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(2) Legal Professional Privilege
Should privilege be a rule of immunity and inadmissibility?
To which relationships should privilege apply?
Should privilege apply to corporate clients? If so, to what extent?
Parameters of Legal Professional Privilege: Lord Carswell — Three Rivers (No 6)
Requirements for litigation privilege: communications between parties or solicitors and third parties for purpose of obtaining information or advice in connection with existing or contemplated litigation are privileged when the following conditions are satisfied:
- (a) litigation in progress or contemplation; (b) communications made for sole or dominant purpose of conducting litigation; AND (c) litigation adversarial, not investigative
Requirements for legal advice privilege (citing Balabel v Air India): purpose and scope of privilege is to enable legal advice to be sought and given in confidence — thus, test is whether communication or document was made confidentially for purposes of legal advice — purposes construed broadly
- Communications with third parties not protected (even when made in connection with obtaining legal advice) except where third party is client's agent
- Applies to documents prepared by client, if dominant purpose was receiving legal advice (ie. brought into existence of that purpose), even if never communicated to lawyer.
- Applies to documents even if they contain other kinds of opinion/record matters not strictly legal, provided lawyer engaged in what is normally considered to be the provision of legal services — Balabel v Air India: privilege attaches "to what should prudently and sensibly be done in the relevant legal context"
GENERAL NOTES (Higgins and Zuckerman)
Legal privilege confers absolute immunity from disclosure, even where information sought is relevant to an issue before a court — rule of compellability, not admissibility
- In relation to admissibility: Possible remedy in equity but discretionary (equitable injunction restraining use of documents)
Rationale for Protection: Scope of protected communications defined by reference to purpose of communications [see box above]
- (A) Legal Advice privilege founded on rule of law considerations:
o Law accords rights and imposes obligations, which are enjoyed only if persons aware of and understand them — system of rights/obligations requires knowledge
Since advice of lawyers is principal mean by which to gain necessary knowledge, access to legal advice must be encouraged and protected
Essential condition of meaningful access: client must be able to put all facts before lawyer without fear of disclosure (used to prejudice) ( R v
o LPP underpins a vital element of rule of law — "fundamental condition on which administration of justice as a whole rests"
- (B) Litigation privilege required by the right to a fair trial
Recognises special needs that litigation creates —beyond immediate client-lawyer communications and applies to communications with non-parties
1 Basic requirement of fairness in adversarial process that litigants able to prepare case confident that others will not be allowed to invade sphere of preparation
closely bounded up with right to a fair trial, including: access to court; equality of arms; and adequate facilities for preparation of defence
Note: Common basis for LAP/LP: founded on empirical assumption: without protection, clients not able to effectively communicate with lawyers/adequately prepare litigation
Core rationale: entitlement to private/secure sphere TO conduct communications for purpose of obtaining legal advice or preparing litigation Without this:
(a) citizens will lack meaningful means of ascertaining what the law is and what their rights and obligations are
(b) parties to legal proceedings will be denied adequate opportunity to prepare for litigation oZUCKERMAN ARGUMENT: Privilege should be rule of immunity and inadmissibility
- (1) As presently understood, LPP provides insufficient protection — primarily a rule of immunity from compulsory disclosure — two key implications:
o (a) Client may waive immunity and disclose privilege communications
(b) Privilege communications otherwise admissible (ie if communications accidentally/otherwise come to light other than by compulsory legal process)
- (2) HOWEVER: Underlying rationale supports inadmissibility (ie communication should not be used to client's detriment)
o Morgan Grenfell: concern about inhibited communication not that it may be disclosed but that it may then be used to client's detriment
If law protects information from disclosure, unfair to allow client's statements made under such conditions to be used as evidence against client
- (3) Accepting inadmissibility aspect of LPP would resolve various difficulties including:
o (i) Accidental disclosure — individual not at mercy of court's discretion (whether or not opponent would be allowed to use it)
o (ii) Waiver — party who has shown a privileged document for a specific purpose will not have to fear that by doing so he has forgone privilege completely
- (4) Inadequacies of "middle-ground" approach — apply injunction requiring return and restraining use of documents (Ashburton v Pape)
o HOWEVER: Depends on whether owner of privilege was sufficiently aware and in possession of necessary means to seek injunction
To avoid need for injunction application, CPR 31.20: need for court permission when party seeks to rely on privileged document disclosed inadvertently
HOWEVER: only applies where inadvertently allowed inspection in course of disclosure; and says nothing about how court should decide
Solution: Scott VC in Webster v James Chapman:
No absolute right to injunction — court discretionary jurisdiction to restrain breach of confidence
Court to balance legitimate interests of both parties, considering: circumstances in which information came to defendant, issues in action,
significance of document, privileged nature
Zuckerman: sound basis for approaching problem if accepted that Court's discretion is not open-ended (ie. categories of documents that court should never permit to be used as evidence against client)
o eg: privileged communications should never be admissible against client as admission or evidence of truth of matters told to the lawyer
Relationships to which privilege applies: Noting that aim to create secure sphere in which legal advice may be obtained without inhibition, privilege must follow legal advice
- Zuckerman: should protect all communication for purpose of obtaining legal advice, regardless of whether person giving advice is a lawyer
Recognised in Prudential: Lord Neuberger: "as a matter of pure logic" no reason that privilege should be restricted to legal advisers as opposed to other professionals with a qualification or experience to give expert legal advice in a particular field
- Consider move from status-driven to purpose/function-driven approach:
o To what extent does the value of the advice affect our belief/views about the privilege (ie. tied to competency/independence of the advice given)?
