Global Investigations Review - The law and practice of international investigations

Privilege

Last verified on Thursday 5th October 2017

United Kingdom

Oliver Powell and Saaman Pourghadiri
Outer Temple Chambers
Andrew Thornton-Dibb and David Kirk
McGuireWoods London LLP

    Scope of the privilege

  1. 1.Are communications between an attorney and client protected? Under what circumstances?
  2. Yes. There are two principal forms of legal professional privilege (LPP) that exist in England and Wales, namely legal advice privilege and litigation privilege.

    Legal advice privilege

    Legal advice privilege protects confidential communications between a lawyer and client, provided the communications are for the purpose of seeking or receiving legal advice. This form of privilege applies regardless of whether litigation has commenced or is in prospect. The essential ingredients of legal advice privilege are:

    Confidentiality

    The communication must be confidential. If a confidential communication between lawyer and client becomes public and is no longer confidential it cannot be privileged. The reader is referred to question 5.

    Communication

    There must be some transfer of information between lawyer and client for the purpose of giving or receiving legal advice. In the context of seeking legal advice, organisations should be cautious of internal communications that do not include a lawyer, as they may very well fail to be protected by legal advice privilege. 

    Lawyer

    The communication must be with a lawyer. Evidently, all members of the legal profession in England and Wales are considered to be lawyers for the purpose of legal advice privilege. This includes solicitors, barristers and in-house lawyers qualified as solicitors or barristers. Legal advice privilege also extends to communications with foreign lawyers who are properly accredited in their respective jurisdiction.

    Client

    The communication must be with the lawyer’s client. The concept of "the client" stems from times where an individual would seek advice from their lawyer. It is notable that there have been some teething problems in extending privilege from the simple concept of an individual client to corporate persons, particularly in larger organisations. The question of who is the client in an organisation is not always a straightforward one. In attempting to answer this question the courts have focussed on the narrow group of individuals employed by a company who are expressly charged with seeking and receiving legal advice for and on behalf of the company. (Three Rivers District Council and others v The Governor and Company of the Bank of England (Three Rivers 5) [2003] QB 1556 (CA)).

    The application of this principle means that not every manager or employee of a company will necessarily form part of the client for the purpose of attracting legal advice privilege. Further, communication of legal advice with someone outside of the instructing group is likely to result in loss of privilege in the advice. The High Court has recently ruled on the issue of who may be considered the client in Re RBS (Rights Issue Litigation) [2016] EWHC 3161 and again in SFO v Eurasian Natural Resources Corporation Ltd [2017] EWHC 2017 (QB) (‘ENRC’). In both decisions, the High Court endorsed the narrow approach to interpreting “the client” holding that current and former employees, who were interviewed as part of an investigation by company counsel for the purpose of advising the company, were not part of “the client”. Accordingly, claims of advice privilege over their interview notes were not upheld.

    In the context of internal investigations, where it is not uncommon for a large number of non-lawyers to be involved in conjunction with a legal team, particularly where litigation or regulatory action is not or cannot be reasonably contemplated or where that litigation is not the dominant purpose of the investigation (see below on litigation privilege), careful consideration should be given as to how the investigation team is comprised (ie, who is the instructing body for the purposes of the internal investigation?) and on what premise privilege is being asserted. It would be prudent to: define the team at an early stage; be clear on what premise privilege is being asserted; and contemporaneously document this throughout the investigation.

    For the purposes of legal advice

    Legal advice privilege does not attach to commercial or strategic advice given by external or in-house counsel. The advice must be legal, which includes advice as to what should prudently and sensibly be done in a relevant legal context. It is not uncommon for an email from an in-house lawyer to a company to contain a mixture of legal advice and commercial advice. In such circumstances only the part of the communication giving legal advice is privileged. In the context of a disclosure exercise, the document may fall to be disclosed, albeit in a redacted form. 

    Litigation privilege

    Litigation privilege protects confidential communications between either a lawyer and third parties, or a client and third parties. It stems from the principle that a litigant should be able to obtain evidence upon pending or contemplated litigation free from fear that the results of any communication will be disclosable. 

    Litigation privilege applies only where adversarial proceedings involving a client have begun or are in reasonable contemplation, and only covers communications that are created for the dominant purpose of assisting, or obtaining advice in relation to, actual or contemplated litigation.

    The requirement that litigation must exist or be in reasonable contemplation means that in the context of actual or contemplated criminal or regulatory investigations, one must carefully consider whether litigation privilege arises, or whether it is only legal advice privilege that will apply.

    The ENRC decision has resulted in some notable, albeit potentially concerning, principles in relation to when litigation privilege in the context of a company’s internal investigation might not survive legal challenge.  While the High Court’s decision in ENRC raises a host of disconcerting points, the key one is that the test for whether “litigation is in reasonable contemplation” will not be met simply because a criminal investigation is in reasonable contemplation. The High Court appears to consider that only contemplation of a prosecution, and not contemplation of a criminal investigation, amounts to "litigation" for the purpose of litigation privilege. Moreover, the High Court found that before a criminal prosecution could be in “reasonable contemplation the person asserting privilege must know of “substance”, “some truth” or “at the very least some material”, to support the allegation in question. This decision met quickly with criticism and concern, and as at the time of writing we understand is the subject of a pending appeal. However, as things stand the decision forms essential guidance for any company in the throes of, or considering carrying out, an internal investigation.

