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Legal advice privilege: does a lawyer get you home and dry?

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Sarah Henchoz

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26 August 2020

It is often assumed that if a lawyer plays some part in the creation or production of a document, it automatically becomes privileged, giving it protection from disclosure in subsequent litigation.

The recent High Court decision in A v B is a reminder that legal advice privilege will only apply between a lawyer and client when the document (or other evidence) reflects that its dominant purpose is to provide legal advice in a relevant legal context. The case reported below examines privilege in a regulatory context and therefore will be of interest to those employers in financial services and other regulated sectors.

Background  

The dispute arose in a regulatory context in that the Financial Reporting Council (FRC) sought disclosure of documents from the auditor (B) of a large retail client in the context of an investigation by the FRC into the auditor. The client (A) asserted that certain of those documents were privileged, that the privilege in those documents belonged to A and that they should not be disclosed by B to the FRC. The first case concluded that the auditor can form its own view on whether the documents were privileged. These subsequent proceedings looked at the substance of five documents, which included board minutes, to establish whether they were privileged or not. 

What is legal advice privilege?

Legal advice privilege attaches to communications made in confidence between lawyers and their clients for the dominant purpose of giving or obtaining legal advice in a relevant legal context. As the judge in this case noted, this extends to documents (such as internal communications within a company) which reproduce legal advice for dissemination to those who need it, provided confidentiality is maintained.

It is not necessary for each communication between a lawyer and client to contain legal advice or a request for legal advice in order for legal advice privilege to apply. It is sufficient for it to be advice on what can or should prudently and sensibly be done, so long as that advice is given in a legal context. Where that is the case, the entirety of the communication is privileged. In other words, the continuum of communication between lawyer and client will be protected.

Documents examined by the High Court

The table below sets out the documents examined by the High Court together with the outcome on privilege and the judge’s reasoning.

Document

Why privilege was asserted by the client

Privileged

 Court Reasoning

Executive Committee Minutes x 2

  • GC had modified versions of the documents
  • Documents marked confidential & privileged
  • There was a section headed Legal & Regulatory matters

No

  • Documents amounted to a record of the meeting
  • They did not contain legal advice
  • GC’s input was no more than fulfilling a secretarial function
  • Lawyers often perform secretarial functions by recording discussions at important meetings
  • GC spent no more than a few minutes editing documents
  • Calling a document privileged does not affect its status
  • There was nothing in the document to indicate that legal advice had been given at the meeting

Board Meeting minutes

The metadata showed that the minutes were originally prepared by a lawyer from an external law firm

No

The evidence simply pointed to it being a record of the meeting which neither expressly recorded the communication of advice nor in its form reflected legal advice which had been given

Risk Register

Prepared by GC with the dominant purpose of giving legal advice

No

  • How to mitigate risks could amount to legal advice but not in these circumstances
  • A document is not privileged because it takes account of legal advice; it would need to communicate or make clear the substance of that legal advice

Draft Chairman’s script

  • The version was prepared by an external lawyer and included comments by the lawyer
  • The document contained one comment from the external lawyer which had been struck out in track changes but was still visible

No

  • This particular version of the script was not likely to have been produced by the lawyer as the lawyer’s comment had been deleted
  • With the exception of the deleted comment, there was nothing to indicate that it communicated legal advice

 

Comment

The case is a useful application of the rules on legal advice privilege, which neatly illustrates how privilege will very often not be available, notwithstanding the involvement of lawyers in the creation of documents. It is the nature and content of the document that is critical and not the way it was created, or who was involved in its creation. Particular points to note include:

  1. Labelling a document as privileged is not determinative of its status.
  2. Having a lawyer create a document will not necessarily mean that the document is privileged. It will only benefit from legal advice privilege if the document contains advice or is part of the continuum of giving advice. In particular, where litigation is not in contemplation, a fact finding exercise would not be privileged, unless it could be said to be part of the process of providing legal advice. This is a question of fact.
  3. Having a lawyer set up, run, or provide secretarial assistance to a committee will not mean that the committee’s papers are automatically subject to privilege.
  4. The fact that a document has been produced, with advice having first been taken, does not mean that the document is privileged.
  5. Where maintaining privilege is important, this needs to be considered at the outset of a matter and at any stage where there is particular sensitivity around certain documents.
  6. It is better to be conservative and to assume that privilege will not apply, rather than proceeding on the assumption that it will.
  7. Having something open and on the record is not necessarily a bad thing. In many cases it will be positively helpful in establishing a client’s position – and the facts are the facts – they can never be cloaked by privilege.

Key contacts

If you would like to discuss any of the issues raised in more detail, please speak to any of the contacts tagged to this article or your usual Allen & Overy Employment Team contact.

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