Privilege under English law
07 February 2024
07 February 2024
This guide provides an overview of the principles governing the ability of a party to keep communications with its lawyer confidential under the English law of privilege. It reviews the main heads of privilege which can be claimed, how privilege can be lost, and how to ensure that communications that are privileged, stay privileged.
The concept of privilege is a fundamental human right long recognised by English common law. The rationale is that a client should be able to consult a lawyer in confidence without fear of later having to disclose communications between them.
Privilege is especially important because it entitles a party to withhold documents from the other side in the context of litigation, or other adversarial proceedings. It can also be used to deny regulators and enforcement agencies access to documents. Whether or not a document is privileged will always depend on the facts.
Legal professional privilege has two manifestations: legal advice privilege and litigation privilege. Although different in scope, the basic principles are the same.
Legal advice privilege is designed to protect the confidentiality of the lawyer/client relationship and applies to:
The leading judgments on legal advice privilege were delivered by the Court of Appeal and the House of Lords in the Three Rivers litigation.1
Privilege can only be claimed if the communication in question is confidential. If it ceases to be confidential, it is no longer privileged. However, not all confidential documents are privileged.
"Communications" are widely construed to include actual lawyer/client communications (e.g. phone calls, face-to-face discussions, letters, emails, faxes) and evidence of such communications (e.g. file notes of phone calls).
The definition includes all members of the legal profession, including barristers, solicitors and trainee solicitors. Communications with non-lawyers advising on legal affairs only enjoy privilege in limited circumstances.2
The definition also includes in-house lawyers to the extent that they are providing legal advice, except for where they are providing:
Note: as a matter of EU law, in-house lawyers are not regarded as being sufficiently independent from their employer.
In the case of individuals, the client is the individual instructing the lawyer.
However, difficulties can arise when the legal advice is being given to a corporate entity. In Three Rivers, the Court of Appeal defined the "client" restrictively. Despite being heavily criticised and fact specific, the courts have applied the narrow interpretation in a corporate context.4 As such, and until the Supreme Court revisits the decision, it should be assumed that the "client" comprises only those employees of an organisation authorised to seek and obtain legal advice on behalf of a corporate.
Consequently, the following will fall outside the definition of "client":
It therefore follows that, unless litigation privilege applies, any documents produced by those employees and sent direct to lawyers will not be privileged, even if they are necessary to provide information to the lawyers to obtain legal advice.
Likewise, any discussions with or interviews of those employees by lawyers will not be privileged, or verbatim note, transcript, or recording of those discussions/interviews. Any non-verbatim interview notes produced by lawyers will not be privileged unless it can be shown that they betray the trend of legal advice being given to the client. The fact that the note is not a verbatim note, is selective/a summary, or includes the lawyers' "mental impressions", will not of itself be sufficient to pass that test.6
Careful thought will always need to be given to this issue, particularly in the context of internal investigations.
In Three Rivers, the House of Lords confirmed that "legal advice" is not confined to telling the client the law, but includes advice "as to what should prudently and sensibly be done in the relevant legal context".7 Lord Rodger used a simple but useful test to determine whether the lawyer was providing such advice: had the lawyer "put on legal spectacles when reading, considering and commenting on the drafts"?8
The courts will also apply a dominant purpose test when considering whether the purpose of a communication was to give or obtain legal advice. This is more relevant to in house lawyers as they will often act in both a legal and commercial capacity. If the lawyer is predominantly acting as the client's commercial (as opposed to legal) adviser, the advice is unlikely to meet the dominant purpose test and will not be privileged.
Litigation privilege allows a litigant to prepare for litigation without fear that any documents produced for that purpose will subsequently have to be disclosed.
It is wider in scope than legal advice privilege and covers communications between the client or their lawyers and third parties for the purpose of obtaining information or advice in connection with the litigation provided that, at the time the communication was made:
Litigation privilege can normally be claimed in proceedings where judicial functions are exercised by the court or tribunal, e.g. proceedings in the High Court, county court, employment tribunal, and English seated arbitration.
The test is more difficult to apply in other types of proceedings. The relevant proceedings need to be adversarial rather than investigative or inquisitorial.11 Where proceedings are fact-gathering (e.g. a Banking Act inquiry, public inquiries or statutory investigations) or before administrative tribunals, generally litigation privilege cannot be claimed.