    Given the differences between the two forms of privilege, knowing whether one or both apply, is critical in mapping out how an internal investigation can be conducted without the risk of losing privilege.    

    Other types of privilege that are worthy of note include:

    Without prejudice privilege – Essentially an evidential rule, the concept of without prejudice privilege applies to any communications between disputing parties that are a good faith attempt to settle the dispute and excludes these communications from later being used as evidence by either of the parties. The High Court has recently acknowledged that a form of “without prejudice privilege” covers communications between an institution and a regulator, in this case, the Financial Conduct Authority, whilst negotiating a regulatory penalty. (Property Alliance Group Limited v The Royal Bank of Scotland Plc [2015] EWHC 1557 (Ch) Bliss J.)

    Common interest privilege – Privileged documents can be shared with a third party, while also maintaining their privileged status if the third party shares a common interest in the subject matter of the document or litigation (see question 18).

    Privilege against self-incrimination – Privilege against self-incrimination exempts a person from being compelled to produce documents or provide information that might incriminate them in any potential or current criminal proceedings in the United Kingdom. It may be arguable that a trial judge in civil proceedings has a discretion to permit a witness to refuse to answer a question that may expose them to foreign prosecution. 

  3. 2.Does the privilege only protect legal advice? Does it also protect non-legal communications between an attorney and client, such as business advice?
  4. As mentioned above, it is a requirement of legal advice privilege that it must be in the context of legal advice. Commercial or strategic advice given by a lawyer is unlikely to be privileged.

    With litigation privilege, the communication risks not being privileged in circumstances where it has not been created for the dominant purpose of assisting, or obtaining advice in relation to, adversarial proceedings.

    To this end, in ENRC the High Court concluded that the primary purpose of ENRC’s investigation was to investigate the truth of behind whistleblowers claims, and held that this purpose fell short of the required “dominant purpose for litigation” test. The Court also rejected the argument that litigation privilege should extend to documents created to obtain legal advice as to how best to avoid (rather than only defend) contemplated litigation.   

    Particularly in the context of internal investigations, companies need to be mindful of the way in which they: setup the investigation team; how they deal with internal communications and communications with lawyers; and how they evidence the type of privilege being claimed and the premise on which it is claimed.

    In Property Alliance Group Limited v The Royal Bank of Scotland Plc [2015] EWHC 1557 (Ch) [2016] EWHC 3161, RBS sought to claim legal advice privilege in relation to material created through the work of an “Executive Steering Group” (which included and was overseen by the bank’s external lawyers) that oversaw an internal investigation into allegations of LIBOR manipulation and related regulatory enquiries. Specifically, RBS claimed privilege over two classes of documents, firstly tables that updated the group on the progress of the investigation, and secondly notes and summaries reflecting the lawyer’s views on the investigations. This was challenged by the claimant on the premise that legal advice privilege did not apply to these documents in that context. Further, that the context was strategic or commercial advice as opposed to legal.

    The Court accepted RBS’ argument that the documents represented a continuum of communication in order that legal advice could be properly sought and given. The Court held that the first class of documents were created to provide up to date summaries of legal advice requested and required, while the second class was created to enable the lawyers to make suggestions about what the client needed to do next. 

    Finally, and importantly, the court accepted that there was a clear public interest in communications between a lawyer and a client being privileged in the context of this type of regulatory investigation and that there was a need for lawyers in these circumstances to be able to give candid factual briefings and legal advice free from fear of disclosure. 

    Conversely, and as already discussed, the decisions in RBS Rights Litigation and ENRC illustrate the courts’ current approach to a company’s claims of legal advice privilege and litigation privilege in relation to interview notes and advice given during the course of an investigation.

    These cases illustrate the care that needs to be taken when conducting internal investigations so to ensure that privilege is properly established and that it is maintained. 

  5. 3.Is a distinction made between legal advice related to litigation and other legal advice?
  6. Legal advice privilege only applies to communications between a lawyer and the client who has instructed the lawyer to provide advice. It does not generally apply to communications with third parties. The position is different in relation to litigation privilege, where in addition to direct communications between lawyer and client, communications with third parties are privileged. The dominant purpose of the communication must be for use in, or advice in relation to, litigation. The litigation must be reasonably in prospect, and it must be adversarial. The communication must have been made under conditions of confidentiality. In addition, the purpose must have been to enable legal advice to be sought or given, in connection with the litigation.

    The rationale for this extension of privilege to third parties is based on the long-standing legal right to have the ‘freest possible communication’ between lawyer and client, thus ensuring that they can communicate confidently and without inhibition with a third party who might be able to assist the client’s case.

    Third parties will typically include experts and witnesses, and in particular the communications with them during the preparation for the case. The position was neatly summarised by Cotton LJ in Wheeler v Le Marchant (1881) 17 Ch D 675:

    the solicitor in 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.

    In Three Rivers (No 6), Lord Scott reasserted the importance of the principle extending to third parties on the basis that 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.”

  7. 4.

    What kinds of documents are protected by the privilege? Does it cover documents that were prepared in anticipation of an attorney-client communication? Does it cover documents prepared during an attorney-led internal investigation?

  8. Documents that may be subject to privilege have been widely defined. They include all communications, by whatever means, between client and lawyer and third parties, as stated above. 

