in ignorance of it." (TSB Bank Plc v. Robert Irving & Burns [2000] 2 All ER 826, Morritt LJ)

Potential conflict not sufficient

"I only wish to emphasise one point in my Lord's judgment. This is that the waiver of privilege implicit in the joint retainer extends to communications made by the insured to the solicitors where there is merely a possible conflict of interest. Without such a waiver I can see that it would be very difficult for a solicitor ever to accept a joint retainer in a case such as this. Many solicitors do, and it is in the interests of both insurers and insureds that they should continue to be able to do so. It is only where, as here, there is an actual conflict of interest that the waiver comes to an end and even then it will continue if, after notification of the conflict, the insured decides not to instruct separate solicitors. For these reasons I do not think that this clarification of the law will cause real difficulty in practice." (TSB Bank Plc v. Robert Irving & Burns [2000] 2 All ER 826, Tuckey LJ)

Joint interest

"[55] ... First, the joint interest must exist at the time that the communications which are in issue come into existence. Secondly, the communications must have come into being for the furtherance of the joint interest. Thirdly, it remains unclear whether a client is necessarily prevented from asserting privilege in advice he has obtained simply because someone else, who was not a party to the original lawyer-client relationship, can assert a joint interest in the advice." (Kousouros v. O'Halloran [2014] EWHC 2294 (Ch), Simon J)

"[16]...In short, joint interest privilege can arise in two circumstances. First, when two or more legal persons jointly retain the same lawyer. Secondly when, even though there is no joint retainer, the parties have a joint interest in the subject matter of the communication in issue at the time that it comes into existence. As Mr Thanki puts it in his book: "… the document must have come into being for the furtherance of the joint purpose or interest." It is common ground that such an interest may arise between a company and its directors." (R (oao Ford) v. FSA [2011] EWHC 2583 (Admin), Burnett J)

Waiver

See M6: Privilege

Joint privilege

Common interest privilege 

 

"[88] This is not a separate type or category of legal professional privilege. It is simply a convenient way of describing the principle under which communications between parties with a common interest may be entitled to protection from disclosure. The law was stated by Brightman LJ in Buttes Gas & Oil Company v Hammer (No 3) [1981] 1 QB 223 at page 267H as follows:
"…if two parties with a common interest and a common solicitor exchange information for the dominant purpose of informing each other of the facts, or the issues, or advice received, or of obtaining legal advice in respect of contemplated or pending litigation, the documents or copies containing that information are privileged from production in the hands of each. …"
[89] The parties must therefore share a common solicitor and the information must itself be privileged from disclosure in the hands of the communicating or primary party. The privilege can be either legal advice privilege or litigation privilege. The second party obtains the same protection in respect of the shared material by establishing that it was disclosed to him in recognition of his shared or common interest in the subject matter of the communication." (Dadourian Group International Inc v. Simms [2008] EWHC 1784 (Ch), Patten J)

Shareholder of company has common interest privilege but not shareholder of shareholder

"[59]...Can the direct shareholder in turn share the material with its shareholders upon the same principle? I answer that question in the negative, on grounds of policy rather than principle. Bringing within the ring of privilege the shareholder of the company which was the actual client of the solicitor on the ground of common interest is well settled rule. But I see no reason to extend the entrenchment upon the basic rule of privilege all the way up the chain of holding companies notwithstanding the steady dilution of that common interest." (BBGP Managing General Partner Limited v. Babcock & Brown Global Partners [2010] EWHC 2176 (Ch), Norris J)

Unless the advice relates to potential proceedings between the shareholder and the company

"[59]...In my judgment the principle which enables the company to keep from the shareholder (on the ground of lack of common interest) legal advice taken by the company in connection with actual or contemplated proceedings between the company and that shareholder applies whatever the nature of the dispute. The dispute does not have to be between the company and the shareholder in relation to the company's internal affairs (though that is the usual context in which it comes before the Court). If the company is in dispute with the shareholder about some service provided at arm's length by the shareholder to the company there is equally no common interest in the advice obtained. Since it does not appear clear from the evidence that General's direct shareholder is a company against whom no claim could be brought by Global (as part of its claims against the B&B Group) I hold that it is not entitled to see any communications passing between Slaughter and May and Global relating to the External Claims." (BBGP Managing General Partner Limited v. Babcock & Brown Global Partners [2010] EWHC 2176 (Ch), Norris J) 

Common interest privilege 

Joint interest v. common interest

 

Joint interest privilege applies as between the parties whether or not document has been shared by one party

"[10] Where a solicitor acts on a joint retainer by two or more clients in relation to the same matter then, subject to any agreement between them to the contrary, there will generally be no obligation on the solicitor to keep his communications with one of those clients confidential from the other. In that context, his obligation of confidence to his joint clients may only be released by all of them acting together." (Singla v. Stockler [2012] EWHC 1176 (Ch)

Common interest privilege applies as between the parties where a document has been voluntarily shared and prevents reliance on privilege to avoid use of the document as between the parties to the privilege

"The Concept of ‘common interest privilege’ whereby confidential documents which have been disclosed to another person remain privileged as against third parties has developed through a more recent line of authority beginning, at least in modern times, with Buttes v Hammer (No. 3) . It is concerned with the effect of the confidential communication of a privileged document to a person who has a common interest in its subject matter or in litigation in connection with which the document was brought into being. The examples offered by Lord Denning MR and Donaldson LJ in that case suggest that the privilege essentially depends on the parties' common interest in the subject matter of the communication and in the confidentiality of the document in question. It is the communication in confidence to another interested party under those circumstances that requires the privilege to be available in respect of the document in his hands, whether or not he had the right to require that the document be disclosed to him." (Commercial Union Assurance Co plc v. Mander[1997] CLC 32 at 37 - 38)

Joint interest v. common interest

Legal advice privilege does not apply to communications with third parties

 

"[46] The privilege applies to communications only for the purpose of obtaining or giving legal advice, and not (e.g.) other professional or commercial advice. Wheeler v Le Marchant (cited in paragraph 1 above) concerned the disclosure of various documents passing between a client and his surveyor, which appear to have included not only primary factual information but also surveying advice and opinion. Cotton LJ said (at pages 684-5):

"It is said that as communications between a client and his legal advisers for the purpose of obtaining legal advice are privileged, therefore any communication between the representatives of the client and the solicitor must be also privileged. That is a fallacious use of the word 'representatives'. If the representative is a person employed as an agent on the part of the client to obtain the legal advice of the solicitor, of course he stands in exactly the same position as the client as regards protection, and his communications with the solicitor stand in the same position as the communications of his principal with the solicitor. But these persons were not representatives in that sense. They were representatives in this sense, that they were employed on behalf of the clients, the defendants, to do certain work, but that work was not the communicating with the solicitor to obtain legal advice. So their communications cannot be protected on the ground that they are communications between the client by his representatives and the solicitor. In fact, the contention of the Respondents comes to this, that all communications between a solicitor and a third person in the course of his advising his client are to be protected. It was conceded there was no case that went that length, and the question is whether, in order fully to develop the principle with all its reasonable consequences, we ought to protect such documents. Hitherto such communications have only been protected when they have been in contemplation of some litigation, or for the purpose of giving advice or obtaining evidence with reference to it. And that is reasonable, because then the solicitor is preparing for the defence or for bringing the action, and all communications he makes for that purpose, and the communications made to him for the purpose of giving him the information, are, in fact, the brief in the action, and ought to be protected. But here we are asked to extend the principle to a very different class of cases, and it is not necessary, in order to enable persons freely to communicate with their solicitors and obtain their legal advice, that any privilege should be extended to communications such as these."

Therefore, as Longmore LJ said in Three Rivers (No 5) (at [18]):

"This case thus makes clear that [LAP] does not extend to documents obtained from third parties to be shown to a solicitor to advise."" (Civil Aviation Authority v. Jet2.comLimited [2020] EWCA Civ 35)

"[75] In Three Rivers (No 5) the Court of Appeal correctly identified Wheeler v Le Marchant as authority that legal advice privilege does not extend to documents obtained from third parties to be shown to a solicitor for advice. Such documents may only be protected under litigation privilege, if the conditions for claiming such privilege are made out. The expression "third parties" in this context means anyone other than the client or someone he has authorised to obtain the legal advice on his behalf, so that the communication can properly be characterised as a "communication between the client by his representatives and the solicitor"."  (Director of Serious Fraud Office v. Eurasian Natural Resources Corporation Ltd [2017] EWHC 1017 (QB), Andrews J)

Legal advice privilege does not apply to communications with third parties

Communications with multiple persons, including lawyers: apply dominant purpose test

"[100]...In my view, the following is the appropriate approach to multi-addressee emails such as those of which Jet2 seek disclosure in this case.
i) As I have indicated, the dominant purpose test applies to LAP. As I have indicated (paragraph 67 above), although the general role of the relevant lawyer may be a useful starting point (and may, in many cases, in practice be determinative), the test focuses on documents and other communications and has to be applied to each such.

ii) In respect of a single, multi-addressee email sent simultaneously to various individuals for their advice/comments, including a lawyer for his input, the purpose(s) of the communication need to be identified. In this exercise, the wide scope of "legal advice" (including the giving of advice in a commercial context through a lawyer's eyes) and the concept of "continuum of communications" must be taken fully into account. If the dominant purpose of the communication is, in substance, to settle the instructions to the lawyer then, subject to the principle set out in Three Rivers (No 5) (see paragraphs 47 and following above), that communication will be covered by LAP. That will be so even if that communication is sent to the lawyer himself or herself, by way of information; or if it is part of a rolling series of communications with the dominant purpose of instructing the lawyer. However, if the dominant purpose is to obtain the commercial views of the non-lawyer addressees, then it will not be privileged, even if a subsidiary purpose is simultaneously to obtain legal advice from the lawyer addressee(s).

