Privilege entitles a party to withhold written or oral evidence from a third party or the court.
In litigation, a party is must include the privileged document(s) in the list of documents but, once privilege has been established, the party has an absolute right to withhold the document in question. b) Following a request from public authorities
(e.g. the police or HMRC) – unless there is a clear statutory provision to the contrary
Privilege cannot be claimed unless the evidence in question is confidential. It follows that a privileged document that has ceased to be confidential can, generally, no longer be the subject of a claim for privilege. There can be no confidentiality and therefore no privilege in the following types of document:
The fact that a privileged document may be relevant is of no consequence. No adverse inference can be drawn by the court if privilege is claimed.
There are several types of privilege:
(a) Legal professional privilege which includes:
• legal advice privilege and
• litigation privilege
(b) Joint privilege
(c) Common interest privilege
(d) Without prejudice rule.
(a) Transcripts of proceedings in chambers, in open court, or before arbitrators
(b) Attendance notes of meetings where both parties were present
(c) Telephone attendance notes of conversations between lawyers of both sides. The exception to this is where the note contains additional comments by the solicitor (for example, annotations on the merits of the case or strategy). If feasible, such notes should be blanked out and the remainder of the note will not be deemed privileged. If the comments are preponderant so that blanking out is practically impossible, the note will be treated as privileged.
Legal professional privilege is a substantive right. The right belongs to the client and the lawyer is bound by it. It can protect a party from having to disclose documents in a broad range of situations, for example:
(a) In the context of legal proceedings
Legal Professional Privilege covers all members of the legal profession: solicitors, barristers and foreign lawyers (with some exceptions for in-house lawyers – see below). It is likely also to cover supervised legal executives, properly supervised paralegals and trainee solicitors. Legal advice privilege applies only to legal advice given by a lawyer and not to legal advice given by a non-lawyer, for example, an accountant (R (on the application of Prudential PLC &
Anor) v Special Commissioner of Income Tax & Anor [2009]
EWHC 2494 (Admin)).

The position of in-house lawyers is difficult. Some of what they do is covered by legal advice privilege but that part of their work which is business advice or administration will not be privileged. In EC competition law investigations, communications with in-house lawyers will not be treated as privileged (Alfred Crompton Amusement Machines v
Customs & Excise Commissioners (No 2) [1972] 2 QB 102).
This is on the basis that in-house lawyers are not regarded as being sufficiently independent from their employer.
Legal advice privilege and litigation privilege are distinct types of legal professional privilege. Legal advice privilege can apply whether or not litigation is pending or contemplated whereas litigation privilege can only apply when litigation is pending or contemplated. Legal advice privilege only applies to communications between a lawyer and client whereas litigation privilege can apply to communications by a client or his lawyer and a third party.
Need for communication - documents not actually communicated between a lawyer and client may well not be privileged, although the rules are more flexible where non-communication is by a lawyer to a client (as opposed to non-communication by the client to a lawyer):
(a) The general rule is that if a lawyer commits to paper during the course of his retainer matters which he knows only as a consequence of the professional relationship with his client, those papers will be privileged. This would include factual summaries of information gathered from third parties. There would not seem to be any requirement that these papers are then communicated to the client in any way.
The Court of Appeal has accepted that a lawyers’ own drafts of documents and memoranda were privileged even if not transmitted to the client (Three
Rivers (No 5); restated in USP Strategies Plc & Anor v London General Holdings Ltd & Ors [2004] EWHC
373 (Ch)).
(b) By contrast, the need for communication will always apply to documents going from client to his lawyer.
Consequently, memoranda prepared by the client as a preparatory step to obtaining legal advice are unlikely to be privileged.
(c) In any lawyer/client relationship there will be a continuum of communication between a lawyer and his client. Where information is passed between the two as part of that continuum, aimed at keeping both informed so that advice may be sought and given as required, privilege will attach.
(d) A communication from the client may end with a specific request asking for advice, but even if it does not it will usually be implied in the relationship that the lawyer will at each stage (whether or not specifically asked) tender appropriate advice (see
Balabel and another v Air India [1988] 2 All ER 246).
(e) Legal advice privilege will only attach to communications between a lawyer and his client. It will not therefore attach to communications with third parties although litigation privilege may if the requirements of the type of privilege are made out
(see below).
(f) Who is the client? In Three Rivers (No 5), the court gave a very restrictive definition of client and held it would only cover communications between the lawyer and a small group of the bank’s employees actually charged with instructing the Bank’s lawyers. This means where the client is a company, not all documents produced by employees and sent directly to lawyers will be privileged. Privilege will only attach to communications between the lawyer and the client (as defined).
(g) Legal advice privilege will not cover internal documents generated by employees of the client even if they are necessary to provide information to lawyers to obtain legal advice (Three Rivers (No 5))