    However, it is, of course, the content and the purpose of the document that determines whether it is privileged or not. For example, how should any records of communications preceding the advice or litigation be treated? If the documents are created in contemplation of seeking advice or embarking on litigation, and with the instruction of lawyers in mind, even though formal instruction may not have taken place at the time of creation, communications between the client and lawyers will be privileged. 

    It is also important to identify who the client is in circumstances where advice privilege is claimed. In Three Rivers (No 5) the Bank of England sought to claim privilege over records created some 10 years prior. The records were internal communications within the Bank relating to submissions made to the Bingham enquiry into the collapse of BCCI in 1991. An internal committee was set up to oversee all submissions made to the Bingham Committee and all evidence provided to it. In carrying out this work the bank’s lawyers had gathered information from numerous employees of the bank. Ten years later BCCI’s liquidators brought proceedings against the bank and requested disclosure of these internal records. The bank claimed that they were privileged for the purposes of that litigation but the Court of Appeal rejected their assertion. 

    It was established that the documents over which privilege was claimed comprised of notes made by bank officials on the orders of the internal committee, some of which were seen by lawyers, some were commissioned by lawyers, and some were communicated by the internal committee to the lawyers.  However, other similar records were not seen by the lawyers. The Court of Appeal held that legal advice privilege could only be claimed in respect of documents that: (i) actually passed between lawyer and client; or (ii) evidence the content of such communications. In short, the judgment seems to suggest that information from non-designated employees of the client, who are not authorised or appointed to instruct lawyers or receive legal advice will not be deemed to be privileged. This reading of the judgment is to the effect that advice privilege is not available for internal or inter-employee communications, even if made in preparation for instructing the legal team, or which lead to drafting documents requested by them. Despite attracting sustained criticism in academic circles, the principles of general application remain binding law in England and Wales and have been recently applied in two first instance authorities: Astex Therapeutics v AstraZeneca [2016] EWHC 2759; and the RBS Rights Issue Litigation [2016] EWHC 3161 (Ch). The matter was further also considered in SFO v ENRC [2017] EWHC 1017 (QB), with Andrews J agreeing with paragraph 64 of the RBS judgment: “the fact that an employee may be authorised to communicate with the corporation’s lawyer does not constitute that employee the client or a recognised emanation of the client.”  

    Following, SFO v ENRC [2017] EWHC 1017 (QB), as discussed above, the position in English law is that where there is an extant criminal investigation, documents generated by a company during an internal investigation into its activities (eg, notes of what lawyers are told by witnesses) are not subject to legal professional privilege unless: (a) the document records a communication with a person who falls within the narrow definition of client (set out above); (b) a claim to lawyer’s working papers can be made out; or (c) litigation was in reasonable contemplation and the interview note was prepared for the dominant purpose of assisting with the conduct of that litigation.

    Following ENRC and the RBS Rights Issue Litigation a claim for privilege over lawyers’ working papers will only succeed if the documents would betray the trend of legal advice. It is not enough to say that the note was taken by a lawyer and therefore must reflect that lawyer’s thinking. This said, documents containing factual evidence presented to a committee or board of a body corporate suspected of committing a criminal offence would attract legal advice privilege so long as the document can be said to form part of a continuum of communication between lawyer and client which included legal advice (as opposed to merely a summary or recitation of factual findings).

    In respect of litigation, the court in ENRC held that a criminal investigation by the SFO was not criminal litigation, and as such reasonable contemplation of a criminal investigation did not automatically amount to reasonable contemplation of a prosecution. The court held that before a corporate could be said to reasonably contemplate criminal prosecution it would need to show that it knew of some “truth” or “some substance” to the allegations being investigated.

  9. 5.To what extent must the communication be confidential? Who can be privy to the communication without breaking privilege?
  10. Confidentiality is a prerequisite for privilege. While it will not on its own be determinative of whether privilege can be claimed, if the communication is not confidential then there is no question of legal professional privilege arising or being maintained.

    In so far as legal advice privilege is concerned, communications between a lawyer and a client are privileged if they are both confidential and for the purpose of seeking legal advice from a solicitor or providing it to a client. In contrast, litigation privilege only protects confidential communications once litigation is reasonably in prospect, between either: a lawyer and a client; a lawyer and an agent (whether or not that agent is a lawyer), a lawyer and a third party and the client and a third party.

    On the premise that confidentiality is a fundamental component of privilege, a loss of confidentiality will lead to a loss of privilege. Accordingly, it is important that those dealing with privileged documents do not circulate them too widely. Those who routinely deal with privileged material would be well advised to ensure that privileged documents are marked as ‘confidential and privileged’ and impress upon any recipients that the material is not for general circulation, thus reiterating the importance of treating the material as confidential. Particular care should be given by clients or lawyers who provide material to a media outlet or public relations company. While a document might be prepared for use in litigation (eg, proof of evidence), a failure to keep it confidential (eg, widely providing a copy of the proof of evidence to encourage witnesses to come forward) will result in the loss of litigation privilege.

    The presence of an interpreter during a legal conference will not break the confidentiality of discussions between the client and the lawyer. The interpreter has professional obligations to the client and the lawyers, namely a duty to truthfully interpret the instructions so to give effect to the meeting. The role of the interpreter will not destroy the existing privilege. 

  11. 6.Is the underlying information privileged if it can be obtained from a non-privileged source?
  12. Information that was not made in privileged circumstances does not automatically become privileged simply because it is passed to a lawyer for advice or in relation to extant/contemplated litigation.