iii) The response from the lawyer, if it contains legal advice, will almost certainly be privileged, even if it is copied to more than one addressee. Again, whilst the dominant purpose test applies, given the wide scope of "legal advice" and "continuum of communications", the court will be extremely reluctant to engage in the exercise of determining whether, in respect of a specific document or communication, the dominant purpose was the provision of legal (rather than non-legal) advice. It is difficult to conceive of many circumstances in which such an exercise could be other than arid and unnecessary.

iv) There was some debate before us – as there is in the textbooks (e.g. in Hollander (see paragraph 91(iii) above)) – as to whether multi-addressee communications should be considered as separate bilateral communications between the sender and each recipient, or whether they should be considered as a whole. My preferred view is that they should be considered as separate communications between the sender and each recipient. LAP essentially attaches to communications. Where the purpose of the sender is simultaneously to obtain from various individuals both legal advice and non-legal advice/input, it is difficult to see why the form of the request (in a single, multi-addressee email on the one hand, or in separate emails on the other) in itself should be relevant as to whether the communications to the non-lawyers should be privileged. That is not to say, of course, that the form may not in some cases reveal the true purpose of the communication, e.g. it may appear from the form of the email that the dominant purpose of the email is to settle the instructions to the lawyer who has merely been copied in by way of information, or to the contrary that the dominant purpose of sending the email to the non-lawyers is to obtain their substantive (non-lawyer) input in any event.

v) In my view, there is some benefit in taking the approach advocated by Hollander (at paragraph 17-17), namely to consider whether, if the email were sent to the lawyer alone, it would have been privileged. If no, then the question of whether any of the other emails are privileged hardly arises. If yes, then the question arises as to whether any of the emails to the non-lawyers are privileged, because (e.g.) its dominant purpose is to obtain instructions or disseminate legal advice.

vi) However, whether considered as a single communication or separate communications to each recipient, and whilst there may perhaps be "hard cases", I doubt whether in many cases there will be any difference in consequence, if the correct approach to LAP is maintained. Where there is a multi-addressee email seeking both legal advice and non-legal (e.g. commercial) advice or input, if regarded as separate communications, those to and from the lawyer will be privileged: otherwise, they will not be privileged, unless the real (dominant) purpose of a specific email to/from non-lawyers is that of instructing the lawyer. If it is not for that purpose, in most cases, the email as a whole will clearly not have the dominant purpose of obtaining legal advice.

vii) I agree with Morris J, that, where a communication might realistically disclose legal advice (in the sense of there being a realistic possibility of it disclosing such advice), then that communication will in any event be privileged (see paragraph 27 above). However, in respect of the relevant documents in this case, on the basis of that test, as I understand it, Ms Brooks appears to have considered that none would or might disclose such advice (see paragraph 28 above).

viii) Mr Grodzinski suggested that this approach would cause difficulties in terms of meetings (including records of meetings), attended by non-lawyers and lawyers, at which commercial matters were discussed with the lawyer adding legal advice and input if and when required. The whole of what transpires at such a meeting, he submitted, should be the subject of LAP. However, I disagree; and consider the same principles set out above as applying to documents and other communications are applicable. Legal advice requested and given at such a meeting would, of course, be privileged; but the mere presence of a lawyer, perhaps only on the off-chance that his or her legal input might be required, is insufficient to render the whole meeting the subject of LAP so that none of its contents (including any notes, minutes or record of the meeting) are disclosable. If the dominant purpose of the meeting is to obtain legal advice (or, subject to the principle set out in Three Rivers (No 5) (see paragraphs 47 and following above), to settle instructions to a lawyer), unless anything is said outside that legal context, the contents of the meeting will be privileged. If the dominant purpose of the discussions is commercial or otherwise non-legal, then the meeting and its contents will not generally be privileged; although any legal advice sought or given within the meeting may be. It is likely that, where not inextricably intermingled, the non-privileged part will be severable (and, on disclosure, redactable) (see paragraph 69 above)." (Civil Aviation Authority v. Jet2.com Limited [2020] EWCA Civ 35)

Communications with multiple persons, including lawyers: apply dominant purpose test

Identifying the client

 

Employees authorised to seek legal advice on behalf of the employer

"[71] I accept that the question "who is the client to whom the lawyer owes a duty?" and the question "who has the client authorised to act on his behalf in communicating with the lawyers?" are different; but in this specific context it is important to bear in mind that the privilege attaches only to those communications between lawyer and client (or the client's authorised representative) whose purpose is obtaining legal advice.
[72] Mr Lissack relied on the way in which the judgment in Three Rivers (No 5) was interpreted by the Court of Appeal of Singapore in the case of Skandinaviska Enskilda Banken AB v Asia Pacific Breweries (Singapore) Pte Ltd and others [2007] SGCA 9. It said, at [41]:
"The principle is that if an employee is not authorised to communicate with the company's solicitors for the purpose of obtaining legal advice, then that communication is not protected by legal advice privilege. We do not find this principle exceptional. When a company retains solicitors for legal advice, the client must be the company. But since a company can only act through its employees, communications made by employees who are authorised to do so would be communications made "on behalf of his client". The only relevant issue is whether the communication is made for the purpose of obtaining legal advice, and if so, the communication falls within the privilege provided the other requirements of the privilege are present, viz, that the communications are confidential in nature, and the purpose of the communication is for the purpose of seeking legal advice. Authorisation need not be express; it may be implied, if that function is related to or arises out of the relevant employee's work."
[73] On the face of it that analysis seems uncontroversial. However, the phrase "authorised to communicate with the company's solicitors for the purpose of obtaining legal advice" is ambiguous. The narrower interpretation, consistent with Three Rivers (No 5), is that the employee must be authorised to seek/obtain the legal advice that is the reason for the communication, so that on the application of basic agency principles they are to be regarded as standing in the shoes of the client for the purposes of obtaining the legal advice. If and to the extent the Singapore Court was adopting the wider interpretation, namely, that even if the employee is only authorised to provide the solicitors with information that would equip them to give legal advice to others within the company, that is a communication "for the purpose of obtaining legal advice", that was the proposition which the Court of Appeal expressly rejected.
[74] The judgments of the Court of Appeal in Wheeler v Le Marchant (1881), which played a large part in the Court of Appeal's reasoning in Three Rivers (No 5), support the proposition that privilege will not attach to the employee's (or anyone else's) communication with the lawyer unless that person is acting as the client's agent for the purpose of obtaining the legal advice (in the sense that he has been tasked with obtaining it)."  (Director of Serious Fraud Office v. Eurasian Natural Resources Corporation Ltd [2017] EWHC 1017 (QB), Andrews J)

Not employees only authorised to provide facts to lawyers (questionable)

"[47]...The fourth proposition derived from the authorities is that material collected by a client (or by his lawyer on his behalf) from third parties or independent agents for the purposes of instructing lawyers to give advice is not covered by LAP; and, further, where the relevant client is a corporation, documents or other materials between an employee of that corporation and a co-employee or the corporation's lawyers, even if required or designed to equip those lawyers to give legal advice to the corporation, do not attract LAP unless the employee was tasked with seeking and receiving such advice on behalf of the company (Three Rivers (No 5) at [8] and following, and the judgment of this court (Sir Brian Leveson PQBD, Sir Geoffrey Vos C and McCombe LJ) in Director of the Serious Fraud Office v Eurasian Natural Resources Corporation Limited [2018] EWCA Civ 2006; [2019] 1 WLR 791 ("Eurasian") especially at [79]-[81] and [123]-[130]).

...

[55] The constitution of this court in Eurasian indicated that, if it had been open to it to depart from Three Rivers (No 5) on this issue, it would have done so...

[56] I respectfully agree. In addition:
i) Three Rivers (No 5) does not appear to allow for any caveats to the proposition that material sent by a third party/agent/employee to a lawyer (and vice versa) is not covered by LAP. However, where lawyers are instructed, the individual within a corporation instructing them must be able to ensure that the instructions are in accordance with the wishes of the senior executives in the company, which may involve input from more junior employees who are knowledgeable about the relevant issues. Internal communications settling instructions must be covered by LAP. It is unclear to me how the proposition in Three Rivers (No 5) quite allows for that.

ii) For no obvious reason, the law in relation to LAP as set out in Three Rivers (No 5) in respect of collection of information for the instruction of lawyers appears to be out of line with the law in respect of the dissemination of advice from lawyers, once received (i.e. Proposition 2, as described in paragraph 45 above).

[57] For those reasons, like the constitution of the court in Eurasian, on the basis of both principle and practical application, I respectfully doubt both the analysis and conclusion of this court in Three Rivers (No 5) on this issue; and, had it been in this court's power, I too would be disinclined to follow it." (Civil Aviation Authority v. Jet2.comLimited [2020] EWCA Civ 35)

Wide approach to identifying employees authorised to seek legal advice

"[59] However, the facts of this case – and the issue to which they give rise – are significantly different from those in Three Rivers (No 5). In that case, the relevant lawyers (Freshfields) were external; and the issue was whether, in advising on the presentation of evidence to the Bingham Inquiry, they were involved qua lawyers; and therefore whether the communications concerning that advice could be in respect of "legal advice" so that they were covered by LAP. The relevant lawyers in this case were in-house; and Morris J found that the in-house lawyers were involved in the internal correspondence qua lawyers rather than merely as executives providing commercial advice (see paragraph 22 above). The relevant non-lawyers were all relatively senior executives. There appears to be no evidence suggesting that any of those involved in the relevant internal correspondence did not have the ability to seek legal advice from those lawyers, or that, for these purposes, they were not "an emanation of the client". It seems to me that, on the evidence, in this case each of the non-lawyers involved fell within the scope of "client" so far as the lawyers involved were concerned. Therefore, leaving aside for the moment the question of whether the purpose has to be "dominant", LAP will attach to any confidential communication between a lawyer and a non-lawyer in this case, made for the purpose of giving or obtaining legal advice. As I understood his submissions, Mr Béar did not suggest the contrary." (Civil Aviation Authority v. Jet2.comLimited [2020] EWCA Civ 35)

Identifying the client

Communications through agents are protected

 

