What is protected by legal professional privilege?
Litigation privilege
Litigation privilege affords a wider protection than legal advice privilege since, where it applies, it can protect communications with third parties as well as those between a lawyer and their client. It applies where adversarial proceedings are existing or are reasonably in prospect (for instance, where negotiations over a contractual issue are breaking down or one party sends or receives a formal letter before action). Enquiries by regulatory authorities, requests for staff to give witness evidence, third party disclosure orders and other investigative processes may not be considered adversarial, although regulatory proceedings in which judicial powers are being exercised are likely to be considered adversarial for these purposes. A good approach to determining whether proceedings are in prospect is to consider whether there is a legal issue to be determined as between the parties to the relevant process.
If adversarial proceedings are existing or reasonably in prospect, a 'dominant purpose' test will apply to protect as privileged all confidential documents prepared for the dominant purpose of giving or obtaining legal advice with regard to that litigation or aiding the conduct of that litigation. Determining the purpose of a document can be problematic, particularly as the test is one of dominance and not exclusivity. However, the court will assess the purpose of a document on an objective basis.
Litigation privilege has no retrospective effect.
Documents created before adversarial proceedings are reasonably in prospect will not attract litigation privilege (although they may attract legal advice privilege).
Legal advice privilege
If no adversarial proceedings are in contemplation, legal professional privilege will only attach to documents which constitute confidential communications between a lawyer and their client made for the purpose of giving or obtaining legal advice and documents which evidence such communications, including material forming part of the continuum of those communications. Each part of this test requires further explanation.
Communications
To attract legal advice privilege, a document must actually transfer information between a lawyer and their client or be intended for that purpose. A document which is not prepared for the purpose of being placed before a lawyer for the purpose of seeking legal advice or is not addressed and delivered to a lawyer specifically for advice may not constitute a communication. A statement prepared by an employee at the request of a manager to record the employee's recollection of events is unlikely to benefit from legal advice privilege – even if the employee believes that the document will be passed to lawyers for advice – since it is not a communication with a lawyer. The onward transfer of that statement by a client to their lawyer for advice would, however, benefit from legal advice privilege.
Lawyer
Includes all members of the legal profession: solicitors, in-house lawyers, barristers within the UK and duly accredited foreign lawyers (whether foreign in-house counsel who are not required to be a member of their local Bar would still qualify is currently untested). Where appropriate provisions for supervision are in operation, it can also include legal executives, paralegals and trainee solicitors.
A risk may arise in communications with in-house lawyers where the context of the communication relates to commercial rather than legal matters. Where that is the case, privilege will not apply. A further exception applies in relation to in-house lawyers, in that communications between them and their clients will not be protected by privilege in the context of European Commission competition investigations, on the basis that the in-house lawyers are not deemed to be sufficiently independent from their clients in those circumstances.
Client
Not every employee in a company will be the client for the purpose of attracting privilege. The 'client' will only comprise those few individuals who are authorised to obtain legal advice and who seek and receive legal advice from the lawyer, whether external or in-house. This might be an ad hoc committee or group formed to respond to a specific issue or incident, or it might be members of senior management. Often, however, those with direct knowledge of the facts or matters in issue will not fall within the concept of 'client' and particular care will therefore need to be exercised when interviewing or obtaining information from such employees.
Documents created for the purpose of giving or obtaining legal advice
Legal professional privilege only attaches to communications that give or seek legal advice as to what should prudently and sensibly be done in a relevant legal context. This includes advice on how best to present facts in light of legal advice given. In determining whether there is a relevant legal context, consideration should be given to whether the advice relates to 'the rights, liabilities, obligations or remedies of the client either under private law or under public law'. Privilege will not attach to advice which is purely commercial or strategic.
Difficulties arise when determining the status of copy documents and documents which are only privileged in part.
Further difficulties can arise if privilege has been impliedly or expressly waived. These issues are beyond the scope of this brief summary. Expert legal advice should be taken.
Legal professional privilege in the context of criminal investigations
Regulatory investigations in the UK are not automatically considered to be adversarial from the outset and hence litigation privilege may not arise. The result is that legal advice given in the context of such an investigation will attract legal advice privilege, but documents including notes, interview transcripts and / or expert reports for the purpose of giving advice or evidence may not always attract litigation privilege and could therefore be disclosable to a regulator or in subsequent litigation.