o Impact and indication of the Legal Services Act 2007 (multi-disciplinary partnerships — extends privilege if lawyer overseeing.
2 Application to CORPORATE clients
- Important: Debate regarding justification for according corporations any LPP settled in England in favour of corporate privilege
HOWEVER: Serious questions about extent to which corporations can claim privilege for internal communications made for the purpose of obtaining legal advice
operation of privilege in the corporate arena deeply problematic.
- Three Rivers (No 5) (rejection of privilege over communications prepared by ordinary employees): not all employees necessarily part of corporate client
Criticised for creating artificial delineation between employees who are "client" and those who are not — since company can learn facts concerning affairs/communicate with lawyers only through employees, all communications within that process should be privileged
Attraction of simplicity and certainty HOWEVER: Creates potential for pulling "blanket of privilege" over ever-increasing range of documents
If any internal documentation produced for dominant purpose of being presented to lawyers for legal advice privileged, companies able to create a "paper trail" leading to corporate lawyer's door — would shield much of internal activities bring administration of justice into disreputeTo find solution, must consider rationale of LAP — within rationale, always asking two questions:
o (1) Normative: emphasising relationship between individual and State — does the need for fair balance apply equally between individual and corporation?
Caltex case: "reject without hesitation" claim that need for fair balance applies equally between individual-State and corporation-State
(2) Empirical: [In circumstances where the normative rationale does not apply, the case of privilege must be empirically based]
o Fundamental rationale: facilitate access law so that citizens may be guided—empirical assumption: absent privilege, clients deterred from making full disclosure
(i) incentive to "control group" (ie. those authorised to seek/obtain legal advice on behalf of company) to order investigations (ie order employees to talk)
(ii) encourages employees to be candid in communications (to disclose)
HOWEVER: Assumption "far from self-evidently sound when it comes to corporations":
(a) Corporate activities involve larger amounts of money, greater potential liability, and wider range of legal aspects — Directors who proceed on mistaken assumptions about legal position risk criminal / civil liability corporations do not need "additional inducements" to make full disclosure
(b) Director's duty to manage company's affairs with reasonable care, skill and diligence already provides Directors of large/public corporations with sufficient incentive to obtain accurate/relevant legal advice
(c) Employees will not necessarily know the nature of privilege and the extent to which it does/does not cover them
(d) No absolute assurance of confidentiality in the corporate context — easily waived by change of board, liquidator etc.Higgins Suggestion: "Split" privilege to give individual corporate agents "use immunity" (ie. limited corporate privilege)
o Solution in which information disclosed by individual corporate agents (ie. employees) can never be used in evidence against the individual agent — information can be disclosed without consent but cannot be against them in any legal proceedings
Higgins: Only way corporate privilege might work in a way consistent with underlying rationale
Application to STATE clients: HIGGINS ARGUMENT: LPP is a human right
- (1) Allows citizens to get legal advice regarding legal obligations State has imposed on them, and rights they have against State and fellow citizens
- (2) Even if State does have the privilege, waiving privilege would not cause any harm to good government
Area where "the law has extended well beyond the principle that supports it"
o Logic of privilege as it applies to citizens: without guarantee of absolute confidentiality, reluctant to seek advice, and/or be less than candid with lawyers
Applying logic to State: no risk of the same "chilling effect" — Governments change, and subsequent Government can waive privilege
Application of Litigation Privilege to Communications with Non-Parties
- LP applies to communications with non-parties made for "dominant purpose" of being submitted to lawyer for advice or use in pending or contemplated litigation
Not privileged if it comes into existence for substantial purpose other than litigation (Waugh v British Railways Board)
- HOWEVER: ZUCKERMAN: Need for limiting protection of communications with non-parties
(i) Note fundamental change in litigation culture — witness statements and expert reports must be disclosed in advance
(ii) Party has no property in or control over witnesses
(iii) Preparation for litigation may involve production of evidence to be presented trial — only fair to allow other parties to probe process that culminated in evidence
Particular concern in relation to experts: Risk that litigant will consult experts until finding favourable opinion.
