Legal advice privilege did not protect facts about client’s assets
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A solicitor could not rely on legal advice privilege to avoid giving evidence about a client’s assets. The decision reinforces the well-established principles and limits of legal advice privilege – it only applies to “legal advice” given by a solicitor to the client, and does not apply to communications between a solicitor and third parties. The decision also refers to the distinction between a solicitor acting as a legal adviser, opposed to as a “man of business”; it is clear that the latter scenario will not attract legal advice privilege: Anthony David Kerman v Tatiana Akhmedova [2018] EWCA Civ 307 CA (Civ Div), 27 February 2018
In this highly publicised divorce case, the husband’s long-term legal adviser, Mr Kerman, was asked about his role in arranging insurance for his client’s highly valuable art collection in order that its location could be ascertained (for financial settlement enforcement purposes).
Mr Kerman attended court as requested but refused to answer the questions, on grounds of legal advice privilege. Haddon-Cave J rejected these objections and Mr Kerman appealed.
A reminder on the basic principles of privilege
The overarching principle is that confidential communications between client and solicitor for the purposes of obtaining legal advice are privileged from disclosure, and once the privilege is established it is absolute and permanent. The client is the person entitled to the privilege, and they have the right to decline or allow the disclosure of the communications in question: it is the duty of the solicitor to defend the client's privilege.
Legal advice is not confined to telling the client the law, but includes “advice as to what should prudently and sensibly be done in the relevant legal context”.
Where the lawyer is not wearing “legal spectacles” but, rather, is acting as the client's "[wo]man of business", there will be no legal advice privilege.
No privilege over facts
The Court of Appeal dismissed the appeal. The questioning of Mr Kerman had been confined to two topics of fact, namely, the insurance and business arrangements concerning the art collection. Mr Kerman was not being asked to reveal legal advice, dealings with clients or instructions from them or communications with them; accordingly there was no basis for a claim to privilege. It was re-affirmed that communications between a solicitor and a third party (here, a solicitor and insurers) are not covered by legal advice privilege, with the Court of Appeal citing with approval the recent high-profile decision in SFO v ENRC.
Sir James Munby also confirmed that a solicitor cannot refuse to answer questions on grounds of privilege where the client would not be able to do so – not least because privilege belongs to the client, not the lawyer.
COMMENT
Whilst set in a family law context, the issues raised in relation to legal advice privilege are useful reminders to all. The case provides a timely reminder that whilst legal advice privilege is a fundamental principle of justice that allows a solicitor to communicate openly with his/her client; it is clear from this decision that the Court will not entertain attempts to conceal “business” discussions behind the cloak of privilege.
Further information
This case summary is part of the Allen & Overy Litigation and Dispute Resolution Review, a monthly publication. If you wish to receive this publication, please contact Amy Edwards, amy.edwards@allenovery.com.