    The Palermo (1883) 9 PD 6 (CA) established that copies of pre-existing documents, namely depositions, obtained by lawyers from a third party for the purposes of litigation were privileged, even though the originals were not privileged. While the Palermo remains “good law”, it has been the subject of judicial and academic criticism. 

  13. 7.Are there any notable exceptions or caveats to the privilege?
  14. Broadly, there are five areas where communications that would otherwise appear to satisfy the relevant requirements for legal advice privilege or litigation privilege are not protected by the privilege:

    • The iniquity exception – there is no privilege in documents or communications that are themselves part of a crime, fraud or iniquity, or that seek to give legal advice about how to facilitate the commission of a crime, fraud or iniquity (R v Cox & Railton (1884) 14 QBD 153 and Barclays Bank Plc & others v Eustice & others [1995] EWCA Civ 29).
    • Better right of another party – if a document which would otherwise be privileged is available to the opposing party in the litigation, or if the party has the right to obtain the document, then the fact that the document is privileged will be irrelevant (O’Rourke v Darbishire [1920] AC 581);
    • Where secondary evidence may be given – in circumstances where the contents of document(s) have been made known to a third party who wishes to prove the document(s) in proceedings against the client, legal professional privilege may not apply, though this may simply be a species of the rule that once confidentiality is lost in a document so is privilege.
    • Particular relationships – privilege cannot be claimed against another party who has a joint interest in the subject matter of a communication at the time that it comes into existence.
    • Statutory exceptions – there are some instances where a statute will exclude/override the protection that would otherwise be afforded by legal professional privilege (eg, section 291(1)(b) IA 1986 and RIPA 2000). NB the court will only exclude LPP where the language of the statute is clear. It will not do so by implication. 

    For many years it had been thought that where information that would otherwise be protected by legal professional privilege constituted a material fact in the proceedings it will would not be privileged but this was rejected by Ramsay J in Farm Assist Limited (in Liquidation) v Secretary of State for Environment, Food & Rural Affairs [2008] EWHC 3079 (TCC).

    In addition to the above, it should be noted that communications between in-house lawyers do not generally attract legal professional privilege in the context of European Commission competition investigations (Akzo Nobel Chemicals Ltd & Akcros Chemicals Ltd v European Commission) (Case C-550/07 P).

    Finally, while the provision of privileged documents to regulators under an expressly agreed limited waiver of privilege does not waive privilege as against third parties, parties engaged in regulatory actions should be careful how they conduct any parallel civil proceedings. The manner in which a party conducts its civil case could see them waiving and losing privilege (Property Alliance Group Limited v The Royal Bank of Scotland Plc [2015] EWHC 1557 (Ch)).

  15. 8.Are there laws unrelated to privilege that may protect certain communications between attorney and client?
  16. There are circumstances where a common-law duty of confidentiality will apply as between a lawyer and their client. As a rule of thumb, if information is given in circumstances where it is expected that a duty of confidence applies, that information cannot ordinarily be disclosed without the consent of the provider. In addition to "judge-made" law, some statutory provisions expressly confirm that privilege will apply (eg, section 114(4) Medicines Act 1968 and para 11 of Sch 7 Data Protection Act 1998). However, the powers of regulators and prosecutors to compel the production of documents extends to confidential (though not privileged) documents. Similarly confidentiality will not in itself necessarily protect a document from disclosure in civil proceedings.

    Protected parties

  17. 9.To what extent does the privilege extend to in-house counsel? 
  18. If the in-house counsel is a qualified lawyer and the communication is with that individual acting in their capacity as a lawyer, then in most circumstances in-house counsel will be treated in the same fashion as external counsel for the purposes of privilege (Alfred Crompton v Customs & Excise (No. 2) [1972] 2 QB 102).

    As above, communication between in-house lawyers are not deemed to be privileged in the context of European Commission competition investigations (Akzo Nobel Chemicals Ltd). This is particularly significant given the European Commission’s enforcement powers.  

  19. 10.Does the privilege protect communications between an attorney and a corporate client’s employees? Under what circumstances?
  20. Legal advice privilege only applies to communications between the client and lawyer. As explained above, not all employees of a corporate client are necessarily considered as ‘the client’ for these purposes.

    If communications are for the dominant purpose of reasonably anticipated litigation, then they would be protected by privilege even if the employees are third parties for the purposes of legal advice privilege.

  21. 11.

    Does the privilege protect communications between non-lawyer employees of a corporate client if they are acting at the direction of counsel or gathering information to provide to counsel?

  22. Litigation privilege can cover such communications so long as the communication is for the dominant purpose of obtaining advice in relation to or assisting in actual or contemplated litigation. 

    Legal advice privilege only applies to communications between a lawyer and the client (or agents of the same (eg, secretaries). Accordingly, if the pre-conditions for litigation privilege are not engaged such information gathering would not be privileged.

  23. 12.Must the attorney be qualified to practise in your country to invoke the privilege?
  24. No, lawyers admitted as such in foreign countries are treated the same as English qualified lawyers for the purposes of privilege. If a jurisdiction has no formal rules concerning the admission or regulation of lawyers then there may be a question of fact, as to whether the individual in question can be treated as a lawyer at all for the purposes of privilege.

    When the issue of privilege falls to be determined by a Court in England and Wales, the English law of privilege applies. This is irrespective of the jurisdiction within which the advice was given and/or received (The RBS Rights Issue Litigation [2016] EWHC 3161 (Ch)).