Must be communicating to/from client rather than producing the material itself

"Price Waterhouse (or the investigating committee) was not merely the appointed channel of communication. It was not merely an agent for communicating material from BCCI to Allen & Overy; it was charged with the duty of bringing the material into existence. In so far as it reported to Allen & Overy (if indeed it did), it was not passing on a communication from BCCI; it was producing material for BCCI and, at BCCI's direction, forwarding it to Allen & Overy direct instead of to BCCI with a view of its being sent on to Allen & Overy. In my judgment, its position was not essentially different from that of the surveyors in Wheeler v Le Marchant (1881) 17 Ch D 675 or the loss-adjusters and other experts in Re Highgrade Traders Ltd." (Price Waterhouse v. BCCI [1992] BCLC 583 at 589)

Communications through agents are protected

Agent appointed to obtain legal advice

 

Agent's communications with lawyer are privileged if appointed to obtain advice

"[83] Thus, I have reached a clear conclusion that, in answer to the question posed above, the conversation between W and Miss Spurway (or conversations, if there was more than one) cannot on any view be said to attract the protection of LPP (and specifically LAP). These were simply conversations between friends. During the course of one of those conversations, W learnt that Miss Spurway had been able (through assistance from a friend of hers, unknown to W) to identify a 'top family lawyer' with whom contact had been established through the good offices of this friend. W accepted her friend's offer to speak to this lawyer with a view, as I find, to securing a recommendation as to whom she might go to for professional advice. I can find no basis whatsoever for a finding that she specifically authorised her friend to secure that advice from DBQC on her behalf." (G v. G [2015] EWHC 1512 (Fam), Roberts J)

Agent appointed to obtain legal advice

Only communications containing or disclosing the nature of legal advice given or sought

"[45] Although the privilege attaches to communications between a lawyer and his client, the law recognises that legal advice is not given for hypothetical purposes, but to be considered and (insofar as accepted) applied by the client. It is therefore well-established that it covers, not only a document from the lawyer containing advice and the client's own written record of advice (whether given in writing or orally), but also any communication (again, whether written or oral) passing on, considering or applying that advice internally (Bank of Nova Scotia v Hellenic Mutual War Risks Association (Bermuda) Limited (The Good Luck) [1992] 2 Lloyd's Rep 540 ("The Good Luck") at pages 540-1 per Saville J, and USP Strategies Plc v London General Holdings Limited [2004] EWHC 373 (Ch) ("USP Strategies") at [19(c)] per Mann J). Indeed, there are circumstances in which the privilege will attach to the dissemination of advice to third parties (USP Strategies and Gotha City v Sotheby's [1998] 1 WLR 114). Equally, LAP attaches to communications from a lawyer to a third party containing information provided by the client to the lawyer which is covered by LAP and which the client has given the lawyer authority to disclose (Raiffeisen Bank International AG v Asia Coal Energy Ventures Limited and Ashurst LLP [2020] EWCA Civ 11 at [63])." (Civil Aviation Authority v. Jet2.com Limited [2020] EWCA Civ 35)

"[26] In respect of each document, it is necessary to consider whether the communication contained within (or the communication it evidences) is a communication between a client and a lawyer in which legal advice is sought or given or is part of the continuum of keeping solicitor and client informed.  Legal advice is the application of the law, a person’s rights and responsibilities and what should prudently and sensibly be done in the legal context.   

[27] Each document should be considered separately but viewed in the context of the communications which precede and follow it." (Wiseman v. HMRC [2022] UKFTT 75 (TC), Judge Bailey)

Wide approach to legal advice

"[60] The focus therefore turns to the scope of "legal advice" for these purposes, and the fifth proposition namely that, for LAP to apply, the communication must be made "in a legal context" (the first limb), but otherwise "legal advice" is widely defined (the second limb).

...

[69] Therefore, summarising the position as indicated by the authorities (and still leaving aside for the time being the issue of whether the relevant purpose has to be "dominant"):
i) Consideration of LAP has to be undertaken on the basis of particular documents, and not simply the brief or role of the relevant lawyer.

ii) However, where that brief or role is qua lawyer, because "legal advice" includes advice on the application of the law and the consideration of particular circumstances from a legal point of view, and a broad approach is also taken to "continuum of communications", most communications to and from the client are likely to be sent in a legal context and are likely to be privileged. Nevertheless, a particular communication may not be so – it may step outside the usual brief or role.

iii) Similarly, where the usual brief or role is not qua lawyer but (e.g.) as a commercial person, a particular document may still fall within the scope of LAP if it is specifically in a legal context and therefore, again, falls outside the usual brief or role.

iv) In considering whether a document is covered by LAP, the breadth of the concepts of legal advice and continuum of communications must be taken into account.

v) Although of course the context will be important, the court is unlikely to be persuaded by fine arguments as to whether a particular document or communication does fall outside legal advice, particularly as the legal and non-legal might be so intermingled that distinguishing the two and severance are for practical purposes impossible and it can be properly said that the dominant purpose of the document as a whole is giving or seeking legal advice.

vi) Where there is no such intermingling, and the legal and non-legal can be identified, then the document or communication can be severed: the parts covered by LAP will be non-disclosable (and redactable), and the rest will be disclosable (see, e.g., Curlex Manufacturing Pty Limited v Carlingford Australia General Insurance Limited [1987] Qd R 335 and GE Capital Corporate Finance Group Limited v Bankers Trust Company [1995] 1 WLR 172).

vii) A communication to a lawyer may be covered by the privilege even if express legal advice is not sought: it is open to a client to keep his lawyer acquainted with the circumstances of a matter on the basis that the lawyer will provide legal advice as and when he considers it appropriate." (Civil Aviation Authority v. Jet2.com Limited [2020] EWCA Civ 35)

Fact that a non-privileged document has been sent to client's lawyer is not protected

"[54] The arguments before this court were more subtle. Mr Lissack accepted that pre-existing documents are not covered by privilege simply because they are sent to a legal adviser. He drew a distinction, however, between whether a particular document was privileged (in this case, the attachment itself) and whether a particular communication was privileged (the communication in this case being of the fact that the attachment had been sent to its legal adviser for advice). This did not, as I understood it, amount to reliance on the line of case law conferring privilege on documents or selections from documents which reveal the "trend of advice" provided by the legal adviser: see Lyell v Kennedy (No 3) (1884) 27 Ch. D 1 discussed by Bingham LJ in Ventouris at p. 615A-F.

...

[61] I would reject this ground of appeal and hold that on a proper construction of the Notice, an attachment is to be regarded as meeting the four criteria in the Notice if it is attached to an email which meets the four criteria. If the email is itself privileged, that does not confer privilege on the pre-existing document because on the authority of Ventouris, privilege does not protect either the document itself or the fact that it was sent to a legal adviser under cover of a privileged communication." (Sports Direct International Plc v. FRC [2020] EWCA Civ 177, Rose LJ)

Only communications containing or disclosing the nature of legal advice given or sought

Dominant purpose of the communication or document must be to obtain or give legal advice

"[96]...whilst I readily accept that the jurisprudence is far from straightforward and the authorities do not speak with a single, clear voice, I consider Morris J was correct to proceed on the basis that, for LAP to apply to a particular communication or document, the proponent of the privilege must show that the dominant purpose of that communication or document was to obtain or give legal advice." (Civil Aviation Authority v. Jet2.com Limited [2020] EWCA Civ 35)

[18] The parties differ on whether it is necessary, when legal advice privilege is claimed, to consider the dominant purpose of the communication in order to determine whether a document is privileged.  HMRC argue that such consideration is necessary.  The Applicant disagrees and also argues that, in any event, the nature of the communications was entirely bilateral (by which I understand the Applicant to be stating that each communication was between a lawyer and client only).  

[19] In light of the recent decision of the Court of Appeal in CAA v R (oao Jet2.com Limited) [2020] EWCA Civ 35 read as a whole (but in particular paragraph 96), I agree with HMRC that, when considering whether legal advice privilege applies to a document, it is relevant to ask for what purpose or purposes the communication was made, and whether the dominant purpose was the giving or seeking of legal advice.

[20] However, as the Applicant noted, CAA v R (oao Jet2.com Limited) concerned a dispute where the documents in dispute were emails sent to multiple recipients, not all of whom were lawyers.  So, while I consider that the question of whether the dominant purpose of a communication is to seek or receive legal advice, can still arise when that communication is between only a lawyer and a client, I consider it is significantly less likely that such a communication will have a purpose other than the seeking or receiving legal advice.  I note the comments of Hickinbottom L.J. (at paragraph 100(iii) of CAA v R (oao Jet2.com Limited)) that: "The response from the lawyer, if it contains legal advice, will almost certainly be privileged, even if it is copied to more than one addressee."

...

[28] Where there may be more than one purpose for the communication it is necessary to consider whether the dominant purpose is the seeking or giving of legal advice.  If the dominant purpose of a communication is to seek or give legal advice then the document containing or evidencing that communication will be privileged.  If the dominant purpose of the communication was non-legal, then the document will not be privileged. " (Wiseman v. HMRC [2022] UKFTT 75 (TC), Judge Bailey)

View from perspective of author of document

"[21] Although neither party specifically addressed the point, I consider that the dominant purpose is ordinarily to be viewed from the perspective of the author of the document or the person under whose direction the document was created.  I reach that conclusion on the basis of dicta in Grant v Downs 135 CLR 674 at 677 and (more recently and within this jurisdiction) the decision in Property Alliance Group v RBS [2015] EWHC 3341.  Although both of those decisions are concerned with litigation privilege, it would be illogical for the dominant purpose test to apply both to litigation privilege and legal advice privilege, and yet for that test to be applied from a different perspective depending on whether litigation privilege or legal advice privilege is claimed." (Wiseman v. HMRC [2022] UKFTT 75 (TC), Judge Bailey)

Dominant purpose non-legal but contains legal advice: redact if it can be separated

"[24] However, I also agree with the Applicant that there may be practical difficulties in separating the parts of a document so that the privileged parts can be redacted.  The dicta quoted in the preceding paragraph suggests that in a document relating to communications with a non-legal dominant purpose, that also contains or evidences privileged communications then, to the extent that the two types of communications cannot be separated, the inextricably intermingled privileged communications should also be disclosed. 

