Important new Court of Appeal decision on legal advice privilege

The Court of Appeal decision on 28 January 2020 on legal advice privilege will be of significant interest to litigators and non-litigators alike. It will be particularly important for those responsible for disclosure reviews within litigation, and to organisations with in-house lawyers.   Such was the significance of the issues at play that the Law Society sought, and was granted, leave to intervene in the appeal.

Summary

The Court of Appeal’s decision, in Civil Aviation Authority v R (on behalf of the application of Jet2.com Ltd) [2020] EWCA Civ 35, provides welcome clarity on three aspects of legal advice privilege.

First, the Court held that a person claiming legal advice privilege must show that the dominant purpose of the relevant communication was to obtain or give legal advice.

Secondly, the Court provided much needed guidance on the tricky issue of how privilege applies to emails sent to multiple addressees some of whom are lawyers, some not.  The Court held that the dominant purpose test largely provides the answer here: – if the dominant purpose was to obtain legal advice the email is privileged; if it was to obtain commercial views it is not.

The Court confirmed that the same approach should be taken to discussions at meetings attended by lawyers and non-lawyers at which commercial and legal matters are discussed.

Thirdly, the Court confirmed that where what is in issue is the privileged status of an email with attachment(s) it is necessary to consider both separately.  Even if an email is privileged, it does not necessarily follow that the attachment will be.

These issues are discussed in further detail below.  Before turning to them, the facts of the case are summarised as are the key general principles relating to legal advice privilege as helpfully reiterated by the Court of Appeal.

The facts

The underlying dispute comprises judicial review proceedings brought by Jet2 against the CAA.  The dispute centres on the CAA’s decision to leak correspondence between the parties, critical of Jet2, to the Daily Mail.  One of the key allegations is that, in so doing, the CAA acted for an improper purpose.

As part of the proceedings, Jet2 applied for disclosure of all drafts of one of the CAA letters which had been leaked and any documents evidencing discussions of those drafts.  Such documents were said to be necessary to understand the CAA’s purpose behind the leak.

The CAA claimed that such drafts and discussions were privileged as their inhouse lawyers were involved in the discussions and gave advice on the drafts.

The judge at first instance (Morris J) held that legal advice privilege only applied to communications or documents produced for the dominant purpose of seeking or providing legal advice.  On that basis, most of the communications fell to be disclosed.

The CAA appealed to the Court of Appeal.  Hickinbottom LJ gave the only substantive judgment, with which Patten and Peter Jackson LJJ agreed.

Summary of key general principles on legal advice privilege

In order for legal advice privilege to apply there must be (a) a communication (whether written or oral); (b) between a client and a lawyer, or a lawyer and his client; (c) made in confidence; (d) for the purpose of giving or obtaining legal advice: – see Jet2 at [42].

The Court in Jet2 reiterated that:

1. Legal advice privilege can apply to communications with external and in-house lawyers [44].

2. It covers not only a document from the lawyer containing advice and the client’s own written record of advice (whether given in writing or orally). It also covers any communication passing on, considering or applying that advice internally.  It can also attach to the dissemination of advice to third parties.  Equally, legal advice privilege attaches to communications from a lawyer to a third-party containing information provided by the client to the lawyer which is covered by legal advice privilege and which the client has given the lawyer authority to disclose [45].

3. The privilege applies to communications only for the purpose of obtaining or giving legal advice, and not (e.g.) other professional or commercial advice [46].

4. Material collected by a client (or by his lawyer on his behalf) from third parties or independent agents for the purposes of instructing lawyers to give advice is not covered by legal advice privilege.

5. Further, where the relevant client is a corporation, documents or other materials between an employee of that corporation and a co-employee or the corporation’s lawyers, even if required or designed to equip those lawyers to give legal advice to the corporation, do not attract legal advice privilege unless the employee was tasked with seeking and receiving such advice on behalf of the company.  This principle derives from the Court of Appeal decision in Three Rivers Council v The Governor and Company of the Bank of England (No 5) [2003] EWCA Civ 474 (“the Three Rivers principle”).  The Court of Appeal indicated here (as it has previously) that it does not believe that this Three Rivers principle should be the law but that – unless and until the Supreme Court intervenes – it is [47], [57] & [58].