The courts have found that litigation privilege can apply in an investigations context, for example:
In order for litigation to be reasonably in prospect or contemplated, there must be a real likelihood rather than a mere possibility of adversarial legal proceedings commencing (this does not need to be greater than 50 per cent).16 Mere apprehension of what might happen is not enough. However, it does not matter if the particular litigation (or indeed any litigation) never in fact commences.
The point at which the line is crossed between litigation being a mere possibility and contemplated will not always be clear. The court will look to all the circumstances to determine the question.17
Unlike legal advice privilege, litigation privilege attaches to communications with third parties. Therefore, the concerns outlined above in the discussion of legal advice privilege relating to the identity of the "client" do not arise.
Provided that the sole or dominant purpose for which the communication is created is the conduct of the litigation or contemplated litigation, it will come within the scope of litigation privilege. The court will look at the purpose of the document objectively, taking into account all the circumstances.18 The cases illustrate the fact-sensitive nature of any decision on privilege.19
Internal communications, e.g. board minutes, will only be covered by litigation privilege if they satisfy the test as set out above. As such, caution should be exercised whenever litigating parties internally discuss contemplated or ongoing proceedings. Documents that do not fall within the scope of litigation privilege may have to be disclosed.20
Joint privilege arises where more than one party retains the same solicitor to advise them (and therefore the two parties have a joint retainer) or where they have a joint interest in the subject matter of a privileged communication.
It will be a question of fact whether a solicitor is acting under a joint retainer. The test for whether a joint interest exists is whether the parties could have instructed the same solicitor. Relationships where a joint interest can arise include: beneficiaries and trustees; a company and its shareholders; partners in a firm; and parent company and its subsidiaries.
Case law regarding common interest privilege is inconsistent and is still developing.
The key point to note is that common interest privilege enables the sharing of privileged documents with others with the same interest. Privilege will not be lost where privileged communications are passed to a person with a recognised common interest.
However, unlike joint interest, the right to waive privilege is exclusively that of the party who originally enjoyed the privilege and is not shared by the person to whom the communication is disclosed. As such, only that person can waive privilege in the document; the consent of those sharing a common interest is not required.
Historically, the test for establishing a common interest has been high. The leading case on common interest privilege is Buttes Gas and Oil Co -v- Hammer (No. 3),21 which states that the court will treat parties with a common interest "as if they were partners in a single firm"22.
While there is still limited authority on this point, more recent judgments appear to indicate that the boundaries of the concept are widening.23 Parties may establish a common interest despite having differing views or divergent interests. Examples of persons who may have a common interest include companies in the same group, insurer and insured, agent and principal or neighbours with the same complaint.
In practice it is prudent for parties to document the extent of the common interest before sharing privileged material.
As with joint interest privilege, if the parties subsequently fall out and sue one another, neither can claim privilege against the other for documents that were disclosed pursuant to the common interest privilege.
The without prejudice rule exists to encourage disputing parties to reach a settlement by allowing them and their legal advisers to speak freely and make concessions knowing that the communications cannot be disclosed later in court if the negotiations fail to achieve settlement.
The protection is not absolute and there are exceptions. This is covered in more detail in the Ashurst Quickguide: Without Prejudice.
The rule of privilege against self-incrimination states that no person is bound to answer any question, or release any document, in civil proceedings, if the answer or document would have a tendency to expose him or his spouse/civil partner to any criminal charge or penalty under the law.24
The test is whether the relevant criminal charge or penalty is reasonably likely to be pursued, and whether the answer would have a tendency to incriminate the accused or his spouse/civil partner. There must be a "real and appreciable" danger of incrimination rather than a "mere possibility" for the privilege to apply.25
The person at risk of incrimination can claim the privilege.26 The privilege can also be claimed by a spouse or civil partner of the person at risk of incrimination, and a company/undertaking. The courts have left open whether directors, employees or agents of a company can invoke the privilege where their answers would tend to incriminate the company.27
The privilege can be claimed when refusing to produce documents or information, before or at trial. It is particularly relevant where disclosure orders are sought as part of interim emergency applications, e.g. search orders and freezing injunctions where the respondent has limited opportunity to take legal advice.28
It can also be claimed in civil competition investigations by the Competition and Markets Authority or European Commission.29 The privilege will not, however, apply to independent/incidental material found during the course of the exercise of legal process, as opposed to material required to be produced directly pursuant to it.30 A prolonged failure to claim the privilege runs the risk of it being lost.31
The general rule is "once privileged, always privileged". This means that once a communication becomes privileged, the party to whom the privilege belongs may continue to claim privilege over that communication albeit in different circumstances. This right continues indefinitely, unless the privilege is lost or waived.