  25. 13.

    Does the privilege extend to non-lawyer third parties? In which circumstances does the privilege protect communications with third parties if they are providing advice related to a legal matter?

  26. Communications between a client and other non-lawyer third parties may be confidential. However, they do no benefit from the same absolute protection from disclosure as legal advice privilege. Legal advice privilege only applies to communications with legal professionals (R (Prudential Plc) v Special Commissioner of Income Tax) [2013] 2 AC 185). In particular, legal advice privilege does not attach to communications with accountants, auditors or bankers – even when they are giving legal advice.

    There are certain statutory extensions affording the protection of legal advice privilege to specific categories of professional (eg, patent agents and trade mark agents).

    Of course, such communications can be covered by litigation privilege if they are made for the dominant purpose of advice and assistance in relation to litigation that is in reasonable contemplation.

  27. 14.Does the privilege apply to communications with potential clients?
  28. If the communication is for the purpose of seeking and receiving legal advice, then it will, prima facie be privileged. However, solicitors are discouraged from providing advice unless formal retainers are in place. 

    Ownership of the privilege

  29. 15.Does the attorney or the client hold the privilege? Who has rights under the privilege? 
  30. The client holds the privilege at all times, and it remains in force even on the death of the client, unless there is a clear waiver from the client’s legal successor. If a company is dissolved and the right to privilege is not vested to a successor there is first instance authority to the effect that former officers of that company who happen to hold privileged material are not required to assert privilege and may deploy the material (Garvin Trustees Ltd v The Pensions Regulator [2015] Pens LR 1).   

  31. 16.Can the privilege be waived? Who may waive it?
  32. Privilege can be waived. Under normal circumstances, only the client may choose to expressly waive the privilege. A solicitor cannot waive privilege without the client’s instruction to do so.

    That being said, the question of waiver is not always straightforward. Broadly, privilege may be waived expressly or implicitly through the intentional or inadvertent loss of confidentiality in the underlying advice:

    • Privilege will be waived if a privileged document is placed before a court sitting in public.
    • Privilege may be collaterally waived if privileged advice or a privileged document is referred to in a public document (eg, a legal pleading).
    • Privilege may be waived on a limited basis to a third party (eg, agreeing to share privileged documents with an investigating authority on the basis that they maintain confidentiality in the documents). NB caution needs to be exercised before entering into such a limited waiver arrangement, as “regulatory gateways” may exist whereby an enforcement authority is under a statutory obligation to disclose material that might include privileged material voluntarily shared. This type of statutory obligation may very well override agreed confidentiality terms.
    • Privilege may be waived in cases of inadvertent disclosure of privileged material (eg, if lawyers mistakenly include privileged documents in a disclosure exercise). Where it ought to have been obvious that the document was mistakenly disclosed, the court will protect the party from his mistake.   

    In the context of regulatory investigations, it is again worth noting Property Alliance Group Limited v The Royal Bank of Scotland Plc [2015] EWHC 1557 (Ch)). The court acknowledged the principle that disclosure of privileged material to a regulator through a limited waiver privilege arrangement does not prevent the client from asserting the privilege against "the rest of the world", even when the limited waiver agreement does not prevent the regulator from disclosing the material if obliged by statute. The court went on to find that relying on the findings of a regulatory body in defence of subsequent civil litigation (eg, to establish “limits of its misconduct”) could be deemed a waiver of documents provided to a regulator in the context of the regulator’s investigation (see also question 1). 

  33. 17.Is waiver all or nothing? Is it possible to waive the privilege for certain communications but not others?
  34. As touched upon above, it is an accepted principle that privilege may be waived over specific material for a limited purpose to a third party.  Best practice would be to record the terms of the limited waiver in writing and include clear confidentiality obligations. In civil litigation care must be taken when waiving privilege in some documents to avoid collateral waiver of privilege in others. The principle is that if a party chooses to deploy privileged material, they cannot “cherry-pick” and the courts may require broader disclosure where there is a concern that partial and selective waiver might lead to a misunderstanding of the position.   

  35. 18.If two defendants are mounting a joint defence, can they share privileged information without waiver? What about two parties with a common interest?
  36. English law recognises that privilege may be shared by parties where two or more parties have a joint or a common interest in the subject matter of the privileged material or in the litigation in connection with which the material was created. It is open for each party to assert privilege against ‘the rest of the world’.

    The document remains privileged in the hands of the recipient. A subsequent breakdown of the parties’ relationship does not destroy the privilege in documents already shared. Whether or not sufficient interest exists to establish joint or common interest privilege will need to be assessed on a case-by-case basis.

    Joint interest privilege – Join interest privilege ordinarily can be created through a joint retainer where parties retain the same lawyer to advise them.  

    R (Ford) v Financial Services Authority [2011] EWHC 2583 (Admin) helpfully sets out the test for finding joint interest privilege in the absence of a joint retainer.

    The question the court grappled with in this case was whether the privilege belonged not just to the company who engaged the lawyers but also to the company’s directors who received the advice. The court found that where an individual sought to claim joint privilege in this type of circumstance, they would need to provide evidence that:

    • They communicated with the lawyer for the purpose of seeking advice in an individual capacity.
    • They made it clear to the lawyer that they were seeking legal advice in an individual capacity, rather than merely as an agent of their principal.
    • Those with whom the joint privilege was claimed knew or ought to have known the legal position.
    • The lawyer knew or ought to have known that they were communicating with the individual in that individual capacity.
    • The communication was confidential.