...

[28] If the dominant purpose of the communication was non-legal, then the document will not be privileged. 

[29]  Legal advice in that document which can be separated should be redacted before the document is disclosed." (Wiseman v. HMRC [2022] UKFTT 75 (TC), Judge Bailey)

Example: meeting notes with dominant purpose of accountant providing information disclosable in full

"[40] While I accept that part of the purpose of the communications at this meeting was the continuum of keeping client and solicitor informed, I have concluded - in light of the privileged communications before and after the meeting - that - from the perspective of Turcan Connell - the dominant purpose of the communications at the 31 July 2002 meeting was for Tenon to present information to the Applicant. 

[41]  Having concluded that the dominant purpose of the communications at the meeting on 31 July was not the provision of legal advice, it follows that the two documents relating to the 31 July 2002 meeting are not privileged from disclosure.

[42] Insofar as either document would reveal what appears to be the giving or seeking of legal advice or the scope of that advice, and insofar as that material is not inextricably intermingled, then those parts should be redacted.  However, where it is not possible to separate legal advice or the scope of the legal advice, then the privileged parts cannot be redacted. 

[43] I have given this aspect very careful consideration.  I have eventually decided that it is not possible to extricate privileged communications from these two documents.  Therefore, no part of the documents relating to the meeting of 31 July 2002 meeting should be withheld from disclosure." (Wiseman v. HMRC [2022] UKFTT 75 (TC), Judge Bailey)

Consider emails and attachments separately 

"[107] In giving disclosure, some separate consideration of substantive documents and attachments therefore has to be undertaken. Whilst an email and attachment can be regarded as a single communication, separate consideration will need to be given to the attachment, given that it will have been received or created by the sender, and therefore may require discrete consideration." (Civil Aviation Authority v. Jet2.com Limited [2020] EWCA Civ 35)

Dominant purpose of the communication or document must be to obtain or give legal advice

Includes the fact that a person sought legal advice on a particular matter

"[22]...LPP must extend not only to the content of the legal advice but the fact that a person sought legal advice on any particular matter.  Therefore, to the extent that an engagement letter sets out what the advice will cover it must be subject to LPP." (Wiseman v. HMRC [2022] UKFTT 75 (TC), Judge Bailey)

Includes the fact that a person sought legal advice on a particular matter

- Engagement letters

Engagement letters not normally privileged except to the extent that they identify the matter on which advice is sought

[23] A client engagement letter normally sets out the terms on which a solicitor will act.  It is a contract between the client and solicitor.  The solicitor cannot (and does not) give legal advice about the contract between himself and his client.  In so far as the client engagement letter, therefore, sets out the terms of the contract, it cannot attract LPP as the lawyer is not giving advice qua lawyer.  He is not giving legal advice at all. 

[24] I therefore reject the appellant’s submission that engagement letters are by their nature subject to LPP.

[25] However, all this depends on what the actual engagement letter says.  If it goes beyond setting out the terms on which the solicitor will act it may attract LPP at least in part.

[26] In particular, it is likely that an engagement letter will specify the particular matter or matters on which the solicitor is contracted to provide legal advice.  Does this make the whole or part of the letter subject to LPP?  It seems to me that it must.  The justification for LPP is that:

“a client should be able to obtain legal advice in confidence…otherwise he might hold back half the truth.  The client must be sure that what he tells his lawyer in confidence will never be revealed without his consent…once any exception to the general rule is allowed, the client’s confidence is necessarily lost.” R v Derby Magistrates Court Ex p B  [1996] AC 487 per Lord Taylor.

LPP must extend not only to the content of the legal advice but the fact that a person sought legal advice on any particular matter. Therefore, to the extent that an engagement letter sets out what the advice will cover it must be subject to LPP.

[27]   In this case I therefore find that the client engagement letter dated 10 May 2005 is not in general subject to LPP. Nevertheless those parts of the letter which set out the legal advice for which Baxendale-Walker was retained are subject to LPP.  The parts of the letter which are subject to LPP  are:

(a)        The first heading;

(b)        The first sentence under the first heading;

(c)        The first paragraph (including its numbered sub-paragraphs 1-6) under the heading  “Work to be performed”;" (Behague v. HMRC [2013] UKFTT 596 (TC), Judge Mosedale)

- Engagement letters

- End product of advice not privileged 

 

"That still leaves the main issue to be resolved, namely is conveyancing matter of itself privileged as coming within the meaning of the giving of advice? We were referred to no authority. I doubt that any is needed for the proposition that the document known as the conveyance is not clothed with privilege and I do not see why conveyancing matter, as I have called it, can validly be said to be, seeing that in my opinion in common sense it cannot be called advice consisting as it does of records of the financing of the purchase of, in this case, a house." (R v. Inner London Crown Court ex p. Baines & Baines [1988] QB 579)

- End product of advice not privileged 

- Lawyer's working papers privilege

 

[99] It is common ground that in English law, lawyers' working papers are privileged under the legal professional privilege doctrine: see the Court of Appeal in Balabel and Three Rivers (No 5) at para. 30, although it does appear (as the Claimants noted) that in each case the point was assumed without any principled discussion.
[100] The justification for withholding such documents given by the Court of Appeal in Lyell v Kennedy (No 3) (1884) 27 Ch D 1 (itself taken by the Supreme Court of Victoria in Telebooth v Telstra [1994] 1 VR 337 to be the origin of the lawyers' working papers doctrine) was that disclosure of them would be (per Cotton LJ at 26):
"giving [the party requesting disclosure] a clue to the advice which had been given by the solicitor and giving them the benefit of the professional opinion which had been formed by the solicitor.

...

[105] Thus, RBS must demonstrate some attribute of or addition to the relevant Interview Notes which distinguishes them from verbatim transcripts or reveals from an evident process of selection the trend of legal advice being given, and is such as to trigger their protection as lawyers' working papers.
[106] In this context, Warren J in Stax Claimants v Bank of Nova Scotia [2007] EWHC 1153 (Ch) contrasted (at §10) a note which "records the substance of a conversation" (which would not be privileged) with a note which also records "the note-taker's own thoughts and comments on what he is recording with a view to advising his client" (which almost certainly would be privileged).
[107] The claim thus involves proving facts which demonstrate that the documentation for which privilege is asserted does have some attribute or addition such as to betray or at least give a clue as to the trend of advice being given to the client by its lawyer." (Re RBS Rights Issue Litigation [2016] EWHC 3161 (Ch), Hildyard J)

 

Solicitor notes of interview with employees not protected

"[97] In my judgment, the approach taken by Warren J and Hildyard J is right, and the protection afforded to lawyers' working papers is justified if, and only if, they would betray the tenor of the legal advice. A verbatim note of what the solicitor was told by a prospective witness is not, without more, a privileged document just because the solicitor has interviewed the witness with a view to using the information that the witness provides as a basis for advising his client. In other words, the client cannot obtain the protection of legal advice privilege over interview notes that would not be privileged if he interviewed the witness himself, or got a third party to do so, simply because he procured his lawyer to interview the witness instead." (Director of Serious Fraud Office v. Eurasian Natural Resources Corporation Ltd [2017] EWHC 1017 (QB), Andrews J)

Even if they may identify a train of enquiry

"[125]...In short, all that has really been offered by way of discharging the burden on RBS is that (a) the Interview Notes carry the annotation as to "mental impressions" described above because (b) they reflect preparation which reveals the lawyers' "train of inquiry" and because (c) being a note not a transcript, some greater or lesser degree of selection is reflected.

[126] This, in my judgment, is not sufficient: the evidence is not such as to substantiate the claim to privilege on the basis of "lawyers' working papers". My conclusion is reinforced by the consideration that there is a real difference between reflecting "a train of inquiry" and reflecting or giving a clue as to the trend of legal advice, and indeed that this difference was recognised and approved in Sumitomo in the Court of Appeal." (Re RBS Rights Issue Litigation [2016] EWHC 3161 (Ch), Hildyard J)

- Lawyer's working papers privilege

- Communications re new corporate structure protected

 

"[33] Having carefully considered each of the Disputed Documents I have come to the conclusion that, given the comment of Nugee LJ in Frasers Group (see paragraph 14, above), which as decision of the High Court is binding on the First-tier Tribunal although not the Upper Tribunal, that litigation privilege cannot apply to the Disputed Documents which are primarily concerned with the implementation of an alternative corporate structure.

[34] With regard to LAP it is necessary to consider the question posed by Lord Scott in Three Rivers (6) (see paragraph 11, above), ie whether the advice relates to the rights, liabilities, obligations or remedies of the client either under private law or under public law and, if it does, whether the occasion on which the communication takes place and the purpose for which it takes place is such as to make it reasonable to expect the privilege to apply?

[35] Having adopted such an approach in relation to the Disputed Documents (and being mindful of rule 9 of the 2009 Regulations I say no more about them) I am, on balance, satisfied that these do represent communications which are part of the continuum of communications with a dominant purpose of providing legal advice by TR Legal to TR’s senior decision makers.

[36] It therefore follows that the Disputed Documents are subject to LAP. Accordingly the application succeeds and applicants are not obliged to disclose any part of the Disputed Documents to HMRC." (Refinitiv UK Holdings Limited v. HMRC [2023] UKFTT 222 (TC) Judge Brooks)

- Communications re new corporate structure protected

- Conveyancing transaction documents

 

"[50] Many of the documents (electronic as well as hard copy) on a solicitor's conveyancing file will fall outside these requirements. To give three examples, (a) communications between a solicitor and persons other than the client (for example, the transaction counterparty) are unlikely to be privileged, as they are not confidential as between solicitor and client; (b) the fruits of the solicitor's advice - namely the documents giving effect to the transaction - will not be privileged as they are not communications; and (c) client ledger entries will not be privileged, as they do not contain legal advice.

