Summary

Legal advice privilege attaching to communications between a client and their lawyers, once established, remained in existence unless and until it was waived. It was established as a result of the purpose for which, and the circumstances in which, the communications had been made. It was not lost if there was no person entitled to assert it when a disclosure request was made.

Facts

A group of investors appealed against a decision that legal advice privilege subsisted in respect of documents held by the respondent firm of solicitors.

The investors had invested in a scheme marketed by a Cypriot company which was represented by the respondent. The company was subsequently dissolved. The investors claimed that the scheme was fraudulent and issued proceedings against the respondent for deceit or negligence. They requested disclosure of documents which had passed between the company and the respondent. It was accepted for instant purposes that the documents had attracted legal advice privilege when they came into existence. The question was whether privilege subsisted notwithstanding the company's dissolution. The court below held that it did, distinguishing the decision in Garvin Trustees Ltd v Pensions Regulator [2014] 11 WLUK 469, in which it was held that legal advice privilege had not survived the dissolution of a Northern Irish company, on the basis that there was still a possibility of restoring the dissolved company in the instant case to the register. The Crown had disclaimed any interest in the company's property.

The issue was whether, legal advice privilege having attached to a communication by reason of the circumstances in which the communication had been made, the communication remained privileged unless and until privilege was waived, or whether the privilege was lost if there was no person entitled to assert it when a disclosure request was made.

Held

Ambit of legal advice privilege - Identification of the underlying policy was critical. In R. v Derby Magistrates' Court Ex p. B [1996] A.C. 487, Lord Taylor reviewed the authorities and concluded that the recurring principle was that a person had to be able to consult their lawyer in confidence, and that what was said in confidence would never be revealed without their consent. He stated that it was "a fundamental condition on which the administration of justice rests", Derby Magistrates' Court considered (see paras 6-22 of judgment). The investors accepted that the privilege was absolute, and that the boundaries of that privilege were to be determined in accordance with the underlying policy, but questioned what those boundaries were. The answer was that legal advice privilege attached to a communication because of the nature of the communication and the circumstances under which it was made. Once established, it remained absolute unless it was waived, Three Rivers DC v Bank of England [2004] UKHL 48 followed (paras 23-26). No privilege attached to documents or communications between client and lawyer where the client's purpose was the furtherance of crime, fraud or other iniquity. The concept of "iniquity" in that context was a broad one. That exception did not, however, conflict with the principle that, once privilege attached, it remained unless waived by the client, nor with the underlying rationale. There was no retrospective stripping away of privilege; such communications never attracted legal advice privilege in the first place. Therefore, the boundaries within which legal advice privilege was absolute unless and until waived were that the communication in question had to be a communication between lawyer and client, made in connection with giving or receiving legal advice, otherwise than for an iniquitous purpose (paras 27-31). The investors' secondary argument was that where the court was required to consider whether privilege applied to a novel situation, a policy choice had to be made. They argued that, although once privilege had been established the balance had already been struck, that did not address the anterior question of whether privilege had been established. They further argued that policy supported refusing to extend privilege to a defunct organisation as, unlike the death of an individual, the dissolution of a corporation was under its own control. However, that was the wrong way to characterise the question. Privilege attached to a communication at the time when it was made. It was not a question of extending the scope of privilege, but of extending the circumstances in which privilege ceased to apply. The firm position that the law had taken was that once privilege had attached to a communication, it would only cease if waived by the client or someone otherwise entitled to waive it, or was overridden by statute. The balance had been struck once and for all in the 16th century and no further exceptions should be created, Derby Magistrates' Court followed. Recognition of exceptions would undermine the policy of certainty that underpinned legal advice privilege (paras 48-58).

Garvin Trustees v Pensions Regulator - The master was bound by Garvin; the instant court was not. The principle applied in Garvin was wrong. It was not a question of who could assert privilege; it was a question of who could waive it and, if there was a person entitled to waive privilege, whether they had done so, Garvin overruled. Legal advice privilege, once established, remained in existence unless and until it was waived. It was established as a result of the purpose for which, and the circumstances in which, the communication was made. Whether there was no one who could now waive it; or whether the Crown could have waived it but had not done so, did not matter. The master was therefore right to refuse to order disclosure, but for different reasons (paras 80-90).

Costs - The investors had been ordered to pay 80% of the respondent's costs. They argued that the respondent should not have actively contested the application. However, it was the lawyer's duty to assert privilege. If, in order to fulfil that duty, they incurred costs, they were simply fulfilling that duty, R. (on the application of Morgan Grenfell & Co Ltd) v Special Commissioners of Income Tax [2002] UKHL 21 followed, Nationwide Anglia Building Society v Various Solicitors (No.1) [1998] 1 WLUK 248 and Mortgage Express v Sawali (Costs) [2010] 11 WLUK 539 applied. Also, the respondent was the only named party to the application notice and the relief sought included a mandatory order against it. It would be extraordinary if a person in those circumstances was not entitled to appear before the court to contest the orders sought. The master was entitled to regard the respondent as the successful party and to award it the proportion of its costs that she did (paras 91-94).

Appeal dismissed