6. Consideration of legal advice privilege must be undertaken on the basis of particular documents, and not simply the brief or role of the relevant lawyer. Even where the dominant purpose of the retainer is to obtain legal advice, it is still necessary to consider whether individual communications were given for the requisite purpose.  If not, they are not privileged [67] & [69].

7. However, where that brief or role of the lawyer is qua lawyer, most communications to and from the client are likely to be sent in a legal context and be privileged. This is because legal advice includes advice on the application of the law and the consideration of circumstances from a legal point of view.  Once such a legal context is established, legal advice privilege applies not just to those communications which expressly seek or give advice but also to the continuum of communications between a lawyer and client aimed at keeping both informed so that advice may be sought and given as required  [68] – [69].

8. Similarly, where the usual brief or role of the lawyer on the particular facts is not qua lawyer but (e.g.) as a commercial person, a particular document may still be privileged if it is specifically in a legal context and therefore, again, falls outside the usual brief or role [69].

Dominant purpose test?

A key question which arose in Jet2 was whether the person claiming privilege must show that the dominant purpose of a communication was to obtain or give legal advice, or whether (for example) it was sufficient merely for that to be a purpose of the communication.

The CAA and the Law Society sought to argue that there was no dominant purpose requirement.

It has long been recognised that litigation privilege includes a dominant purpose requirement.   Hence where a document has been produced in part for the purpose of pursuing litigation, but that is not the dominant reason, litigation privilege does not apply.

The question of whether the same applies to legal advice privilege had, however, been the subject of conflicting statements in the authorities.

Indeed, whilst several authorities suggested that a dominant purpose test did apply, in the most recent Court of Appeal discussion on the topic (in 2018) the unanimous Court had expressed the view (obiter) that there was no such requirement (Director of the Serious Fraud Office v Eurasian Natural Resources Corporation Limited [2018] EWCA Civ 2006 at [131] – [132]).

In Jet2, the Court of Appeal rejected this part of the judgment in Eurasian.   The Court confirmed that there is indeed a dominant purpose requirement:

“[96] …for legal advice privilege to apply to a particular communication or document, the proponent of the privilege must show that the dominant purpose of that communication or document was to obtain or give legal advice”.

In doing so, it noted that this requirement was also imposed in several other common law jurisdictions (including Australia, Singapore and Hong Kong) [95].

Legal advice privilege and multiple-addressee communications / meetings attended by lawyers and non-lawyers

An issue which frequently arises on a disclosure review is how to deal with emails which have been sent to multiple addressees, some lawyers and some not.

The same issue can be seen to arise in relation to meetings attended by lawyers and non-lawyers at which commercial matters are discussed, with the lawyer adding legal advice and input where required.

This is an issue on which, prior to Jet2, there had been no authoritative guidance.

The issue arose squarely in Jet2 as most of the documents in question were emails which had been sent within the CAA to one or more in-house lawyers and one or more non-lawyers.

The question of whether there was a dominant purpose requirement arose in large part because of its significance to such emails.

The Court held (at [100]) that the following principles applied:

1.   Although the general role of the relevant lawyer may be a useful starting point (and may, in many cases, in practice be determinative), the dominant purpose test focuses on documents and other communications and must be applied to each of the same.