[51] On the other hand, correspondence between the client and the solicitor which seeks or gives legal advice on (for example) the terms of the contract or conveyance will be subject to privilege.

[52] Although not cited to me, I am aware that in the context of s10 Police and Criminal Evidence Act 1984, the English Divisional Court in R v Inner London Crown Court ex p. Bains & Bains (a firm) [1988] Q.B. 579 held that records of a conveyancing transaction (including the conveyance and the record of how the client financed it) were not “items subject to legal privilege”. The court distinguished such documents from the solicitor’s advice on the wisdom or otherwise of proceeding with a conveyancing transaction which is privileged, and in DAC Beachcroft LLP v HMRC [2018] UKFTT 502 (TC) this Tribunal held that various documents created in the course of conveyancing transactions (such as a signed form of authority and a deed of declaration of trust) were outside the scope of legal advice privilege. Whilst these decisions are made in relation to advice privilege under English law (and the decision of the Divisional Court is a decision of an English court in relation to English criminal law), Northern Irish law relating to privilege has similarities to English law, and these decisions give an indication of the limitations of advice privilege in relation to conveyancing transactions." (HMRC v. Third Party [2023] UKFTT 71 (TC), Judge Aleksander)

- Conveyancing transaction documents

Litigation privilege

 

"[102] The conclusion to be drawn from the trilogy of 19th century cases to which I have referred and the qualifications expressed in the modern case-law is that communications between parties or their solicitors and third parties for the purpose of obtaining information or advice in connection with existing or contemplated litigation are privileged, but only when the following conditions are satisfied:
(a) litigation must be in progress or in contemplation;
(b) the communications must have been made for the sole or dominant purpose of conducting that litigation;
(c) the litigation must be adversarial, not investigative or inquisitorial." (Three Rivers DC No.6 v. Bank of England [2004] UKHL 48)

"[52] Litigation privilege relates to communications at the stage when litigation is pending or in contemplation. It is based on the idea that legal proceedings take the form of a contest in which each of the opposing parties assembles his own body of evidence and uses it to try to defeat the other, with the judge or jury determining the winner. In such a system each party should be free to prepare his case as fully as possible without the risk that his opponent will be able to recover the material generated by his preparations. In the words of Justice Jackson in Hickman v Taylor (1947) 329 US 495, 516, "Discovery was hardly intended to enable a learned profession to perform its functions either without wits or on wits borrowed from the adversary."" (Three Rivers DC No.6 v. Bank of England [2004] UKHL 48)

Litigation privilege

Actual or contemplated litigation

 

Must be a real prospect of litigation as opposed to a mere possibility 

"After careful consideration, we have reached the conclusion that the judge was wrong to conclude that a criminal prosecution was not reasonably in prospect once the SFO had written its letter of 10 th August 2011." (Director of Serious Fraud Office v. Eurasian Natural Resources Corporation Ltd [2018] EWCA Civ 2006)

"[25]...The expression -- "and could well give rise to litigation in the future" -- in paragraph [12] of his judgment is a perfectly apt description of something which would satisfy the test." (Westminster International BV v. Dornoch Ltd [2009] EWCA Civ 1323, Etherton LJ)

"[68] For my part, I do not consider that the judge misdirected himself when this long passage of his judgment is read as a whole. Some concepts are difficult to express in words. It has, for example, been notoriously difficult to express in words the meaning of such concepts as "a real prospect of success": indeed, the draftsman of CPR Part 54 included no criterion for the grant of permission to apply for judicial review because the whole topic of arguability is so fraught with difficulty. In the present case it is quite clear that the judge correctly considered that a "mere possibility" of litigation did not suffice. He was also correct to conclude that the fact that there was "a distinct possibility that sooner or later someone might make a claim" was insufficient. So was "a general apprehension of future litigation". He repeated three times that the appropriate test was that litigation must have been reasonably in prospect. The expression "real likelihood" seems to have been used as a counterpoise to "a mere possibility", and I do not consider that any more can properly be read into this phrase. The judge was certainly not saying that there must have been a greater than 50% chance of litigation." (United States of America v. Philip Morris [2004] EWCA Civ 330)

Formal investigation not necessary

"[96] As regards ENRC’s first legal point under this heading, we are not sure that every SFO manifestation of concern would properly be regarded as adversarial litigation, but when the SFO specifically makes clear to the company the prospect of its criminal prosecution (over and above the general principles set out in the Guidelines), and legal advisers are engaged to deal with that situation, as in the present case, there is a clear ground for contending that criminal prosecution is in reasonable contemplation.

...

[100] ...For the reasons we have given, Andrews J was not right to suggest a general principle that litigation privilege cannot attach until either a defendant knows the full details of what is likely to be unearthed or a decision to prosecute has been taken.  The fact that a formal investigation has not commenced will be one part of the factual matrix, but will not necessarily be determinative." (Director of Serious Fraud Office v. Eurasian Natural Resources Corporation Ltd [2018] EWCA Civ 2006)

Uncertainty and need for further investigations does not prevent litigation from being in reasonable contemplation 

"[98]  Thirdly, whilst a party anticipating possible prosecution will often need to make further investigations before it can say with certainty that proceedings are likely, that uncertainty, in our judgment, does not in itself prevent proceedings being in reasonable contemplation.  In the present case, the uncertainty was a function of ENRC not having the information required to evaluate the whistle-blower email or the Camrose issues.  An individual suspected of a crime will, of course, know whether he has committed it.  An international corporation will be in a different position, but the fact that there is uncertainty does not mean that, in colloquial terms, the writing may not be clearly written on the wall.  We think the judge was wrong to regard the uncertainty as pointing against a real likelihood of a prosecution. The reasoning in paragraphs 162-163 of her judgment could not outweigh the clear indications of a likely prosecution contained in the documents to which we have referred." (Director of Serious Fraud Office v. Eurasian Natural Resources Corporation Ltd [2018] EWCA Civ 2006)

Examples

SFO investigation expected following whistleblower email

"[92]  The contemporaneous documents do not, as the judge suggested, show that ENRC failed at the first hurdle of showing that, as at 19 th August 2011, it was “aware of circumstances which rendered litigation between itself and the SFO a real likelihood rather than a mere possibility” (adopting the test in Philip Morris HC ). Those documents demonstrate, we think, the reverse.  We refer to the following points in particular:-

i)                    In December 2010, ENRC received the whistle-blower email alleging corruption and financial wrongdoing within SSGPO and appointed DLA Piper to investigate the allegations.

ii)                  By March 2011, ENRC’s general counsel had made clear that he thought from his GC100 contacts that ENRC was firmly on the SFO’s radar and that he expected an investigation in due course, which was why he had “upgraded [ENRC’s] dawn raid procedures”.

iii)                In April 2011, ENRC’s head of compliance predicted an “SFO dawn raid … before summer’s over”.

iv)                In April 2011, Mr Gerrard wrote to Mr Barker saying that the “internal investigation at SSGPO [related] to conduct that is potentially criminal in nature” and that “[a]dversarial proceedings might occur out of the internal investigation and, in our view, both criminal and civil proceedings can be reasonably said to be in contemplation”.

v)                  When the SFO finally wrote to ENRC on 10 th August 2011, it said that the SFO was not carrying out a criminal investigation at that stage, but asked that ENRC consider the Guidelines carefully.

vi)                The Guidelines expressly said that: “ no prosecutor can ever give an unconditional guarantee that there will not be a prosecution”; “professional advisers will have a key role”; any information received by the SFO would be for the purposes of its powers under the CJA 1987; wherever possible, the investigation would be carried out by the “corporate’s” own professional advisers; and participation in the self-reporting process would increase “the prospect (in appropriate cases) of a civil rather than a criminal outcome” by reducing the likelihood that the SFO would discover corruption itself .

vii)              On 22 nd September 2011, Jones Day advised ENRC that, if it engaged in the voluntary disclosure regime, it would lose privilege in relation to the documents that it provided to the SFO.  What is notable about this memorandum is the assumption at that time that legal professional privilege would otherwise attach to those documents.

viii)            At the first meeting between ENRC and the SFO on 3 rd October 2011, the SFO said that could give no assurance that it would not prosecute.

ix)                On 18 th June 2012, the SFO met ENRC and expressed concern at the absence of a report, saying that “[i]f the investigation had stalled or been obstructed this would be regarded very negatively.  For a civil settlement to be entertained, it was essential that the investigation findings were disclosed in the near future”.

x)                  On 12 th December 2012, Dechert wrote to the SFO mentioning legal professional privilege and asking for confirmation that “if an equitable settlement [were not] reached between the SFO and ENRC, … that it [was] accepted that the report [would] not be used by the SFO as evidence of any wrongdoing or in any criminal proceedings against either ENRC, any subsidiary of ENRC or any employee or director of ENRC or its subsidiaries”.  The reply gave no such assurances.

