Out-Law News | 04 Feb 2020 | 5:49 pm | 4 min. read
Airline Jet2 has sought disclosure of correspondence connected with a CAA press release and public letter critical of the airline's stance on a new alternative dispute resolution (ADR) scheme for passenger complaints. The CAA claimed that it did not have to disclose as it had copied in its in-house lawyers, and claimed that legal advice privilege applied. Last year, the High Court ruled that the correspondence was not privileged, as its dominant purpose was commercial rather than legal in nature.
The Court of Appeal has now dismissed an appeal by the CAA, and upheld the High Court's judgment. It ruled that, although previous cases had disagreed on the point, there was "[no] good ground for not following the preponderance of authority which supports the inclusion of a dominant purpose criterion into [legal advice privilege]".
Lord Justice Hickinbottom, giving the judgment of the court, said that there was no good reason to treat legal advice privilege any differently to litigation privilege for the purposes of a 'dominant purpose' test. Litigation privilege applies to confidential communications and documents that have been prepared for the dominant purpose of conducting adversarial litigation which is in progress or in contemplation, while legal advice privilege generally attaches to confidential communications between lawyers and their clients which relate to the provision of legal advice.
The judge said: "Although they do have some different characteristics, litigation privilege and [legal advice privilege] are limbs of the same privilege, legal professional privilege. It is uncontroversial that the dominant purpose test ... applies to litigation privilege".
"In my view, there is no compelling rationale for differentiating between limbs of the privilege in this context. The 'dominant purpose' test in litigation privilege … derives from Australian jurisprudence, which has since [the 1976 Australian case of Grant v Downs] treated the purpose test (whatever it might be) as applying to both limbs of the privilege," he said.
No party can just assume that a claim for privilege will suffice and should now really expect challenges to any claims to privilege over documents, especially from regulators.
Commercial litigation expert Alan Sheeley of Pinsent Masons, the law firm behind Out-Law, said that challenges to both legal advice privilege and litigation privilege by opponents were becoming increasingly common.
"No party can just assume that a claim for privilege will suffice and should now really expect challenges to any claims to privilege over documents, especially from regulators," he said.
"In-house lawyers must make sure they know what 'hat' they are wearing: if only providing commercial advice then no privilege will exist; if providing legal advice then privilege may exist. In-house counsel must take real care when advising the business and have separate legal and commercial communications to ensure that there can be no valid challenge to privilege at a later date. In many organisations, more training is needed for those in the business to ensure they understand the importance of privilege and protect their in-house lawyers' communications," he said.
Commercial litigation expert Michael Reading of Pinsent Masons said that the case "provides welcome clarification". In 2018, a different panel of judges in the Court of Appeal suggested that the dominant purpose test did not apply to legal advice privilege, as part of its judgment in the SFO v ENRC case.
"The Court of Appeal's reasoning for its decision in this case is sound," said Reading. "First, it refers to a raft of persuasive authorities where it is clear that the court considered that the dominant purpose test applied to legal advice privilege - albeit that none directly addressed this point. Second, there was no compelling rationale for differentiating between the tests for legal advice and litigation privilege."
"Finally, the Court of Appeal concluded that it was appropriate for English common law to fall in line with the common law of other jurisdictions - for example Australia, Singapore and Hong Kong - which already applied the dominant purpose test to legal advice privilege and demonstrated that such a test works in practice," he said.
Practical steps that will assist a practitioner in preserving legal advice privilege include training those in the business who need to seek legal advice to take care about what information they write down; and splitting out legal advice from commercial advice.
The Court of Appeal also backed the lower court on the treatment of 'multi-addressee' emails, where some of the recipients were in-house lawyers acting in a legal capacity but others were not lawyers.
Lord Justice Hickenbottom said: "Where there is a multi-addressee email seeking both legal advice and non-legal (e.g. commercial) advice or input, if regarded as separate communications, those to and from the lawyer will be privileged: otherwise, they will not be privileged, unless the real (dominant) purpose of a specific email to/from non-lawyers is that of instructing the lawyer. If it is not for that purpose, in most cases, the email as a whole will clearly not have the dominant purpose of obtaining legal advice".
"I agree with [the High Court judge] that, where a communication might realistically disclose legal advice (in the sense of there being a realistic possibility of it disclosing such advice) then that communication will in any event be privileged … However, in respect of the relevant documents in this case, on the basis of that test, as I understand it, [the CAA] appears to have considered that none would or might disclose such advice," he said.
Commercial litigation expert Michael Reading said: "The reality of being a modern in-house lawyer is that the business often asks (usually by email) the in-house lawyer to advise on legal and non-legal matters at the same time".
"The court confirmed that it expected practitioners to take 'proper care' when dealing with matters where they might want to take advantage of legal advice privilege. This is a sage warning and in-house lawyers should therefore be cautious when dealing with queries that intermingle legal and commercial matters," he said.
"Practical steps that will assist a practitioner in preserving legal advice privilege include training those in the business who need to seek legal advice to take care about what information they write down; and splitting out legal advice from commercial advice. If an in-house lawyer is concerned about the status of its communications in sensitive matters, they should seek advice from lawyers with specialist experience of privilege issues," he said.
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