Privilege can be lost inadvertently or be waived by the holder of the privilege. Once privilege has been lost or waived, it cannot be reclaimed. It is therefore important to take care to maintain privilege.
As noted above, privilege only attaches to confidential communications. If a document is circulated widely, or is made publicly available, privilege may be lost.
The following are examples of circumstances in which privilege will be lost:
In these circumstances, the document enters the public domain and privilege in the document is lost (unless included by obvious mistake – see mistaken disclosure below).
However, if a document is disclosed to a third party then, while a claim to privilege cannot be maintained as against that party, it does not necessarily mean that a claim to privilege is lost as against the rest of the world. The key question is "whether the document and its information remain confidential in the sense that it is not properly available for use".33 Therefore, if a privileged communication is disclosed to a third party for a limited purpose and on strict terms as to confidentiality, it may be possible to maintain a claim to privilege in that document. This is known as a limited waiver of privilege.34
A party may choose to waive privilege in a document or part of a document which is helpful to its case. However, this can be risky as, if the party relies on the document in support of its case, it can result in the party having to disclose other privileged documents or the whole document.
The general rule is that where privilege is waived in respect of one document in a set of documents (or one part of a document), then the class of documents (or rest of the document) will have to be disclosed unless the document (or part of the document) disclosed deals with an entirely different issue or subject matter.35 This is to prevent parties unfairly indulging in selective disclosure or "cherry picking" among the privileged material.
Privilege can also be waived by reference to the contents of legal advice in witness evidence, opening submissions and expert reports. In PCP v Barclays Bank Plc the claimant was entitled to further disclosure on the basis that Barclays had waived privilege as a result of their reference to legal advice in witness evidence and opening submissions.36 And in Pickett v Balkind, an inadvertent waiver of privilege was held to include the disclosure of otherwise privileged communications with the claimant's own expert.37
Where a document is obtained by the other party by improper means or through an obvious mistake, the court may prevent use of the document.
Where privileged documents have been obtained by the other side by improper means, the court will usually grant an injunction preventing the use of the documents.
Where a party mistakenly allows a privileged document to be inspected, the court will examine whether it was obvious that the disclosure was mistaken in deciding whether to allow the recipient to use the document.38 If it was either obvious to the recipient, or would have been obvious to a reasonable solicitor in the same circumstances, the court will prevent use of the document. The courts have sometimes gone further and granted an injunction barring the solicitors who received the privileged documents from acting, on the basis that they would be unable to put the contents of the documents out of their minds.
An inadvertent disclosure of privileged material will not automatically give rise to a wider waiver of privilege unless the disclosing party seeks to rely on the contents of that privileged material.39
Both legal advice privilege and litigation privilege may be lost if the communication or document in question was created for the purpose of furthering a criminal or fraudulent purpose.40
There are a number of practical steps that may be taken to preserve privilege.
If advice is circulated, forwarded or repeated by the client internally and any additional comment is added, the additional comment may not be privileged.
Although not determinative of a document's privileged status, this will:
No. A company can only act through its directors and disclosure to them is not treated separately from disclosure to the company itself. Equally, the involvement of a third party, for example the company secretary, in collating the advice for circulation to the board will not affect the privileged status of the advice. However, any additions made to the advice by that third party may not be privileged and should therefore be avoided. If comments are made, they should always be separate from the advice itself.
Care should be taken with board minutes. A board minute solely summarising or attaching a copy of legal advice received will be privileged. However, if the board minutes record discussions which go beyond repeating the legal advice then those minutes (or at least that part of those minutes) may not be privileged, e.g. commercial discussions will not be privileged.