2. In respect of a single, multi-addressee email sent simultaneously to various individuals for their advice/comments, including a lawyer for his input, the purpose(s) of the communication need to be identified. In this exercise, the wide scope of “legal advice” (including the giving of advice in a commercial context through a lawyer’s eyes) and the concept of “continuum of communications” must be taken fully into account.  If the dominant purpose of the communication is, in substance, to settle the instructions to the lawyer then, subject to the Three Rivers principle (see paragraph 5 under general principles above), that communication will be covered by legal advice privilege. That will be so even if that communication is sent to the lawyer himself or herself, by way of information; or if it is part of a rolling series of communications with the dominant purpose of instructing the lawyer.  However, if the dominant purpose is to obtain the commercial views of the non-lawyer addressees, then it will not be privileged, even if a subsidiary purpose is simultaneously to obtain legal advice from the lawyer addressee(s).
3. The response from the lawyer, if it contains legal advice, will almost certainly be privileged, even if it is copied to more than one addressee. Again, whilst the dominant purpose test applies, given the wide scope of “legal advice” and “continuum of communications”, the court will be extremely reluctant to engage in the exercise of determining whether, in respect of a specific document or communication, the dominant purpose was the provision of legal (rather than non-legal) advice.
4. A multi-addressee communication is probably best considered as a separate bilateral communication between the sender and each recipient rather than simply as a single communication. Where the purpose of the sender is simultaneously to obtain from various individuals both legal advice and non-legal advice, it is difficult to see why the form of the request (in a single, multi-addressee email on the one hand, or in separate emails on the other) in itself should be relevant as to whether the communications to the non-lawyers should be privileged.
5. It may be beneficial to consider whether, if such an email were sent to the lawyer alone, it would have been privileged. If no, then the question of whether any of the other emails are privileged hardly arises. If yes, then the question arises as to whether any of the emails to the non-lawyers are privileged, because (e.g.) its dominant purpose is to obtain instructions or disseminate legal advice.
6. Where there is a realistic possibility that a communication might disclose legal advice, that communication will in any event be privileged.
7. The same principles apply to discussions at meetings (and records of meetings) between non-lawyers and lawyers at which commercial matters are discussed with lawyers adding legal advice and input when required. It is not correct that the whole of such meetings will be covered by legal advice privilege.  Legal advice requested and given at such a meeting would be privileged; but the mere presence of a lawyer is insufficient to render the whole meeting privileged so that none of its contents (including any notes, minutes or record of the meeting) are disclosable.  If the dominant purpose of the meeting is to obtain legal advice (or, subject to the Three Rivers principle (above), to settle instructions to a lawyer), unless anything is said outside that legal context, the contents of the meeting will be privileged.  If the dominant purpose of the discussions is commercial or otherwise non-legal, then the meeting and its contents will not generally be privileged; although any legal advice sought or given within the meeting may be.

Need for separate consideration of email and attachments

The Court of Appeal also addressed the question of whether attachments to emails need to be given separate consideration for privilege purposes.

The CAA argued that no such separate consideration was necessary: – if an email was privileged then the attachment(s) would be too as they should simply be viewed as one communication.

The Court of Appeal disagreed.  It noted that it is well-established that a document which is not privileged does not become so simply because it is sent to lawyers, even as part of a request for legal advice.  In giving disclosure, it is therefore necessary to give separate consideration of substantive documents and attachments [107].

Concluding comments

The Court of Appeal’s decision helpfully draws together many threads from the authorities.  It provides useful direction on several important issues which frequently arise in practice and where authoritative guidance has been lacking.

At the same time, the decision appears likely to increase the burden on those tasked with determining whether documents fall to be disclosed within the litigation process.

The guidelines will not be as simple to apply for the Court (or document reviewers) as if, for example, the Court had held that privilege applied if a purpose of the communication was to obtain legal advice. Most emails in the corporate context are multi-addressee and so consideration will have to be given to the position of lawyer and non-lawyer recipients.  Emails and attachments must be considered separately.  This will only serve to increase the costs of what is already one of the most expensive stages of litigation.

The decision makes it more difficult for a party to withhold inspection of documents.  Hence where there are relevant discussions, perhaps particularly where in-house lawyers have been involved in contested transactions, the opposing party and the Court will have a much fuller picture of what was happening internally than they otherwise would.   This is more likely to lead to a fairer outcome.

David Lascelles specialises in litigation arising from high-value commercial contracts, the sale of shares and businesses, shareholder and LLP membership, commercial fraud, and director and senior employee relations.  He heads Littleton’s company law group and is its Commercial Bar Association representative.  David has been recognised for many years by both Chambers & Partners and Legal 500 independent guides to the legal professions as one of the UK’s leading barristers in both commercial and company law litigation.  He is 1 of only 6 juniors barristers in the UK to be recommended in both fields in the 2020 edition of both independent guides.