Scottish court clarifies the distinction between confidentiality and legal privilege

Following its ruling on a rare Scottish case on privilege in October, the Inner House has issued a further opinion (3-page / 385KB PDF) in the same case to provide clarity on the limits of client confidentiality in Scotland. The court ruled that if a regulator, such as the Law Society of Scotland or the Scottish Legal Complaints Commission (SLCC), issues a solicitor with a notice under the Legal Profession and Legal Aid (Scotland) Act 2007 (the 2007 Act), the solicitor is relieved from the duty of confidentiality and is obligated to provide information and documents even though they are confidential. There is no need for a court order to override such a duty, but the material sought by the regulator must relate to a complaint that is being investigated.

The latest opinion reinforces the point that legally privileged material has a special status. As a result, the statutory power given by the 2007 Act does not entitle the regulators to obtain material covered by legal profession privilege (LPP) as they investigate a third-party complaint against a solicitor.

“This latest opinion clarifies the position for solicitors and clients alike, highlighting the difference between confidentiality and LPP. Communications can be confidential but not privileged, but they cannot be privileged and not confidential,” said Pinsent Masons’ litigation and regulatory expert Bruce Craig.

“Obligations of confidentiality may be overturned in the public interest, however privilege cannot - except in very limited circumstances such as where there is fraud or where privilege is specifically removed by statute,” he added.

The latest opinion concerns a third-party services complaint relating to work undertaken by two solicitors of a Scottish law firm during divorce proceedings. The complainer is the wife of the client for whom the solicitors had acted. The issue in dispute was whether the SLCC is entitled, under the 2007 Act, to obtain the production and delivery of documents which are covered by LPP.

In October, in the earlier judgment, the Inner House ruled that communications covered by LPP cannot be recovered by the SLCC to investigate a third-party complaint unless the client of the solicitor gives permission.

Although section 17 of the 2007 Act gives the SLCC the power to require practitioners to deliver documents in their possession that relate to a particular complaint, “section 17 notices, and even more so court proceedings, should be exceptional”, according to the court.