although these may be covered by litigation privilege
(see Litigation privilege).
Need for relevant legal context - in any lawyer/client relationship there will often be a stream of communication between lawyer and client. A communication from the client may end with specific request asking for advice, but even if it does not it will usually be implied in a relationship that the lawyer will at each stage (whether or not specifically asked) tender appropriate advice: instructions requesting legal advice will not be privileged.
(b) Care should be taken with board minutes. If minutes are made of discussions in the board meeting for a non-privileged purpose then those minutes will not be privileged. A board minute summarising or attaching a copy of legal advice received will be privileged, but if the minute goes on to discuss the advice or its implication the privilege will be lost.
(a) Legal advice privilege covers advice as to what should prudently and sensibly be done in the relevant legal context.
(c) As a result of the restricted definition of the ‘client’ noted above, when disseminating legal advice within an organisation, make this subject to confidentiality obligations.
(b) Presentational advice (for example, as to how evidence should be presented) will also be privileged if given in the relevant legal context (for example, in the context of an inquiry). Legal advice is therefore not limited to advice on the client’s rights and liabilities. Nevertheless, pure business advice given by a solicitor will not be privileged, for example, advice on investment or finance policy, as it will lack the relevant legal context (Three Rivers (HL)).
Arises from the principle that a litigant or potential litigant should be free to seek evidence without being obliged to disclose the result of his researches to his opponent. For litigation privilege to apply, the material in question must satisfy four rules. It must:
(a) Be confidential (see above).
(c) There will be many grey areas, and for these you need to consider whether the lawyer is wearing his legal spectacles or acting as a man of business
(Three Rivers (HL)). The issue remains uncertain. If the advice involves risk management, then it is likely to be privileged since it arguably comes within a relevant legal context.
Wider communication – key things to be aware of:
(a) Communication of privileged advice from the recipient within the company to a company’s board of directors should not cause loss of privilege (either in the original document or in the subsequent communication), nor should oral submissions of advice at a board meeting. However internal communications forming preparations for the
(b) Be a communication between a lawyer (acting in a professional capacity) and his client and between either the lawyer (acting in a professional capacity) or the client and a third party.
(c) Be made for the dominant purpose of litigation.
Litigation privilege applies to proceedings in the
High Court, county court, employment tribunals and, where it is subject to English procedural law, arbitration. With regard to other tribunals, public inquiries or statutory investigations, the position is less clear. In Three Rivers District Council v The
Governor and Company of the Bank of England
[2004] UKHL 48, one of the criteria for establishing litigation privilege was said to be that the litigation must be “adversarial”, not investigative or inquisitorial.

(d) The litigation must be pending, reasonably contemplated or existing. Litigation must be a real likelihood rather than a mere possibility (USA v Philip Morris Inc. and British American Tobacco
(Investments) Ltd [2003] All ER (D) 191 (Dec), approved by Court of Appeal, [2004] All ER (D) 448
(Mar)), although the chance of litigation need not be greater than 50% (see USA v Philip Morris Inc EWCA
Civ 330 at paragraph [68] (Brooke LJ)). Neither a distinct possibility that sooner or later someone might make a claim, nor a general apprehension of future litigation is enough.
(b) Gives that third party the right to claim privilege against the rest of the world in respect of that communication.
Common interest privilege - operates to preserve privilege in documents that are disclosed to third parties. It arises where a person voluntarily discloses a privileged document to a third party who has a common interest in the subject matter of the privileged document or in litigation in connection with which the document was brought into existence:
(a) The document remains privileged in the hands of the recipient. The recipient can assert the disclosing party’s privilege as against the world.
In certain circumstances two or more parties may share a joint or common interest in the subject matter of a privileged communication. In such circumstances:
(b) The common interest must exist at the time of disclosure to the recipient.
(c) The principle of common interest privilege applies to both legal advice privilege and litigation privilege.
(a) The documents can be shared between the parties without the risk that they have waived privilege by failing to retain the confidentiality in the communications.
(b) Neither party can assert privilege against the other in respect of the communications.
(c) Each party may be able to establish a right to access documents held by the other.
(d) Both parties can asset privilege in respect of the communications against the rest of the world.
Joint interest privilege - Where a third party can establish a joint interest in the subject matter of a privileged communication between a lawyer and a client and that third party is not party to the client lawyer relationship joint privilege may apply. Joint privilege:
(d) The law is unclear as to what sort of common interest will suffice for this type of privilege to apply.
Guidance as to when common interest privilege will apply was given in the case of Winterthur Swiss
Insurance Company & Anor v AG (Manchester) Ltd
& Ors Rev 1 [2006] EWHC 839 (Comm). Mr Justice
Aikens held: “where a communication is produced by or at the instance of one party for the purpose of obtaining legal advice or to assist in the conduct of litigation, then a second party that has a common interest in the subject matter of the communication or the litigation can assert a right of privilege over that communication as against a third party. The basis for the right to assert this “common interest privilege” must be the common interest in the confidentiality of the communication.”
(a) Gives that third party a right of access to the communication against the client.
(e) The relationships where common interest privilege has been held to apply include:
• Insured and insurer
• Reinsurer and reinsured

