Locations
Introduction
In an important judgment for all practitioners, especially those working in-house, the Court of Appeal has further clarified the test for legal advice privilege ("LAP"). The judgment will prompt reconsideration by clients and their lawyers of how they should position themselves to ensure, where appropriate, that any communications remain privileged from disclosure in court proceedings. In this Insight we recap on the leading cases on privilege.
Background
In a December 2017 press release, the CAA heavily criticised Jet 2.com Ltd ("Jet 2") for its failure to participate in ADR processes for settling consumer disputes which the CAA had promoted. Citing legitimate reasons for its omission from the ADR Scheme, Jet 2 complained to the CAA, receiving a written response in February 2018. The CAA subsequently published the correspondence (including to a tabloid newspaper) in April of the same year. Jet 2 then issued judicial review proceedings against the CAA alleging that the CAA had no power to publish the press release and/or the correspondence or alternatively, if it had such power, that it exercised the power for unauthorised and improper purposes.
In order to demonstrate the intention and tone of the disclosure, Jet 2 sought specific disclosure of previous drafts of the CAA response and records of related discussions. The CAA claimed legal advice privilege over the drafts and communications.
On appeal, the Court of Appeal held that (i) the dominant purpose of the documentation being sought was not to obtain legal advice, and (ii) the 'dominant purpose test' applies to legal advice privilege as well as litigation privilege. Giving the leading judgment, Lord Justice Hickinbottom held that the dominant purpose of the correspondence was to seek a commercial opinion and that simply copying in one's in-house legal team to communications was not a valid way of cloaking that correspondence with LAP. Accordingly, the Court held that the communications were not privileged.
Privilege
In legal proceedings, a party can resist disclosure of communications and material that is 'privileged'. Historically, the courts have distinguished between LAP (where the communication is between a client and its lawyers for the general purpose of giving or receiving legal advice) and litigation privilege (where the communication is not restricted to the lawyer/client, but must be for the dominant purpose of obtaining information or advice in connection with existing or contemplated litigation).
The "Dominant Purpose" Test
The Court held that a party asserting privilege must demonstrate that its dominant purpose in creating or sending the communication was to obtain legal advice. The Court held that despite the lack of a clear authority on the issue, existing authorities favour the view that the dominant purpose test applies to LAP, and that 'general' lawyer/client communications will not automatically be privileged from disclosure.
In summary, the Court found that the following types of communications would be protected by LAP:
- A rolling series of communications in which the dominant purpose is to instruct a lawyer;
- A lawyer's response to an instruction, even where copied to numerous addressees; and
- A multi – addressee communication between lawyers and non-lawyers where the dominant purpose is to seek or provide legal advice.
The Court also had to consider the previous judgments of Three Rivers (No. 5) [2003] Q.B.1556 and Director of the SFO v Eurasian Natural Resources Co ("ENRC") [2018] EWCA Civ 2006 (which we analysed here). In Three Rivers (No 5), the Court of Appeal held that communications between an employee of an organisation and the organisation's external lawyers would not attract LAP unless that particular employee had the job of giving or receiving that advice. This judgment has been criticised for placing larger companies with more dispersed decision-making structures at a disadvantage. In ENRC, the Court of Appeal appears to have considered itself bound by the decision in Three Rivers (No. 5), and consequently rejected the need to make the dominant purpose test a further qualification for LAP, although this was not central to its judgment on the main issues. Although in the present case the Court was able to distinguish the facts from those in Three Rivers (No 5), that case continues to cast a long shadow, and it remains to be seen whether it will eventually be rationalised by the Supreme Court or simply subject to further refinement by the lower courts.
The "Continuum of Communications"
Following the broad approach to "the continuum of communications" endorsed in Three Rivers (No 6) [2005] 1 AC 610 the Court held that communications sent for keeping the solicitor and client informed could be protected by privilege if sent in the context of obtaining legal advice. It was, however, too simplistic to say that parties could rely on the job description or retainer under which the solicitor acts in order to obtain blanket privilege. The solicitor's role, especially when working in-house, is dynamic and often strays into that of a commercial advisor; at such times, their advice has the potential to be relevant evidence to be put before the court, rather than legal advice that attracts privilege from disclosure.
The Court was also clear that it would be prepared to sever non-privileged parts of a document that includes legal and non-legal elements, meaning that a series of communications may not necessarily remain protected by privilege from beginning to end.
The Court's willingness to view the solicitor's role as multi-faceted is likely to be of little comfort to companies with in-house legal teams. As the Court of Appeal recognised, the solicitor's role is often "not confined to telling the client the law, it must include as to what should prudently and sensibly be done in the relevant legal context." Drawing the distinction between when a solicitor is giving legal advice infused with a commercial element and when they are giving solely commercial advice may prove difficult. The judgment is a warning to companies and their advisors to be clear of the context and purpose for which they are using their legal team.