    Common interest privilege – Common interest privilege preserves privilege in documents that are disclosed to third parties who fall outside of the lawyer–client relationship. Examples of relationships that the English courts have held amount to common interest privilege includes: co-defendants; insurers and insured; group companies (including the parent and subsidiaries)’ and agent and principal. Establishing that a sufficient common interest exists so to establish common interest privilege is not always straightforward. A careful analysis should be undertaken and documented before any documents are shared. 

  37. 19.Is it common for attorneys and clients to agree to a confidentiality provision in a contract?
  38. Confidentiality is an implicit term in a retainer with a solicitor and confidentiality is a fundamental duty of the legal profession. The Solicitors Regulation Authority (SRA) Handbook provides:

    "Protection of confidential information is a fundamental feature of your relationship with clients. It exists as a concept both as a matter of law and as a matter of conduct. This duty continues despite the end of the retainer and even after the death of the client."

    Regardless, it is not uncommon for this duty to be acknowledged in the terms of a written engagement with a solicitor.

    While barristers are regulated by the Bar Standards Board (BSB) they are subject to similar duties of confidentiality.

    Enforcement considerations

  39. 20.Describe the legal basis of the rules governing the privilege. Are these rules found in a constitution or statute, or in case law?
  40. LPP has been described as “a fundamental human right long established in the common law” (R (Morgan Grenfell & Co) v Special Commissioner of Income Tax [2003] 1 AC 563) and “a fundamental condition on which the administration of justice as a whole rests” (R v Derby Magistrates’ Court ex parte B [1996] AC 487). Similar to many other fundamental rights in English law, the rules governing privilege are found in the body of case law.

    Statutory provisions often make it clear that they are not intended to impinge on the common law right to privilege. For example, the SFO’s powers to compel a person to provide information or documents does not extend to “any information or … any document which he would be entitled to refuse to disclose or produce on grounds of legal professional privilege in proceedings in the High Court” (section 2(9) CJA 1987). Sometimes statutory provisions do not explicitly refer to privilege at common law but instead seek to formulate the common-law principles in statutory language (eg, section 413 FSMA 2000). Those provisions are to be interpreted in a manner that is consistent with common law privilege. 

  41. 21.Is the privilege primarily characterised as a procedural or evidentiary rule, or is it characterised as a substantive right? 
  42. The leading authorities in a purely domestic context suggest that privilege is a substantive right. This is owing to the fact that it is not merely a rule that protects documents from disclosure and use in legal proceedings but extends to any demand for documents by a public or other authority, even where the statutory power relied on to compel the production of documents does not contain an express carve out for privileged documents (R (Morgan Grenfell & Co) v Special Commissioner of Income Tax [2003] 1 AC 563).

    The position in the context of conflicts of law is different and is explored below. 

  43. 22.Describe any differences in how the privilege is applied in the criminal, civil, regulatory or investigatory context. 
  44. As privilege is a substantive right, the substantive principles apply whatever the context. However, inevitably and as will already be apparent from the preceding questions, different factual contexts give rise to different issues in practice.

    For example, there has been substantial case law concerning how probable civil litigation must be before litigation privilege is engaged. However, SFO v ENRC [2017] EWHC 1017 (QB), is the first case to consider that in the criminal/investigations context.   

    In the civil context, CPR r.31.19 sets out a detailed code governing the procedure a party should adopt when seeking to assert privilege during disclosure. CPR r.31.20 also provides a detailed code governing inadvertent disclosure of privileged documents. By contrast, the procedure for resolving disputed claims to privilege in the context of regulatory or SFO investigations is less readily defined.

    The FCA expressly welcomes firms waiving privilege over relevant documents and will take this into account when considering what regulatory action (if any) to take (Enforcement Guide 3.11.2). Similarly, the SFO welcomes agreement over disclosure of the products of internal investigations that may be privileged (eg, notes of interviews with witnesses). A civil litigant is, of course, free to waive privilege if they perceive a forensic advantage in doing so but in and of itself the fact of waiver offers no advantage.

    The powers of covert surveillance afforded to law enforcement officers under RIPA 2000 permit surveillance of communications between a lawyer and client, even though these may be privileged. A civil litigant plainly does not have similar powers. However, if privileged documents belonging to the other side come into a party’s possession there are limited circumstances in which he or she can deploy them at trial (ISTIL Group v Zahoor [2003] 2 All ER 252).

    The Law Society of England and Wales recently published draft guidance (currently subject to consultation) on LPP, concerning the pressure investigators may place on clients to waive privilege:

    The Law Society considers that any form of pressure put on clients to waive LLP undermines the absolute nature of the protection. In the context of criminal investigations such pressure could take the form of a suggestion that a failure to waive LPP will result in the client not being regarded as cooperative. Another form of pressure which The Law Society considers to be equally improper is to suggest that the client should conduct their affairs in such a way that LLP does not arise in the first place…Given that LPP is sacrosanct, and the law is clear that adverse inferences cannot be drawn from a client’s refusal to waive LPP, no regulator or investigator is entitled to pressure a client to waive privilege….equally, no client can be criticised, let alone treated detrimentally, if the (client) decides to assert its LPP.

