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The Chancery Division has considered the principles of legal advice privilege and upheld a claim to it following inspection of the documents in question. In doing so, the High Court has clarified the extent to which communications between a lawyer and its client—which do not, of themselves, explicitly refer to legal advice—may be covered by legal advice privilege to the extent that they form ‘part of the ‘necessary exchange of information of which the object is the giving of legal advice as and when necessary’ (the ‘continuum of communications’). In the present case, the meetings out of which the documents arose all had very substantial legal content and had (unsurprisingly) been led by the lawyers present. The claim to legal advice privilege was therefore upheld.
This judgment is of interest to practitioners in its clarification of some of the types of documents which may or may not be covered by legal advice privilege, particularly in the context of regulatory investigations. Some of the practical implications which arise, include that:
- a client notifying its solicitor of the sale of a property
- a client asking their solicitor to collect rents from tenants during their absence
Background to RBS' claim to legal advice privilege
The claimant, PAG, brought proceedings against the defendant, RBS, on the basis it was induced to enter into four interest rate swap agreements by misrepresentation.
RBS was ordered to disclose all information relating to LIBOR which ran to 25 million documents. It was therefore agreed the exercise would be limited to ‘high level’ internal reports, reviews and summaries on LIBOR misconduct by RBS. This included documents arising from meetings of the RBS ‘Executive Steering Group’ (ESG) over which RBS sought to claim legal advice privilege.
The judge hearing the case, Birss J, was not satisfied that the claim to legal advice privilege had been correctly made out in respect of the ESG documents and made an order for inspection by the court.
Snowden J was appointed as the inspecting judge and, as a preliminary step, ordered RBS to set out the background to the ESG. This, in short, had been set up to oversee the conduct of RBS’ responses to the regulatory investigations in various jurisdictions and provided a forum for discussion with external legal advisors about the status, issues and next steps in those various numerous regulatory investigations.
The ESG documents were classified into two types:
The requirements for legal advice privilege
The basic requirements for a claim to legal advice privilege are set out in Three Rivers in which it was said :
‘In the formulation of Millett J in Price Waterhouse…legal advice privilege attaches to all communications made in confidence between solicitors and their clients for the purpose of giving or obtaining legal advice even at a stage when litigation is not in contemplation.’
A further accepted element to the doctrine of legal advice privilege was explained in Balabel:
‘…legal advice is not confined to telling the client the law; it must include advice as to what should prudently and sensibly be done in the relevant legal context.’
However, some tension has arisen around two areas of uncertainty:
Were the documents privileged?
Snowden J upheld RBS’ claim to legal advice privilege in relation to all of the ESG high level documents he inspected.
In doing so, he considered legal advice privilege could validly be claimed over all the documents from the ESG by satisfying both the requirements of 'relevant legal context' and 'continuum of communications'. In addition, the court found the communications fell squarely within the policy underlying the justification for legal advice privilege—see below in relation to each.
Relevant legal context
Clifford Chance (the authors of the documents) had been engaged by RBS in a ‘relevant legal context’ even though they also acted as administrative support. More particularly, they had attended ESG meetings etc primarily for the provision of legal advice and assistance in relation to the regulatory investigations RBS was facing in a number of jurisdictions and in relation to which the consequences could be extremely serious. The administrative functions were being provided as ‘an integral part of their provision of legal advice and assistance’ (paras , ).
Continuum of communications
The two types of document formed ‘part of a "continuum of communications and meetings" between Clifford Chance and RBS, the object of which was the giving of legal advice as and when appropriate’. More particularly, even documents which do not explicitly seek or give advice could be covered by legal advice privilege where ‘their purpose was clearly to provide a comprehensive and up-to-date summary of developments in the regulatory investigations as the basis for the discussions at the regular meetings between the ESG and its legal advisers’. Per Balabel:
‘all documents forming part of the continuum of communications between lawyer and client for the purposes of obtaining legal advice would be privileged, even if they did not expressly refer to legal advice, provided that they were part of the "necessary exchange of information of which the object is the giving of legal advice as and when appropriate". It is therefore quite clear that the communication of information between a lawyer and client can be privileged, provided that it is information that is communicated in confidence for the purposes of the client seeking, and the lawyer giving, legal advice. The test is one of relevance and purpose: the source of the information makes no difference’ (paras -)
The Chancery Division also found the communications fell within the policy underlying the justification for legal advice privilege as communications between a client and their lawyer are no different in the context of regulatory investigations:
‘There is a clear public interest in regulatory investigations being conducted efficiently and in accordance with law. That public interest will be advanced if the regulators can deal with experienced lawyers who can accurately advise their clients how to respond and co-operate. Such lawyers must be able to give their client candid factual briefings as well as legal advice, secure in the knowledge that any such communications and any record of their discussions and the decisions taken will not subsequently be disclosed without the client's consent.’ (para )
Did privilege attach to the documents in their entirety or could they be redacted so as to allow for inspection?
PAG argued that, even if parts of the ESG documents were privileged, the rest should be disclosed. This argument was based on a contention that the ESG had a wider remit than simply receiving legal advice.
In rejecting this argument, Snowden J held that the case of FSCS (on which PAG relied) was in fact concerned solely with whether redactions could be made to an internal document so as to protect privilege that attached to legal advice contained in a different communication. This may be relevant where the ESG had prepared documents itself, however, neither FSCS nor Atos were authority for the proposition that a litigant has to redact then disclose privilege communications sent to him in confidence by their lawyer. Instead, the documents fell precisely into the ‘continuum of communications’ category.
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