The SFO initiated proceedings challenging the appellant’s claims to privilege over documents generated by solicitors and accountants during an internal investigation. The main issue was whether the notes of interviews between the appellant’s lawyers and employees should be regarded as being subject to legal professional privilege.

At first instance, the High Court held that the documents were not protected by privilege. It held that the dominant purpose of the communications had not been to conduct or prepare for litigation. The Court of Appeal allowed the appeal in relation to litigation privilege and held that litigation was in reasonable contemplation at the material time.

In terms of legal advice privilege, however, the Court of Appeal dismissed the appeal and recognised that the previous case of Three Rivers District Council and Others v. Governor and Company of the Bank of England (No. 5) [2003] QB 1556 decided communications between an employee and the employer’s lawyers would not attract legal advice privilege unless the employee had been tasked with seeking and receiving advice on behalf of the “client”. The Court noted that the issue of who constitutes the “client” for the purposes of legal advice privilege would have to be revisited by the Supreme Court for a change in the legal position to occur.

Practical Lessons

The decision of Three Rivers No.5 remains good authority, to the extent that the definition of the “client” remains restricted for the purposes of legal advice privilege. Consequently, care must be exercised by all employers to ensure that the meaning of “client” is considered and understood at the start of and throughout any matter.

However, larger employers may be at a disadvantage. This is particularly true if legal advice privilege is confined to communications between lawyer and “client”, in the narrow sense of those authorised to seek and receive legal advice on a corporation’s behalf. For such larger organisations, it is unlikely that information on which legal advice is sought will be in the hands of the board or those appointed to seek and obtain the relevant legal advice.
https://www.bailii.org/ew/cases/EWCA/Civ/2018/2006.html