[93] In these circumstances, it seems to us that the whole sub-text of the relationship between ENRC and the SFO was the possibility, if not the likelihood, of prosecution if the self-reporting process did not result in a civil settlement." (Director of Serious Fraud Office v. Eurasian Natural Resources Corporation Ltd [2018] EWCA Civ 2006)

No litigation in prospect

"[69] In any event, I consider that it would be impossible to conclude that litigation against BATCo itself was reasonably in prospect when that company engaged Mr Foyle's services to advise it. The last time anyone had sued that company had been as long ago as 1969, and there had been no letters before action or other precursors of contentious litigation when Mr Foyle was advising it between 1986 and 1994. In his third witness statement the most that Mr Gilbey could say was that "it would be reasonable for BATCo to have anticipated that it might be made a defendant to litigation in the United States or elsewhere". This tentative assessment accords well with the contemporary view, expressed in a minute dated 26th February 1986, to the effect that litigation experts in the UK had been briefed concerning "possible" liability litigation against BATCo. Similarly, on 21st May 1986 there was a statement by a senior BATCo executive that he did not wish it to be seen that the company had only instituted a destruction policy when the possibility of their being involved in litigation became real." (United States of America v. Philip Morris [2004] EWCA Civ 330)

Court not persuaded to go behind statement of belief

"[40] That makes it unnecessary to decide if SDR did reasonably contemplate litigation at the dates when the reports were written. I received extensive and detailed arguments on both sides on this question, but I do not see that any useful purpose would be served by considering it at length. I will simply therefore say that despite the apparently bland nature of the French e-mail enquiry, I am not persuaded that I can properly go behind Mr Monteith's and Mr Waterson's statements that they did anticipate that a challenge from the French tax authorities, if not other EU tax authorities, was likely.
[41] Nor is it necessary to deal in any detail with a final point made by Mr Simpson, which is that if all that was contemplated was an investigation by the French tax authorities, that would not be enough. I see no reason to doubt the evidence that it was anticipated that such an investigation would in due course be likely to be followed by a claim, and that such a claim would be defended by SDR, and that that would lead to litigation." (Financial Reporting Council v. Frasers Group Plc [2020] EWHC 2607 (Ch), Nugee LJ)

Actual or contemplated litigation

Includes foreign litigation

 

"[13] It is clear from Re Duncan [1968] P 306 that the litigation in contemplation is not restricted only to domestic proceedings." (Refinitiv UK Holdings Limited v. HMRC [2023] UKFTT 222 (TC) Judge Brooks)

Includes foreign litigation

Made for the dominant purpose of conducting that litigation

 

Including deciding whether to make or resist a claim

"Such a proposition appears to me to be at variance with the decision of the House of Lords in Waugh's case, from which it is, I think, clear that, if litigation is reasonably in prospect, documents brought into being for the purpose of enabling the solicitors to advise whether a claim shall be made or resisted are protected by privilege, subject only to the caveat that that is the dominant purpose for their having been brought into being." (Re Highgrade Traders Ltd [1984] BCLC 151 at 172)

Fending off an assessment can form part of the litigation purpose

"[66] The difficult question in the circumstances I have described is to determine whether litigation was the sole or the dominant purpose of the activities that RBS set in train following the HMRC letter. Mr Wardell argued persuasively that litigation was the sole purpose of the investigation after the sea change represented by the HMRC letter. I can see the force of his submission but I am not sure that it much matters whether the litigation purpose was the sole or merely the dominant purpose. The Highgrade approach would suggest that a subsidiary purpose is subsumed into the dominant litigation purpose. That, as I have already indicated, seems to me rather likely to be the position here. Andrews J thought that attempts to settle prevented the litigation purpose being dominant on the facts of her case. I cannot accept, as I have said, however, that one can properly draw a general legal principle from her approach to those facts. Whilst I accept that the situation in Highgrade was a quite different one, it is clear from that case and from the other Court of Appeal authorities cited that one has to take a realistic, indeed commercial, view of the facts. Just as the insurers were not determining the cause of the fire as a matter of academic interest, RBS was not spending large sums on legal fees here in the hope that HMRC would be dissuaded from issuing an assessment. If that is properly to be regarded as a purpose of the investigation at all, it was obviously a very subsidiary purpose. In the cases to which Mr Wardell pointed, the other purpose in dual purpose cases went beyond the litigation context. Here, fending off the assessment was just part of the continuum that formed the road to the litigation that was considered, rightly, as it turned out, to be almost inevitable." (Bilta (UK) Ltd v. RBS Plc [2017] EWHC 3535 (Ch), Sir Geoffrey Vos)

"[105]  Similarly, in Bilta (UK) Limited (in liquidation) v. Royal Bank of Scotland [2017] EWHC 3535 (Ch) (“ Bilta ”), the Chancellor concluded that RBS was not spending large sums on legal fees for the primary purpose of dissuading HMRC from issuing an assessment against it, if that could even properly be regarded as a purpose distinct from the litigation purpose.

...

[107]  The facts of this case lie between Waugh on the one hand and Highgrade and Bilta on the other.  In the former there was an express finding of dual purpose.  In the latter two cases, it is difficult to see what the alternative purpose was.  In relation to Highgrade , the only real interest for the insurers was in ascertaining whether potential proceedings under the fire policy could successfully be defended; in the latter, HMRC had made it clear that they were pursuing the tax and the company had to determine the extent to which such proceedings could be defended." (Director of Serious Fraud Office v. Eurasian Natural Resources Corporation Ltd [2018] EWCA Civ 2006)

Query at what stage of the investigation

"[60] It seems to me that the HMRC letter did indeed amount to a watershed moment. Following an investigation into the facts, which had lasted more than two years, HMRC stated for the first time in the HMRC letter that it considered that it had sufficient grounds to deny RBS nearly £90 million by way of input VAT. The HMRC letter analysed the relevant law and applied the law to the facts as they understood them before asking for RBS's comments on those facts. It was, therefore, similar in nature as Mr Wardell has submitted to a letter before claim. Moreover, since HMRC had to prove no more under the Kittel test than that RBS knew or ought to have known that the relevant transactions were connected with fraud, it was highly likely at this point that an assessment would follow. That the assessment was highly likely is the evidence of Mr Collins and is also the business and revenue reality. It was hardly very likely that RBS would persuade HMRC to drop altogether a claim for many millions of pounds on the basis of a solicitor's report, however persuasive that report might turn out to be when HMRC had already determined expressly that it had evidence supporting the case that RBS "knew or ought to have known" of the VAT fraud." (Bilta (UK) Ltd v. RBS Plc [2017] EWHC 3535 (Ch), Sir Geoffrey Vos)

HMRC may form the view that their assessment of tax is likely to be challenged

"They did, however, submit that the commissioners ought not to have "anticipated litigation" within the meaning of the rules as to legal professional privilege as early as July 31, 1967. There was not, so far as I can see, any need for the appellants to have requested a reference to arbitration at that stage. It may well be that the request was made ex abundanti cautela and that the appellants were hoping that they might obtain a reduction in the tax payable by a process of negotiation. But whatever may have been in their minds it does not lie in their mouth to complain that the commissioners on receipt of the letter formed the view that any value which they fixed would almost certainly be challenged and there was nothing in the subsequent correspondence to cause them to think otherwise. So even if the existence of privilege in respect of the 2 (b) (i) documents depends on the reference to arbitration having been anticipated when they were written (which I doubt) I think that the Court of Appeal was right in holding that the claim was made out with regard to them as well as with regard to the 2 (a) documents." (Alfred Crompton Amusement Machines Ltd v. CEC (No.2) [1974] AC 405 at 431)

However documents necessary to establish the amount of tax may have dual purpose

"The commissioners' case for claiming legal professional privilege with regard to the documents comprised in heads 1 and 2 may be stated as follows: "The documents were obtained or came into existence for two purposes - first to assist the valuation department of the commissioners in fixing the wholesale value of the machines and secondly to assist the legal department in upholding that valuation in the arbitration which it was anticipated would be called for. If they had been obtained or had come into being for no purpose other than that of being laid before the legal advisers of the commissioners to help them in presenting the commissioners' case in anticipated litigation they would clearly have been entitled to legal professional privilege and the cases show that the fact that they were obtained or came into existence for another purpose as well even though such other purpose was in fact the primary purpose makes no difference."

...

Here the two purposes for which the documents in question were obtained or came into existence were parts of a single wider purpose - namely, the ascertainment of the wholesale value in the manner prescribed by the Act. The first, and the sole immediate, purpose was to help the commissioners to fix what in their opinion was the true value; the second purpose was to help the solicitor, if the commissioners' opinion was challenged, to prepare their case for the arbitration. It was not - and hardly could have been - suggested that the mere fact that the commissioners would know in every case that their opinion might be challenged would itself enable them to claim that such documents as are in question here would be the subject of legal professional privilege whenever in fact their opinion was challenged. What is said to make them privileged in this case is the fact that the commissioners happened to expect that there would be an arbitration and called in the solicitor to "hold their hands" in the early stages. But, even so, in this case just as much as in cases in which no arbitration was in fact anticipated the commissioners had to form their own opinion as to value on the evidence available to them, including these documents, before any arbitration could take place. This feature of the case appears to me to distinguish it from the Ogden or Seabrook type of case and to make it analogous to the case of Jones v. Great Central Railway Co. [1910] A.C. 4. There a member of a trade union who thought that he had been unjustly dismissed by his employers furnished the union authorities (as required by the rules) with information in writing as to the facts of the case as he saw them in order to satisfy them that it was proper for them to sanction the employment of a solicitor to conduct the case and also for use by the solicitor in the conduct of the action if the employment of a solicitor was sanctioned. This House held that the letters in question were not the subject of legal professional privilege because the union authorities had themselves to consider them and act on them before the solicitor was employed to conduct the case. So here the commissioners had to form their own opinion as to value before the solicitor would use the documents for the purpose of defending their opinion in the anticipated arbitration." (Alfred Crompton Amusement Machines Ltd v. CEC (No.2) [1974] AC 405 at 431 - 433)

Can include investigating whistleblower allegations

"[109] In our judgment, in this case, the answer can be achieved by unpacking the words ‘compliance’ and ‘governance’.  Although a reputable company will wish to ensure high ethical standards in the conduct of its business for its own sake, it is undeniable that the ‘stick’ used to enforce appropriate standards is the criminal law and, in some measure, the civil law also. Thus, where there is a clear threat of a criminal investigation, even at one remove from the specific risks posed by the SFO should it start an investigation, the reason for the investigation of whistle-blower allegations must be brought into the zone where the dominant purpose may be to prevent or deal with litigation." (Director of Serious Fraud Office v. Eurasian Natural Resources Corporation Ltd [2018] EWCA Civ 2006)

Includes investigating insurance claim

"The learned judge found a duality of purpose because, he said, the insurers wanted not only to obtain the advice of their solicitors, but also wanted to ascertain the cause of the fire. Now, for my part, I find these two quite inseparable. The insurers were not seeking the cause of the fire as a matter of academic interest in spontaneous combustion. Their purpose in instigating the enquiries can only be determined by asking why they needed to find out the cause of the fire. And the only reason that can be ascribed to them is that of ascertaining whether, as they suspected, it had been fraudulently started by the insured. It was entirely clear that, if the claim was persisted in and if it was resisted, litigation would inevitably follow. The claim had been made and there was no indication that it was not going to be pressed, particularly after Mr MR's acquittal. It is, as it seems to me, entirely unrealistic to attribute to the insurers an intention to make up their minds, independently of the advice which they received from their solicitors, that the claim should or should not be resisted. Whether they paid or not depended on the legal advice which they received, and the reports were prepared in order to enable that advice to be given. The advice given would necessarily determine their decision and would also necessarily determine whether the anticipated litigation would or would not take place.