    In the criminal context, the judgment in SFO v ENRC provides that because a prosecutor needs more than reasonable grounds for belief that an offence has been committed to be able to mount a prosecution, namely a prosecutor needs “sufficient cogent evidence”, then a person cannot reasonably contemplate litigation (for the purposes of litigation privilege) unless and until the person claiming privilege is aware of circumstances that once discovered make a prosecution likely.

  45. 23.Are the rules regarding the privilege uniform nationwide or are there regional variations within your country?
  46. Scotland and Northern Ireland are different legal jurisdictions to England and Wales and as such the law of privilege in those nations may differ from that in England and Wales. The extent of those differences is beyond the scope of this chapter. 

  47. 24.Does a professional organisation enforce the maintenance of the privilege among attorneys? What discipline do attorneys face if they violate privilege rules?
  48. Solicitors are regulated by the SRA. In accordance with Chapter 4(O) 4.1 of the SRA Code they are required to keep the affairs of their clients confidential. Deliberate breaches of this duty would amount to a serious regulatory breach and the lawyer would face severe sanction from the regulator, including potential strike-off.

    Barristers are regulated by the BSB. Barristers are subject to similar duties and would face similar consequences for deliberate violations of confidentiality or LPP. 

  49. 25.What sanctions do courts impose for violating the attorney–client privilege? 
  50. Privileged material is, by its very definition, confidential material. As such, all the rights and remedies available for breaches of confidentiality are also available for breaches (or threatened breaches) of privilege. Accordingly, a party can seek injunctive relief to prevent a person from using privileged materials (including in foreign proceedings) or disseminating privileged materials or to prevent a professional privy to their privileged material from acting for another party. A party might also seek to recover damages. 

  51. 26.How can parties invoke the privilege during investigations or court proceedings? Can the privilege be invoked on the witness stand?
  52. The typical scenario in which issues of privilege come up during the course of an investigation is where an investigator seeks to use its powers to compel the production of documents. Generally, those powers cannot be used to compel the production of privileged material (this will be dealt with in further detail below).

    Privilege can be invoked by witnesses giving evidence in court. In civil proceedings, no adverse inference may be drawn from an assertion of privilege. Similarly, in criminal proceedings (both in court and at interview) privilege can also be invoked. However, pursuant to section 34 CJPOA 1994 adverse inferences can be drawn from a defendant’s silence in criminal proceedings. Often defendants will not give answers to questions put to them in interview because of legal advice and the prosecution may invite a jury to draw adverse inferences from this. If, when giving evidence in court, a defendant explains that they were advised by their lawyer not to answer a question, without going further and explaining the nature and content of the advice they received (and thereby waiving privilege), the defendant is not protected from the adverse inference that may be drawn (R v Condron [1997] 1 WLR 827). Equally, merely stating that they were silent on the advice of a lawyer does not amount to waiver of privilege in the advice.  

  53. 27.In disputes relating to privilege, who typically bears the burden of proof? 
  54. The burden is on the party asserting privilege to make out their claim. Generally, it is sufficient for a solicitor to produce a witness statement explaining the basis upon which privilege is claimed. However, the court is not bound to accept that evidence. The court can order further evidence to be provided, may inspect the document itself and in some circumstances, it will order cross-examination of the person asserting privilege. Where the court does inspect the document(s) in which privilege is claimed, the inspection will not be performed by the trial judge. 

  55. 28.Does the privilege protect against compulsory disclosures such as search warrants or discovery requests? Is there a distinction between documents held by the client and documents held by the attorney? 
  56. The powers of regulators and prosecutors to compel the production of privileged materials does not extend to material which is privileged. In particular, the SFO’s powers under section 2 CJA 1987 do not require a person to provide privileged information or documents. Similarly, the FCA’s powers to compel the production of documents does not extend to privileged material (section 431 FSMA 2000). 

    Further, the powers to seize materials pursuant to search warrants or similar powers does not extend to privileged material. One exception is Part 2 CJPA 2001. Where it is not reasonably practicable to determine whether material is privileged, or it is not reasonably practicable to separate privileged from non-privileged material (eg, it is all stored on the same hard drive) the material may be seized. However once the material is in the possession of the authority, the privileged material is then separated from the material the authority is entitled to. The task of reviewing for privilege will usually fall to independent counsel.  

  57. 29.Describe the choice-of-law rules applied by your courts to determine which country’s privilege laws apply. To what extent does your country recognise the validity of choice-of-law provisions in contracts, particularly as they apply to privilege?
  58. The courts of England and Wales apply the law of the forum (ie, English law) to procedural and evidential issues, irrespective of the law governing the substantive dispute. While privilege is ordinarily thought of as a substantive right, when choice of law issues arise, it is treated as a procedural or evidential issue. Thus whenever an issue of privilege arises in an English court, the English law of privilege applies (The RBS Rights Issue Litigation [2016] EWHC 3161 (Ch)).  

    Accordingly, if a document would be protected by a privilege recognised by foreign law but not English law, it will not be protected from disclosure by an English court. This approach to choice of law is inconsistent with the modern recognition that privilege is a “substantive right”, has been subjected to academic criticism and may be revisited by a higher court. 

    Termination of the privilege

  59. 30.Does the privilege terminate on the death of either the attorney or the client?
  60. Privilege does not terminate on the death of the attorney. It belongs to the client at all times. If the client dies during the currency of litigation, and during a time when legal advice issues are extant, it remains in force unless there is a clear waiver from the client’s legal successor.