Litigation privilege will apply in any case once it is clear that some form of prosecution or litigation arising from the investigation is in reasonable contemplation. Whether prosecution will be in reasonable contemplation is a factual question in each case and does not require a formal criminal investigation to have commenced or a decision to prosecute to have been made. Nor does it require the defendant to have full details of what might emerge in the investigation or complete certainty that proceedings will be initiated. Litigation privilege may also apply at an earlier stage, if the investigation process itself has become sufficiently adversarial so that the company under investigation effectively stands accused of wrongdoing and should, therefore, be able to claim litigation privilege over witness evidence gathered for the purpose of obtaining advice to defend itself.
Legal professional privilege in the context of investigations by the antitrust / competition authority
Distinct from legal professional privilege, Part 9 of the Enterprise Act 2002 ('EA 2002') creates a statutory confidentiality regime covering most competition-related inquiries undertaken by domestic authorities within the UK. This regime can be significant in any litigation following a competition inquiry where disclosure of documents created during the inquiry is sought by a party to the litigation.
The relevant sections of EA 2002 prevent disclosure by any party of documents disclosed to it by an authority in the exercise of its legal functions (without consent from that authority). In practice, this means:
- Documents received from or authored by the authority itself cannot be disclosed
- Documents created by third parties which came to the authority during the investigation and were then disclosed to the company cannot be disclosed (this might include documents from another company subject to the same investigation)
- Documents created by the company under investigation before the investigation and provided to the authority in the course of the investigation may still be disclosed, and
- Whether documents created during the investigation relating to employee interviews and witness statements can be disclosed will depend on the author of the documents in question. If they were created by the company, then they may be disclosed. If they were created by the authority from interviews / transcripts with company witnesses, it is arguable that they will not be disclosable
Are communications with in-house counsel protected by legal professional privilege?
Yes, except in the context of an antitrust and competition investigation by the European Commission.
An in-house lawyer must, however, take particular care to ensure that they distinguish clearly between advice which is legal and that which is commercial in nature, since the latter will not attract legal professional privilege. The in-house lawyer must also take care when instructing external lawyers to clearly identify and effectively manage the relevant lawyer / client relationships.
Does legal professional privilege apply to the correspondence of non-national qualified lawyers?
Yes, where the question of disclosure is governed by the law of England and Wales. Legal professional privilege applies to advice given by all duly accredited members of the legal profession. It is not necessary for the lawyer to be qualified in England and Wales. The question of whether this extends to in-house counsel in European jurisdictions where those counsel are not required to be members of their local Bar and whose advice in their own jurisdictions would not be protected by local professional secrecy laws remains to be determined by the UK courts.
Where the question of disclosure is governed by European law (such as in the context of an antitrust and competition investigation within the UK by the European Commission), only the advice of an independent lawyer qualified within the EEA is protected by legal professional privilege.
How is legal professional privilege waived?
Legal professional privilege is waived if the relevant material is placed before a court. It is also lost if the material in the document loses confidentiality or if the document came into being for the purpose of furthering a criminal or fraudulent scheme. A lawyer has a duty to protect a client’s legal professional privilege and cannot waive it without the client’s express authority.
It is possible to waive legal professional privilege on a selective basis so that disclosure to a third party of a privileged document will not mean that it ceases to be privileged for any other purpose. However, for a waiver to be selective, the terms of the disclosure must be clearly established in advance. This is a complex area. Always seek legal advice.
Legal professional privilege in the context of merger control
It is usual for merging parties to engage in pre-notification discussions with the CMA during which it is the CMA's practice to send the parties detailed questions concerning the transaction. Further questions from the CMA are likely after the formal Merger Notice has been submitted, for example, to respond to information concerning the transaction that the CMA has received from third parties such as customers of the merging parties. Such requests for information supplement the information that the parties are required to submit under the terms of the Merger Notice. Once the filing is made, the CMA has wide statutory powers to require the parties to produce information and documents for the purpose of the investigation (section 109 of the Enterprise Act 2002). However, the parties are not required to disclose legally privileged documents. In the area of merger control (as in other areas of English law), privilege refers to legal advice privilege and litigation privilege discussed above.