Caution should always be exercised when recording discussions of legal advice, and circulating/copying board minutes which record privileged discussions or attach/summarise legal advice to anyone who does not need to see them for the purpose of acting on the advice.
Sharing privileged information is risky as it can give rise to claims that privilege has been waived. However, it is possible to disclose privileged communications to a third party without losing privilege as against the rest of the world if the communication is provided for a limited purpose and on a confidential basis (also known as a "restricted" or "limited" waiver of privilege).41
In order to reduce the risk of loss of privilege, before any privileged communication is sent to a third party, that third party should be asked to acknowledge that it is sent to them on the following basis:
It is helpful to require that the communication be destroyed or returned to the disclosing party once the matter is concluded.
Yes. In addition, it may also be possible to argue that the companies share a joint or common interest (see above) and that privilege in the document is therefore maintained on that basis. However, the safest course is to provide the advice under terms as to confidentiality in case no joint or common interest is found to exist.
Generally, provided the requirements of legal advice privilege are met (see above), legal advice provided by in-house counsel to other companies within the group should be privileged.
In those circumstances, each of the subsidiaries or group companies receiving the advice should be regarded as the "client" for the purposes of any legal advice privilege that can be claimed. Ideally. the in-house lawyer's employment contract should record the fact that the in-house lawyer is employed to advise both the parent and any other companies in the group.
Companies should always think carefully regarding their privilege strategy in any internal or regulatory investigation. To what extent do they want to claim privilege over certain documents? If they do want to be able to claim privilege then the following issues will need to be considered:
If litigation privilege does not apply, and the employees are not within the "client" group, then interviews will not be privileged. In these circumstances, the options include:
It is important to understand how privilege laws differ across jurisdictions.
The English courts will apply English law to issues of privilege irrespective of where any communications took place.
Foreign courts have their own rules on privilege and disclosure. Documents that are privileged under English law will not necessarily be privileged in a foreign court/cross border investigations. If you are party to foreign proceedings and are ordered to disclose documents, it will be no defence in those proceedings to argue that they are privileged as a matter of English law.
However, if a request is made by a foreign court for documents in England (for example where a third party is asked to disclose documents), the recipient of the request will be entitled to claim privilege under English law.42
Data rooms are often made available to third parties, for example, potential purchasers of a company. As discussed above, it is possible to disclose voluntarily privileged documents on a restricted basis.
However, data rooms are likely to hold commercially sensitive information in addition to privileged documents. Therefore, it is preferable to permit the other party to inspect the documents only after they have entered into an appropriate confidentiality undertaking. Any notes taken by the other party will not be privileged.
Unless statute provides an exception, disclosure to a regulator can be withheld on grounds of privilege.43 In exceptional circumstances it may be in a party's best interests to disclose voluntarily privileged documents to a regulator. In order to reduce the risk of disclosure leading to a general waiver of privilege, the communication should be provided on an agreed and documented understanding that:
This should help to ensure that privilege is not waived against anyone apart from the regulator although this cannot be guaranteed. Also note that in certain jurisdictions, e.g. the US, this concept of limited waiver may not be recognised.
|Heads of privilege
Legal advice privilege
Third party communications excluded.
Broad definition of "legal advice" includes advice as to what should prudently and sensibly be done in the relevant legal context.
Post Three Rivers (No. 5), an issue remains as to who is the client.
Wider in scope than legal advice privilege and covers communications with third parties.
Covers all adversarial proceedings but does not currently extend to fact finding investigations, e.g. regulatory investigations.
Mere apprehension of possible litigation is insufficient; litigation must be "reasonably in prospect".
Privilege belongs to all parties.
All parties must concur in waiving the privilege.
Common interest privilege
Communications between parties who share a "common interest".
May include group companies, insured and insurer and agent and principal.
May apply even if they have different views and divergent interests.
Privilege against self-incrimination
Documents or oral statements that would have a tendency to expose a person to a criminal charge or penalty.
Must be a real and appreciable danger of incrimination as opposed to a mere possibility.
Can be claimed only in civil proceedings, e.g. civil litigation and civil competition investigations by the Competition and Markets Authority or European Commission.
The information provided is not intended to be a comprehensive review of all developments in the law and practice, or to cover all aspects of those referred to.
Readers should take legal advice before applying it to specific issues or transactions.