  61. 31.Does the privilege terminate on the conclusion of the attorney-client relationship?
  62. Since the privilege attaches to the client, not the attorney, it is for the client to decide whether the termination of the relationship should lead to a waiver. Communications with a former attorney remain privileged unless waived by the client.

  63. 32.Is the privilege destroyed if the client communicates information to the attorney to further a crime or perpetuate a fraud?
  64. There is no privilege if a client communicates any information to his or her lawyer, or seeks legal advice, in order to facilitate the commission of a crime, or assist in covering it up. The "iniquity exception" is triggered even where the communication by the client is innocently made on behalf of a dishonest third party. Equally, where the legal adviser who receives the communication is not aware of the illegal purpose, and acts in good faith, the exception will be invoked.

  65. 33.Is the privilege terminated if the attorney makes an inadvertent disclosure? If such a disclosure is made, can the attorney retrieve the privileged information or otherwise correct the error?
  66. An inadvertent or accidental disclosure of privileged material may result in a de facto waiver of privilege. The courts have been willing to prevent such a result where the use of the material is deemed to be improper (Ashburton v Pope [1913] 2 Ch 469 and Goddard v Nationwide Building Society [1987] 1 QB 670).

    Where an accidental disclosure is an obvious mistake, which should have been recognised by the other party, the court will protect the holder of the privilege from the consequence of their mistake (Al-Fayed v Commissioner of Police for the Metropolis [2002] EWCA Civ 780).

  67. 34.Is the privilege terminated if a third party is included in the communication or is subsequently forwarded the communication?
  68. Privilege may be terminated by the communication of the privileged material to a third party, but if the document and its information remain confidential, and not available for use by any other party, privilege will be retained (Bourns v Raychem [2002] 2 All ER 779). 

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Questions

    Scope of the privilege

  1. 1.Are communications between an attorney and client protected? Under what circumstances?
  2. 2.Does the privilege only protect legal advice? Does it also protect non-legal communications between an attorney and client, such as business advice?
  3. 3.Is a distinction made between legal advice related to litigation and other legal advice?
  4. 4.

    What kinds of documents are protected by the privilege? Does it cover documents that were prepared in anticipation of an attorney-client communication? Does it cover documents prepared during an attorney-led internal investigation?


  5. 5.To what extent must the communication be confidential? Who can be privy to the communication without breaking privilege?
  6. 6.Is the underlying information privileged if it can be obtained from a non-privileged source?
  7. 7.Are there any notable exceptions or caveats to the privilege?
  8. 8.Are there laws unrelated to privilege that may protect certain communications between attorney and client?
  9. Protected parties

  10. 9.To what extent does the privilege extend to in-house counsel? 
  11. 10.Does the privilege protect communications between an attorney and a corporate client’s employees? Under what circumstances?
  12. 11.

    Does the privilege protect communications between non-lawyer employees of a corporate client if they are acting at the direction of counsel or gathering information to provide to counsel?


  13. 12.Must the attorney be qualified to practise in your country to invoke the privilege?
  14. 13.

    Does the privilege extend to non-lawyer third parties? In which circumstances does the privilege protect communications with third parties if they are providing advice related to a legal matter?


  15. 14.Does the privilege apply to communications with potential clients?
  16. Ownership of the privilege

  17. 15.Does the attorney or the client hold the privilege? Who has rights under the privilege? 
  18. 16.Can the privilege be waived? Who may waive it?
  19. 17.Is waiver all or nothing? Is it possible to waive the privilege for certain communications but not others?
  20. 18.If two defendants are mounting a joint defence, can they share privileged information without waiver? What about two parties with a common interest?
  21. 19.Is it common for attorneys and clients to agree to a confidentiality provision in a contract?
  22. Enforcement considerations

  23. 20.Describe the legal basis of the rules governing the privilege. Are these rules found in a constitution or statute, or in case law?
  24. 21.Is the privilege primarily characterised as a procedural or evidentiary rule, or is it characterised as a substantive right? 
  25. 22.Describe any differences in how the privilege is applied in the criminal, civil, regulatory or investigatory context. 
  26. 23.Are the rules regarding the privilege uniform nationwide or are there regional variations within your country?
  27. 24.Does a professional organisation enforce the maintenance of the privilege among attorneys? What discipline do attorneys face if they violate privilege rules?
  28. 25.What sanctions do courts impose for violating the attorney–client privilege? 
  29. 26.How can parties invoke the privilege during investigations or court proceedings? Can the privilege be invoked on the witness stand?
  30. 27.In disputes relating to privilege, who typically bears the burden of proof? 
  31. 28.Does the privilege protect against compulsory disclosures such as search warrants or discovery requests? Is there a distinction between documents held by the client and documents held by the attorney? 
  32. 29.Describe the choice-of-law rules applied by your courts to determine which country’s privilege laws apply. To what extent does your country recognise the validity of choice-of-law provisions in contracts, particularly as they apply to privilege?
  33. Termination of the privilege

  34. 30.Does the privilege terminate on the death of either the attorney or the client?
  35. 31.Does the privilege terminate on the conclusion of the attorney-client relationship?
  36. 32.Is the privilege destroyed if the client communicates information to the attorney to further a crime or perpetuate a fraud?
  37. 33.Is the privilege terminated if the attorney makes an inadvertent disclosure? If such a disclosure is made, can the attorney retrieve the privileged information or otherwise correct the error?
  38. 34.Is the privilege terminated if a third party is included in the communication or is subsequently forwarded the communication?