...

The purpose was, and was only, to determine aye or no were they to litigate, and it was clearly in order to enable the solicitors to advise them on that matter that the relevant documents were obtained." (Re Highgrade Traders Ltd [1984] BCLC 151 at 173 - 174)

"[31] On the other hand, I do consider that the Judge was both entitled and right to reach the conclusion which he did. This was a huge claim. The consequence of the cost of repairs exceeding €73.5 million triggered the right to the payment of €145 million under the Policy. It would inevitably give rise to complexities in relation to subrogation and many other legal issues of one kind or another. When the defendants received the WNV Report, they had concerns, which were serious ones, about the reliability of the figures for the reasons set out in Mr Davis's witness statement. It was as likely as not that Noble Denton would disagree with the WNV figures and that their own would be less than them. If they were less, there would be a real prospect of litigation. In my judgment, it was entirely understandable that in those circumstances the defendants would instruct solicitors, very much with a view to such possible litigation." (Westminster International BV v. Dornoch Ltd [2009] EWCA Civ 1323, Etherton LJ)

Includes settling litigating at an early stage

"[102] That, as it seems to us, was the wrong starting point.  The fact that solicitors prepare a document with the ultimate intention of showing that document to the opposing party does not, in our judgment, automatically deprive the preparatory legal work that they have undertaken of litigation privilege.  We can imagine many circumstances where solicitors may spend much time fine-tuning a response to a claim in order to give their client the best chance of reaching an early settlement.  The discussions surrounding the drafting of such a letter would be as much covered by litigation privilege as any other work done in preparing to defend the claim.  We doubt, therefore, the correctness of the legal principles that the judge stated at paragraph 61 of her judgment, and the way that she applied them at paragraphs 168-171.   In both the civil and the criminal context, legal advice given so as to head off, avoid or even settle reasonably contemplated proceedings is as much protected by litigation privilege as advice given for the purpose of resisting or defending such contemplated proceedings." (Director of Serious Fraud Office v. Eurasian Natural Resources Corporation Ltd [2018] EWCA Civ 2006)

Does not include dual purpose of also deciding whether to exercise contractual right of rescission

"[22] This application concerns a claim to privilege, not in respect of Mr. Martin's report, but in respect of the correspondence passing between Sotheby's, for whom Freshfields were acting from 27 April 2016, and Mr. Martin. The position, assessed objectively, as it has to be, appears to me to be that that correspondence took place for two purposes. The first was that Sotheby's had a contractual decision to make as to whether the painting was counterfeit and whether the sale would be rescinded. The second was that Mr. Martin's report would doubtless be used by Sotheby's in the contemplated litigation with Mark Weiss Ltd. (and/or the Buyer). Indeed, the letter dated 5 May 2016 from Sotheby's to Mr. Martin stated in terms that "all correspondence between you and Sotheby's relating to this matter is in the context of that anticipated litigation, to enable Sotheby's to understand the strengths and weaknesses of its position and to make the right legal and commercial decisions in anticipation of that potential litigation." That neatly identifies the two purposes. The commercial decision is obviously the decision whether or not to declare the painting counterfeit and, if so, to rescind the contract with the Buyer.

[23] Both purposes were, it seems to me, of equal importance and relevance. At any rate Sotheby's is unable, in my judgment, to establish that the second purpose was the dominant of the two purposes.

...

[34] The decision in the present case must be based upon the evidence in this case. I have paid particular regard to (i) the terms of the contract between Sotheby's and the Buyer pursuant to which Sotheby's would, in certain circumstances, have to form a view that a painting which it had sold was a fake, (ii) the terms of the contract between Sotheby's and Mr. Martin pursuant to which Mr. Martin was to provide his opinion as to the authenticity of the painting but was not to provide "expert consultation as a consulting expert or testifying expert", (iii) the terms of the letter dated 5 May to Mr. Martin which identified two purposes for correspondence with Mr. Martin, one being the commercial decisions which Sotheby's had to take, (iv) the importance or gravity of any decision by Sotheby's that a painting it had sold was a fake, and (v) the fact that the Committee had before it the comments of Mr. Martin on the opposing expert's views which must have been elicited in correspondence with him. Those matters show, in my judgment, that Sotheby's are unable to establish that the dominant purpose of the correspondence with Mr. Martin was use in contemplated litigation. That was a purpose of the correspondence. But it was not the dominant purpose." (Sotheby's v. Mark Weiss Limited [2018] EWHC 3179 (Comm), Teare J)

Made for the dominant purpose of conducting that litigation

Advice on tax structure expected to be challenged not for the dominant purpose of defending that litigation

 

[36]...A taxpayer who takes advice as to how to structure his affairs does not do so for litigation purposes. He does so because he wants to achieve a particular result for tax purposes – in this case the result that the transport by Barlin would not be "by or on behalf of" SDR (or other Sports Direct company) for the purpose of Art 33, and hence that VAT would be payable on the sale of goods in the UK and not in France, Ireland, Finland or other Member States. Even if it is contemplated that the particular structure will be likely to be attacked by the relevant tax authorities and that there will be litigation, the advice as to how to implement the new structure – or, if this is preferred, how to revise or enhance an existing structure – is not primarily advice as to the conduct of the future possible litigation. It is primarily advice as to how to pay less tax – or, as the case may be, how to avoid the administrative inconvenience of having to register in every Member State.

...

[38]...The first report was written for the purpose of recommending that SDR adopt the 2015 Structure. That, for the reasons I have sought to give, does not seem to me to be for litigation purposes. The second and third reports were written after the 2015 Structure had been adopted in February 2015, and so the purpose for which they were written was not precisely the same: it was not to recommend the adoption of the 2015 Structure. The evidence is that they were written for the purpose of explaining how VAT was to be accounted for under this structure. That does not seem to me to be a litigation purpose either: it is not suggested that the second and third reports were written to assist SDR's position in future litigation, but to enable SDR to ensure that they were operating the structure as Deloitte advised they should." (Financial Reporting Council v. Frasers Group Plc [2020] EWHC 2607 (Ch), Nugee LJ)

"[33] Having carefully considered each of the Disputed Documents I have come to the conclusion that, given the comment of Nugee LJ in Frasers Group (see paragraph 14, above), which as decision of the High Court is binding on the First-tier Tribunal although not the Upper Tribunal, that litigation privilege cannot apply to the Disputed Documents which are primarily concerned with the implementation of an alternative corporate structure." (Refinitiv UK Holdings Limited v. HMRC [2023] UKFTT 222 (TC) Judge Brooks)

Advice on tax structure expected to be challenged not for the dominant purpose of defending that litigation

Communications or materials for the brief

 

"[1]...It is clear on the authorities that documents emanating from or prepared by third parties or employees of a party are covered by the principle of "litigation privilege" if prepared with the dominant purpose of use in existing or contemplated litigation." (Three Rivers DC No.5 v. Bank of England [2003] EWCA Civ 474)

Identities of witnesses

"[45] In the normal course of proceedings a solicitor will interview and obtain proofs of evidence from all manner of potential witnesses for use in actual or prospective litigation. Both the information given and the identity of the person supplying it are confidential and privileged unless and until the privilege is waived by that person giving evidence in the proceedings or some other equivalent action. This was and is recognised in the common form claim to privilege contained in the former affidavit of documents as well as in the present disclosure statement in neither of which was or is the name of the witness who has given the proof revealed." (China National Petroleum Corporation v. Fenwick Elliott Techint International Construction Company [2002] EWHC 60 (Ch))

Communications or materials for the brief

Communications with expert prima facie privileged

 

"[97]...The relationship between a party, its representatives and an expert are generally subject to litigation privilege.  CPR 35.10(3) excludes from privilege the instructions given to an expert to prepare a report which is subsequently to be relied upon in court with the permission of the court.  However, that exclusion is limited (as set out above) to a requirement that material instructions be set out in the report itself and if there are reasonable grounds to conclude that the report is incomplete or inaccurate as to those material instructions then, and only then, will the underlying communications be admissible and/or the subject of scrutiny by cross examination of the expert." (Wired Orthodontics Limited v. HMRC [2020] UKFTT 290 (TC), Judge Amanda Brown)

Including draft reports

"[98] The point at which the communications between a party and its appointed expert becomes one that falls within the scope of CPR 35.10(3) and therefore outside the scope of litigation privilege was also considered in Talithia Mack v Doctor Elaine Clarke [2017] EWHC 113 (QB).  The case concerned the question of disclosure of earlier reports/drafts of experts.  The court considered:

“16. … Parties and their experts have to have a period during which the views of the experts are established, probed, discussed, questioned, modified, concluded without fear that that process will be opened up to scrutiny of the opposing party.  It would be counter-productive and retrogressive … if the development of expert opinions were inhibited in that way without very good reason.  I do not think that the timely withdrawal of an admission (if such it be) amounts to such a reason.  Further, (and at the risk of making essentially the same point in a different way), a practice of requiring disclosure of early drafts of experts’ reports in this situation would not promote the aim of encouraging proper concessions.  On the contrary, parties would be wary of making concessions at all, or of making them before their experts had produced final and definitive reports.  …” (Wired Orthodontics Limited v. HMRC [2020] UKFTT 290 (TC), Judge Amanda Brown)

Including communications whilst agreeing joint report

"[103] The Tribunal therefore rejects the submission that all communications between the instructing solicitor and an expert whilst the experts are agreeing the joint statement are open. 

