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Home | News & events | Legal updates | Privilege: Must you show your hand?
Privilege: Must you show your hand?
16 June 2010
What is privilege? When the parties in dispute reach the stage of disclosure, they have to review their documents (both hard copy and electronic) in order to determine which they are obliged to disclose.
A privileged document can be withheld, and need not be shown to the other side or to the court. Once privilege has been established a party has an absolute right to withhold the document in question and no adverse inference will be drawn by the court.
There are different types of privilege:
- Legal Professional Privilege, which includes legal advice privilege and litigation privilege
- Joint Privilege
- Common Interest Privilege
This article will focus on Legal Professional Privilege (LPP).
LPP
Legal advice privilege and litigation privilege are both types of LPP. Legal advice privilege can apply whether or not litigation is contemplated. Litigation privilege only applies when litigation is pending or contemplated.
Legal advice privilege
This protects confidential communications (and evidence of those communications) between a lawyer and a client provided the communications are for the purpose of seeking and receiving legal advice. It does not protect communications with third parties.
The 'client' is restrictive in this context - it does not extend to everyone within the organisation, or even the whole department or division seeking the legal advice. It is only those individuals who are specifically tasked with seeking and obtaining legal advice from their lawyers. Communications falling outside of this remit are generally not privileged.
Legal advice privilege is not confined to advice on the law - it also covers advice as to what should 'prudently and sensibly be done in the relevant legal context'. This will encompass commercial or strategic advice provided that it relates to a client's legal rights, liabilities, obligations and remedies.
However, it will not apply to advice or to documents created as a result of a strategic or commercial nature that is not provided in a 'relevant legal context'.
Litigation privilege
This protects confidential communications (and evidence of those communications) between a lawyer and client and/or between a client and third party, provided that the communications are created for the dominant purpose of obtaining legal advice, evidence or information in preparation for actual litigation, or litigation that is reasonably in prospect, (ie more than a mere possibility).
Internal grievances, disciplinary proceedings, fact-finding enquiries and investigations are excluded. Also it will not be enough to create a document for an entirely separate purpose and later seek to rely on litigation privilege.
Generally, LPP applies to advice given by external lawyers and in-house lawyers provided that:
- they act in their capacity as lawyer and not in an executive or compliance capacity
- they are qualified to practice under the Solicitors Regulatory Authority or Bar Council rules
- in the case of solicitors, they hold a current Practising Certificate
However, one notable exception is the advice given by in-house lawyers to their employers in respect of EU commission competition investigations which will not be covered by LPP - for more detail see our earlier article.
Practical steps to retain privilege
In order to ensure that the legitimate claims to privilege are protected, we recommend that:
- It is sensible to mark documents Legally privileged: Strictly private and confidential. Not for circulation. Note, however, that this does not, of itself, mean any document is privileged and protected from disclosure. Communications with legal advisors should be kept separate on a distinguishable and clearly marked file.
- It is essential to identify the key individual or 'core team' who will have responsibility for managing the instructions to the lawyers. It is clear from recent case law that it is essential the core team must be restricted in number to those key individuals who genuinely and routinely are required to give instructions in any case.
- Wider dissemination of legal advice, for example, to a Board, whether by email, board reports or recording advice in Board minutes can often result in privilege being lost if a court takes the view that the Board is wider than the core team.
- Care must be taken to ensure that individuals outside the core team do not create documents which relate to the dispute. If they do so, these documents will not necessarily be privileged and may need to be disclosed.
- It is sensible to obtain legal advice before asking a member of staff or indeed third parties (such as accountants) to undertake research or investigative work connected to the instruction of the legal advisors, again to ensure that such steps are privileged.
- The circulation of any written legal advice provided by external lawyers and any notes or summaries of that advice should be restricted to the core team. Caution should also be exercised when commenting on the advice provided by the legal advisors in writing, or when showing it to colleagues. The reporting of any advice provided should be limited to a verbal summary only. No note of the verbal advice should be referred to in minutes of any meetings in order to preserve privilege.
What does this mean?
You must think carefully about what documentation you create and what use is made of it in order to protect your entitlement to claim privilege from disclosure.
What should you do?
- any advice received in writing or otherwise from internal or external lawyers should be retained within the core team and should not be distributed beyond that group
if absolutely necessary, a summary of the advice provided can be given verbally to a limited number of people beyond the core team, but no note of that verbal summary should be recorded in documents such as board minutes, which would have to be disclosed in any contentious proceedings - these principles apply to any legal advice but are especially relevant in litigation or where a dispute, regulatory investigation or inquiry is anticipated
- if in any doubt seek early legal advice about your rights and obligations
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Elizabeth Beatty
Associate
T: 03700 86 4225
I: +44 (0)121 625 4225
E: elizabeth.beatty@shoosmiths.co.uk