Legal advice privilege covers intra-client communications, High Court confirms

The ‘client team’, for the purposes of legal advice privilege, comprises people whom a business has authorised to seek and receive legal advice on its behalf. The English High Court ruling confirms that legal advice privilege will cover all confidential internal documents which are sent between or created by members of that ‘client team’ for the dominant purpose of seeking legal advice – even if not actually sent to a lawyer nor evidencing the substance of the advice.

Emilie Jones, a commercial litigation expert with Pinsent Masons, said the ruling was an important and useful one which took a sensible and pragmatic view of the authorities and which recognised the fundamental importance of the protection of privilege. She said that the decision provides welcome confirmation to businesses over the extent of legal advice privilege.

“Legal advice privilege, one of the forms of legal professional privilege, is a key protection for businesses,” she explained.

“It enables them to seek and consider legal advice in a candid way, safe in the knowledge that privilege should prevent them from having to disclose the communications in which they do so in the context of any future litigation or regulatory action. “

Legal advice privilege principally applies to communications between a lawyer and their client for the dominant purpose of the giving and receiving of legal advice.  This includes the whole ‘continuum’ of communications between client and lawyer, aimed at keeping both informed so that legal advice may be sought and given as and when needed.

Jones explained that it is already well established that legal advice privilege can apply to certain communications which are not themselves between lawyer and client. 

“For example, it applies to documents evidencing the substance of privileged communications, such as documents passing on privileged legal advice internally within a business,” she said.

“It also applies to communications from client to lawyer which are prepared but not ultimately sent.

“This judgment confirms that communications between members of the ‘client team’ for the dominant purpose of seeking legal advice are another category of documents covered by legal advice privilege.”

The ‘client team’ is an important concept in the context of legal advice privilege for corporate entities.  Under English law, legal advice privilege does not apply to a lawyer’s communications with just any employee of a client business.  Instead, it is restricted to communications with those individuals who are authorised to seek and receive legal advice on behalf of the business on the issue in question. 

Jones explained: “It is therefore common for businesses dealing with a particular legal issue or project to set up a ‘client team’ of key individuals who are authorised in this way, whose confidential communications with the business’s lawyers will then attract legal advice, provided they have as their dominant purpose the obtaining of legal advice.”

In this case, the claimants had argued that legal advice privilege should only cover documents between the members of such a team, described as ‘intra-client’ documents, if they disclosed the substance of privileged communications between members of the client team and a lawyer or were intended to be sent to a lawyer but were not.

But Mr Justice Picken agreed with Glencore’s counter argument – that legal advice privilege should cover any documents made or sent between members of the client team, as long as their dominant purpose was seeking legal advice.

In his ruling, the judge wrote that there was no authority which prevented the assertion of a claim to legal advice privilege where intra-client documents were concerned.  In addition, he said that there was ‘no justification’ for treating intra-client communications, which were “in effect, a client’s working papers” as different to lawyers’ working papers, which it was not disputed were the subject of legal advice privilege.

“They are the mirror image of each other and, as such, should be treated in the same way for legal advice privilege purposes,” he wrote.

“Accordingly, my conclusion is that, as a matter of principle, it cannot be correct that the application of legal advice privilege to intra-client documents is as circumscribed as the Claimants maintain.

“I am clear, on the contrary, that there can be no justification for treating intra-client documents, created as part of the process of seeking legal advice or assistance and/or for which the intention to communicate with the lawyer accounts for the existence of the document, as not attracting legal advice privilege in circumstances where that privilege is available in relation to other documents that are materially similar.”

The judge highlighted certain types of documents which could fall outside the scope of privilege if the claimants’ argument had been accepted, such as a client team member writing themselves a memo with notes for a meeting with their lawyer the day before it takes place, or one member of the client team, who is unable to attend the meeting with the lawyer, emailing another member of the client team with their thoughts ahead of that meeting.

“It is clearly important that the members of a ‘client team’ should be able to communicate freely between themselves in connection with the legal advice sought or received,” said Jones.

“It makes obvious good sense that such communications should be protected by privilege from disclosure, as long as they are for the dominant purpose of the seeking of legal advice. They are part and parcel of the process of candidly and effectively obtaining that advice.

“Notably, the judgment suggests that intra-client communications of this type can be privileged even if they do not disclose the substance of a communication between the 'client team' and the lawyer,” said Jones.

“In practice, intra-client communications will often do so, because they will be discussing the advice being sought, or which has been received. However, it simplifies the protection of privilege if a business wishing to withhold intra-client documents needs only to show that they were for the dominant purpose of seeking legal advice, and does not need to navigate questions about whether the communications sufficiently 'give away' the substance of legal advice.”

However, she warned that with the potential for the decision to be appealed, organisations should still treat their communications with appropriate levels of care.

“While the decision is a welcome one for businesses, it is possible that it will be appealed, or that other courts may take a different view,” she said.

“As ever with sensitive communications, therefore, care should therefore be taken about what is said in any intra-client communications, and it may be safer to involve the lawyer where possible - for example, in the example given above about a 'client team' member not due to attend a meeting with lawyers, it may be preferable for that team member to attend the meeting so that they can pass on their instructions to the lawyer direct. 

“Businesses should also keep in mind that, outside a litigation context, it remains the position that communications between a 'client team' member and colleagues outside that team will not generally attract legal advice privilege.

“This is the case even if the purpose of those communications is to provide information to the lawyers, to inform their advice."

Picken J had previously in the case ruled that the ‘shareholder rule’ – which prevents companies from claiming privilege against its own shareholders – should be treated as no longer existing.