High Court decides that legal advice privilege extends to foreign lawyers regardless of national standards (PJSC Tatneft v Bogolyubov)

High Court decides that legal advice privilege extends to foreign lawyers regardless of national standards (PJSC Tatneft v Bogolyubov)

The court held that legal advice privilege extends to communications with foreign lawyers, whether or not they are in-house or independent, and the court should not enquire into the extent of their qualification or regulation, or whether legal advice privilege applies in their home jurisdiction. Privilege involving foreign in-house lawyers will now be much easier for clients to establish and will be very difficult to challenge. Written by Barry Smith, associate, at Aliant Law.

PJSC Tatneft v Bogolyubov and others [2020] EWHC 2437 (Comm) (11 September 2020)

What are the practical implications of this case?

This important case makes it clear that legal advice privilege applies to foreign qualified in-house lawyers, even if as a matter of their local law and regulations no such privilege would apply. As long as they are established as ‘lawyers’ per se, the court will not concern itself with their level of qualification or experience, or foreign distinctions between different types of lawyers. It was clear from the court’s decision that there was a strong public interest in taking a clear and consistent approach to privilege which would minimise the need for complex satellite litigation on the status of foreign lawyers. Practically speaking, it will now be very difficult to challenge a claim to privilege where the qualifications of a foreign lawyer do not easily equate to those in England and Wales. This case will be of particular interest to those who practice in white collar crime, where the question of privilege is often raised in the context of internal investigations.

What was the background?

The court was asked to determine a claim to legal professional privilege. Following standard disclosure, PJSC Tatneft sought to withhold disclosure based on legal advice privilege asserted over communications with the company’s employees and officers, and members of its internal legal department. Igor Komoloisky, the second defendant, sought an order for information relating to Tatneft’s compliance with its disclosure obligations, and inspection of documents previously withheld based on in-house legal advice privilege. Komoloisky disputed that legal advice privilege applied to the in-house lawyers on the basis that they were not members of the Russian Bar and their activity did not fall under the Russian regulations for advocates. It followed that in terms of Russian law, the equivalent of legal advice privilege did not apply. Tatneft argued in response that Russian law was irrelevant to the question of legal advice privilege.

What did the court decide?

The court confirmed that the rationale for legal advice privilege can be found in the strong public interest that clients can obtain legal advice, and that these communications should be confidential—Three Rivers (No 6) [2005] 1 AC 610. This was consistent with that rationale that legal advice privilege extends to foreign lawyers without regard to their particular national standards, regulations, or rules with regard to privilege—R (on the application of Prudential plc and another) v Special Commissioner of Income Tax [2013] UKSC 1. Ultimately, the court saw no reason to distinguish between foreign independent lawyers and foreign in-house lawyers, based on the underlying rationale and public interest, above.

The court considered Lawrence v Campbell (1859) 7 WR 170 (not reported by Lexis®Nexis), which concerned Scottish solicitors. In Lawrence the court gave weight to the public interest rationale underpinning legal advice privilege as well as to the lawyers’ status, and held it was the ‘function’ of the relationship and not the ‘status’ of the lawyer which was the relevant question in the case of foreign lawyers. This was consistent with the rationale of protecting a party who wished to take legal advice. Having reviewed the caselaw, the court held that it was not necessary to establish that the foreign lawyer was ‘appropriately qualified’ as had been elsewhere suggested, and that a broad approach should be taken to foreign lawyers, this being more consistent with the ‘fairness, comity and convenience’ approach endorsed in Prudential. The court was reluctant to concern itself with questions of sufficiency of foreign qualifications and regulations, not least as the evidence in this case suggested that half of the representatives in Russian civil disputes did not meet the specific category of qualification relied upon to have the benefit of legal advice privilege. Further, as in Russia the relevant category of in-house lawyers could not practice independently it would be unfair to deprive their clients from asserting privilege.

The only test to be applied is whether the material relates to communications passing between a client and its lawyers, acting in their professional capacity, in connection with the provision of legal advice (Prudential).

The court rejected an application for an order for the party asserting privilege to set out the arrangements and information behind the privilege; the court had already determined that it should not enquire as to the sufficiency of local qualifications and seek to make a like-for-like comparison with England and Wales.

Case details

  • Court: Commercial Court, Queen’s Bench Division, High Court of Justice
  • Judge: Mr Justice Moulder
  • Date of judgment: 11 September 2020

Barry Smith is an associate at Aliant Law, and a member of LexisPSL’s Case Analysis Expert Panels. If you have any questions about membership of these panels, please contact caseanalysis@lexisnexis.co.uk.

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