[104] The fact is that the relevant rules and practices are silent on the status of communications between solicitor/client and the expert during the preparation and discussion of a joint statement because of the simple fact that such communications are not generally permitted."  (Wired Orthodontics Limited v. HMRC [2020] UKFTT 290 (TC), Judge Amanda Brown)

Communications with expert prima facie privileged

Disclosure of instructions where summary appears inaccurate or incomplete

 

No disclosure unless summary in report appears inadequate

"[95] CPR 35.10 (3) and (4) together provide that an expert must include within their report a summary of their material instructions but that to the extent that they have done so there is no requirement that such documents be provided by way of disclosure in the proceedings.  Only where there are reasonable grounds for considering that the statement of instructions is inaccurate or incomplete will disclosure be ordered of the documents in which the instructions are given."(Wired Orthodontics Limited v. HMRC [2020] UKFTT 290 (TC), Judge Amanda Brown)

Some concrete fact giving rise to reasonable grounds

"[43] There is a plain impact on the scope of legal professional privilege, and thus a degree of protection against the loss of privilege is given by the restrictions on disclosure provided for by 35.10(4). I think it a premise of the arrangements constituted by 35.10(3) and (4) that in the ordinary way the expert is to be trusted to comply with 35.10(3): the effect of the 35.10(4) restrictions is that the party on the other side may not as a matter of course call for disclosure of documents constituting the expert's instructions as a check to see that 35.10(3) has been fulfilled. There must be some concrete fact giving rise to "reasonable grounds" within the closing words of 35.10(4). It is unsurprising that the expert is thus to be trusted; it is of a piece with his overriding duty to help the court (CPR 35.3). Overall, 35.10(4) in my view strikes an important balance between on the one hand the protection of the party whose privilege is lost, and on the other the vindication of 35.10(3) where there is a real question-mark as to its fulfilment." (Lucas v Barking, Havering & Redbridge NHS Trust [2003] EWCA Civ 1102, Laws LJ)

No disclosure where party aware of substance but considers it was improper

"[109] This critical issue here is not that the Appellants were in fact unaware of the substance of material instructions but rather that they question the integrity of the articulation of substance because of the very significant potential impact of the drafting changes on the substantive issues." (Wired Orthodontics Limited v. HMRC [2020] UKFTT 290 (TC), Judge Amanda Brown)

Disclosure of instructions where summary appears inaccurate or incomplete

Exception: documents to be used against lawyer but not client

 

"[32] This is not to say that on its facts the Parry-Jones case was wrongly decided. But I think that the true justification for the decision was not that Mr Parry-Jones's clients had no LPP, or that their LPP had been overridden by the Law Society's rules, but that the clients' LPP was not being infringed. The Law Society were not entitled to use information disclosed by the solicitor for any purpose other than the investigation. Otherwise the confidentiality of the clients had to be maintained. In my opinion, this limited disclosure did not breach the clients' LPP or, to the extent that it technically did, was authorised by the Law Society's statutory powers. It does not seem to me to fall within the same principle as a case in which disclosure is sought for a use which involves the information being made public or used against the person entitled to the privilege.

...

[36] ... In my opinion, Mr Taylor would have been entitled to refuse to produce documents in respect of which he personally was entitled to LPP, such as legal advice from counsel about his own tax affairs. But, as in Parry-Jones v Law Society [1969] 1 Ch 1, I do not suggest that the actual decision was wrong. In the Divisional Court the Inland Revenue accepted that, as the information was sought under section 20(2) for the purpose of determining Mr Taylor's own liability to tax, it could be used only for that purpose. It could not, if subject to LPP, be used in connection with the tax liabilities of his clients. Glidewell LJ (at p 588) accepted this concession as correct and although he suggested that the revenue might make other use of a discovery that a particular document existed, I am not sure that this is right. It is not necessary to decide the point, but I do not think that the Inland Revenue were entitled to use any information supplied by Mr Taylor for another purpose. In consequence, I do not think that the disclosure of the documents by Mr Taylor in confidence for the limited purpose of determining his own tax liability infringed any LPP vested in his clients. If I am wrong about this and technically it did, then I think that to that extent the statute can be construed as having authorised it." (R (Morgan Grenfell & Co Ltd v. Special Commissioner of Income Tax [2002] UKHL 21)

However Court of Appeal has rejected this exception

"[44] The result of the preceding lengthy digression into the interstices of Parry-Jones, Morgan Grenfell and subsequent case law is that there is nothing in them that suggests that paragraph 1(8) of Schedule 2 to SATCAR means something different from exactly what it says. The recipient of a notice given by the FRC under paragraph 1(1) or 1(3) is not required to hand over privileged documents, whether the person entitled to the privilege is the auditor under investigation or the auditor's clients. Lord Hoffmann's comments in para. 32 do not provide a basis for saying that paragraph 1(8) is qualified by the no infringement exception. As Mr Lissack says, that would greatly reduce the protection conferred by it. Moreover, if Parliament had intended to preserve some general exception applicable where documents are sought pursuant to regulatory powers, paragraph 1(8) would not have been drafted in the way it is. The scope of LPP protection conferred is expressly aligned with the scope arising "in proceedings in the High Court on the grounds of legal professional privilege". The context in which Lord Hoffmann was discussing the potential no infringement exception was specifically outside the context of court proceedings." (Sports Direct International Plc v. FRC [2020] EWCA Civ 177, Rose LJ)

Exception: documents to be used against lawyer but not client

Exception: iniquity/fraud

 

"[61]...This principle may be shortly stated: advice sought or given for the purpose of effecting iniquity is not privileged (see Barclays Bank v Eustice [1995] 1 WLR 1238 at 1249 per Schiemann LJ). The principle is founded upon public policy: "we are here engaged … in deciding whether public policy requires that the documents in question are left uninspected" (ibid at p. 1250H). The rationale was said by Parker LJ in Banque Kayser v Skandia [1986] 1 Ll. Rep 336 at 338 to be:
"….first, that a fraudulent party who communicates with his solicitor for the purposes of the furtherance of fraud or crime is both communicating with his solicitor otherwise than in the ordinary course of professional communications, and secondly that in any event it would be monstrous for the Court to afford protection from production in respect of communications which are made for the purpose of fraud or crime"
The difference in language flags up the first of the points argued.

[62] Mister Moger QC argued that the principle was not engaged at all because whatever wrongdoing occurred it lacked sufficient seriousness to constitute "iniquity". Although the case law refers to crime or fraud or dishonesty (such as fraudulent breach of trust, fraudulent conspiracy, trickery or sham contrivances) it is plain that the term "fraud" is used in a relatively wide sense: Eustice (op.cit) at 1249D. So a scheme to effect transactions at an under value was sufficient (Eustice); as was deliberate misrepresentation for the purpose of securing a mortgage advance ... Nationwide Building Society v Various Solicitors [1999] PNLR 52 at 72; or making a disposition with the intention of defeating a spouse's claim for financial relief (C v C [2008] 1 FLR 115); or the establishment by employees, in breach of a duty of fidelity to their employer, of a rival business ( Gamlen v Rochem [1983] RPC 1 and Walsh Automation v Bridgeman [2002] EWHC 1344 (QB)). The enumeration of examples is useful only insofar as it enables some underlying theme or connectedness to be identified. In each of these cases the wrongdoer has gone beyond conduct which merely amounts to a civil wrong; he has indulged in sharp practice, something of an underhand nature where the circumstances required good faith, something which commercial men would say was a fraud or which the law treats as entirely contrary to public policy. (I borrow language from Gamlen (supra) and from Williams v Quebrada Railway [1895] 2 Ch 751)." (BBGP Managing General Partner Limited v. Babcock & Brown Global Partners [2010] EWHC 2176 (Ch), Norris J)

 

Strong prima facie case required

"[68] ... It is common ground that for the principle to apply the evidence must disclose a strong prima facie case of iniquity." (BBGP Managing General Partner Limited v. Babcock & Brown Global Partners [2010] EWHC 2176 (Ch), Norris J)

Generally to be established without looking at the material

"[72] ... As a rule the court should not look at the closed material. There must be some exceptional factor of real weight ( the nature of which has yet to be ascertained) before the court can examine the closed material to see if the test for disclosing the closed material is itself satisfied. The mere fact that the test is not satisfied on the open material is not such an exceptional factor of real weight. No exceptional factor was identified in argument. I therefore confine my attention to the open material."  (BBGP Managing General Partner Limited v. Babcock & Brown Global Partners [2010] EWHC 2176 (Ch), Norris J)

Examples

 

Breach of fiduciary duty under cloak of secrecy

"[63] The wrongdoer here is Mr Hanson (and also to some extent the other members of the FMT). What is said is that they acted in breach of their duty of fidelity to General (a rising from Mr Hanson's being a director and all of the FMT being agents). The breaches were:-
(a) that they failed to disclose to the board of General a plan to remove General "for cause" (and so to deprive it of compensation on termination of its role as managing partner) and they themselves assisted in the formulation and implementation of that plan;
(b) that they failed to disclose to the board of General a plan to put entirely beyond the control of General a cash fund over which general had rights as partner (and themselves assisted in the formulation and implementation of the plan);
(c) that they helped to plan and prepare a case about the Internal Claims against General without disclosing to the Board that they were doing so;
(d) that they failed to disclose to the board of General a proposal that they should as consultants take over the role of General once it was removed as managing partner on terms which rewarded them the more highly the more badly General came out of any resolution of the claims against it.
(e) That they generally preferred the interests of the limited partners over the interests of General and did so under a cloak of secrecy.
[64] In my judgment conduct of that character is sufficient to engage the iniquity principle. (BBGP Managing General Partner Limited v. Babcock & Brown Global Partners [2010] EWHC 2176 (Ch), Norris J)

Exception: iniquity/fraud
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