Legal advice privilege attaches to ‘continuum of communications and meetings’ (Property Alliance v RBS)

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.

Practical implications

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:

  • in the context of regulatory investigations (as this was), dealing with and coordinating communications and responses is a serious and complex matter in which advice and assistance from specialist lawyers will naturally be sought by a client
  • it is entirely understandable to give lawyers a leading/co-ordinating role such that they arrange meetings and set agendas as part (though not necessarily the primary part) of the provision of their legal services
  • documents created in this context (even in tabular format) by way of updates and summaries fall precisely into the category of ‘continuum of communication’ (see below) over which legal advice privilege can be claimed. In other words, even if those documents do not expressly refer to legal advice or include words to the effect of ‘please advise me’, they may be protected by legal advice privilege where they were provided as part of the necessary exchange of information, the object of which was the giving of legal advice privilege as and when appropriate (para [32])
  • where lawyers who were present at meetings give their impressions on matters and responded to questions on strategy this falls within the provision of legal advice
  • privilege can also extend to any record of advice made within a client’s organisation, for example by copy or paraphrase—however, it does not go as far as mere inference (unless the inference is so obvious it amounts to the statement itself)
  • as such, it is possible to redact on the basis of legal advice privilege part of an internal company minute that referred expressly or by obvious inference to advice received from a solicitor
  • however, simply because the minutes of a business meeting are taken by a lawyer and then sent to the client does not necessarily attract legal advice privilege as the lawyer is not ‘being asked qua [as a] lawyer to provide legal advice’ but was simply being asked to take certain steps for convenience (para [41]) (Three Rivers, see below). The same is true of, for example, a firm sending a press cutting to their client for the purposes of a board meeting because the client was unable to find it themselves
  • sometimes, on inspection (as here), it can be clear that documents are ‘no more than a brief factual recital of a recent event that had occurred or which was scheduled’. In such cases, documents may be better described as ‘informing and updating’ rather than ‘advising’ (which is a ‘rather loaded’ term in the context of privilege) and yet still be protected by legal advice privilege by reason of forming part of the continuum of communications (para [14])
  • examples of lawyer/client communications which would not attract privilege, being unrelated to the obtaining of legal advice, were set out in Balabel and para [33], including

         -  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:

  • confidential memoranda in the form of tables prepared by Clifford Chance (RBS’ external lawyers) which ‘advised and updated’ the ESG on the progress, status and issues arising in the investigations
  • confidential notes/summaries drafted by Clifford Chance concerning discussions between the ESG and its legal advisors at ESG meetings—these notes were circulated by Clifford Chance after meetings thereby also constituting summary minutes

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:

  • the provision, in addition to legal services, of ‘business services’ by solicitors. This was addressed in Three Rivers in which it was said:
  • there must be a ‘relevant legal context’ for the advice to attract legal advice privilege
  • to extend the privilege to all communications between solicitor and client would be too wide (per Lord Taylor, Balabel)
  • in cases of doubt the judge should ask whether the advice relates to the right, liabilities, obligations or remedies of the client under private or public law. If it does relate, then the judge must ask if the communications fall within the public policy underlying the justification for the privilege. In other words, do the circumstances make it reasonable to expect the privilege to apply?
  • the key is whether the lawyers are being asked ‘qua lawyers’ to provide legal advice
  • not all communications between a solicitor and his client will necessarily be for obtaining or giving legal advice. This was clarified in Balabel in which Lord Taylor said that ‘the test is whether the communication or other document was made confidentially for the purposes of legal advice. Those purposes have to be construed broadly’. He went on to say that in protracted dealings there will be a ‘continuum of communication’ where information is passed between the solicitor and client to keep both informed so that advice may be sought and given as and when required. This ‘continuum’ attracts legal advice privilege. In this context, although a letter from a client may end ‘please provide me with advice as to what I should do’, even if it does not there will usually be implied in the relationship an overall expectation that the solicitor will give advice when appropriate

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 [27], [42]).

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 [28]-[32])

Policy

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 [45])

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.

Court details

  • Court: High Court, Chancery Division
  • Judge: Mr Justice Snowden
  • Date of judgment: 5 November 2015
Filed Under: Enforcement

Relevant Articles
Area of Interest