o ARGUMENT: Facts suggest need to review extent to which litigation privilege attaches to communications with non-parties
Balance between need to (a) provide litigants with secure sphere to prepare litigation and (b) provide other litigants with adequate means to test evidence
LP for communications with non-parties should give way where this is necessary in order to enable other parties to adequately test the evidence that the party claiming privilege has adduced (ie. where evidence the outcome of evidence-creating process)
LEGAL ADVICE PRIVILEGE — COMMENTARY
Examines rationale for LAP in aftermath of the disagreement between the EWCA and UKHL in Three Rivers litigation:
- EWCA concern in Three Rivers No 5 to limit scope of corporate LAP — not all employees fall within definition of "client"; versus
- UKHL (implicit) claim in Three Rivers No 6 that justification for LAP applies equally to corporations and individuals (but refused leave to appeal No 5)
- Cracks appearing in judiciary's support for corporate LAP
Rational for LAP: Principally based on needs and behaviours of individuals — Lord Rodger in Three Rivers No 6: rationale 'is rooted in an aspect of human nature':
- Intrinsic importance: fundamental human right
- Extrinsic importance: fostering greater legal compliance
- "Rule of law" rationale — Zuckerman (2006) and endorsed by Lord Scott in Three Rivers No 6 — rests empirical assumptions: without privilege people less likely to seek advice/fully to disclose to lawyer; limits ability of lawyers to provide relevant advice; inhibits capacity of persons to understand law
Without the above "the case for privilege is stillborn"
Main argument for extending LPP to corporations: Instrumental: promotes same desirable behaviour in corporations as in individuals — encouraging greater consultation and candour with lawyers, and ultimately greater compliance
- Lord Scott Three Rivers (No 6): privilege a fundamental right of all legal persons, great and small, real or artificial
ARGUMENT: Above flawed — does not consider difference between corporate and individual privilege, and whether privilege actually promotes same behaviour in corporations as in individuals noting realities of modern corporate life, doubtful that corporations need and should be granted LAP
4 (1) Rule of law rationale (and corresponding empirical case) "based largely on the needs and behaviour of individuals" and irrelevant to corporations
- Position of Directors
(a) Changes to content of directors' duties:
(i) Increased duties of diligence, care and skill — stringent obligations to be properly informed and meet objectives standard of care/skill
"Extremely strong incentives, if not a practical requirement, to obtain accurate legal advice
See Alexander study (emphasising key changes since that time)
(ii) Increased probability of enforcement — easier for shareholders to commence litigation for breach of duties
While argument criticised as "naïve" (ie. directors all fallible humans, with significant personal career/economic incentives and social pressures)
— criticism only stands if we ignore fact that individuals acting as agents and subject to binding rules that place premium on compliancePosition of Employees [Noting that, in many cases, information needed for legal advice held by ordinary employees]
o (a) Role of privilege in securing employees' cooperation "negligible" compared with ordinary obligations/pressures/incentives to cooperate
(b) Corporate privilege does not belong to individual agent — belongs to corporation (including power to waive) — fact that employee who communicates information to lawyer does not have control over communication is bound to make employees less likely to talk candidlySmall and medium sized enterprises: Key differences:
o (a) Fewer incentives to obtain accurate legal advice: (i) Lower levels of care and skill required of directors; and (ii) Smaller size, significance and complexity of corporation's affairs
(b) Higher disincentives to talk candidly with lawyer
High likelihood that individual interest intertwined with corporation interests
Suggestion that individuals could continue to obtain advice protected by privilege in individual capacity — HOWEVER: solution less practical as size of company increases
Accepting the above, options:
1. Because privilege has value for smaller companies, must extend to all corporations — undesirable/impossible to decide which companies should (not) have privilege — arbitrary and uncertain
2. Small businesses that elect to incorporate and enjoy benefits of separate legal personality/limited liability can be reasonably expected to comply with extra transparency/disclosure obligations — absence of privilege "not too great a price to pay for prize of limited liability"
Higgins prefers (2) — Need effectively to regulate large corporations who wield extensive economic power, which is inhibited by a broad corporate privilege, a higher priority than affording small corporations the right to obtain legal advice in confidence
3. Adopt different privilege rules for small and large corporations — no obvious reason why privilege cannot adopt differential treatment
HOWEVER: Given policy questions involved, change would need to be via legislature
(2) Why does this all matter? Privilege comes at significant cost to administration of justice — enables clients to suppress sensitive information potentially
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