• Companies in the same group, including parent companies and subsidiaries
• Agent and principal
• Any parties who do or might use the same solicitor
The without prejudice (WP) rule will generally prevent statements made in a genuine attempt to settle an existing dispute, whether made in writing or orally, from being put before the court as evidence of admissions against the interest of the party which made them.
Although generally a blanket protection, there are exceptions to the without prejudice rule:
(a) Otherwise WP material may be admissible when the issue is whether, as a matter of fact, the WP communications have resulted in a concluded settlement agreement.
(b) Evidence of facts, communicated in the course of without prejudice negotiations and which are part of the factual matrix or surrounding circumstances, are in principle admissible to assist with the true construction of the resulting settlement agreement.
(c) Evidence of WP negotiations has been admitted on the question of whether the claimant acted reasonably to mitigate his loss in the context of agreeing a prior settlement.
(d) A settlement agreement (as distinct from the
WP correspondence which preceded it) may be confidential but is probably not WP privileged as a whole. Accordingly, the relevant terms may well be disclosable, even if the irrelevant and commercially sensitive material can be redacted.
(e) WP material may be produced to the court to show that an agreement, apparently concluded between the parties, should be set aside on the ground of misrepresentation, fraud or undue influence.
(f) Where there is no settlement agreement concluded, but during the course of negotiation a clear statement was made, giving rise to an estoppel, otherwise WP material may be admitted to prove that the statement was made.
(g) One party may be permitted to give evidence of what the other said or wrote in WP negotiations if the exclusion of the evidence would act as a cloak for perjury, blackmail or other unambiguous impropriety, each of which has been held to constitute
“unequivocal abuse of a privileged occasion”.
(h) Evidence of the fact of WP negotiations may be given in order to explain delay or apparent acquiescence. In some circumstances, the court, at an interim stage, will also look at the content of the relevant WP communication on the delay issue.
(i) The parties may limit the operation of the WP rule by agreeing that communications, which would otherwise be WP, may be put before the court when it is determining the question of costs.
(j) It has been held that, on certain types of without notice application, for the applicant to comply with the duty of full and frank disclosure and, more generally, not to mislead the court, the fact of WP correspondence should have been drawn to the judge’s attention.
(k) When dealing with a challenge to a claim that a document is WP privileged, the presence or absence of the WP label will not be determinative. However, it is imprudent to omit the label from a document intended to be WP because, in the absence of the label, the party claiming the privilege may well have to deal with the inference that it is not WP.

(l) WP privilege is a joint privilege and can, therefore, only be waived jointly by all of the parties to the relevant WP communication.
(m) In principle, it is possible to claim WP protection for documents generated in one action in subsequent litigation between the same parties.
Privilege may be waived in several different ways:
(a) by placing privileged material before the court.
(b) by loss of confidentiality in the material
(confidentiality being an element of privilege).
(c) by express or implied waiver. However, note that the express or implied waiver must be by or on the authority of the owner of the privilege.
The material in this guidance note is intended for information purposes only. Although the law referred to is correct at the time of printing, there may have been changes subsequently. Therefore the information within this guidance note should not be applied to any particular set of facts or relied upon without legal or other professional advice.
The content of this guidance note is the copyright work of Pannone part of Slater & Gordon and no part of it may be reproduced in any form without the prior permission of Pannone part of Slater & Gordon.
Slater & Gordon (UK) LLP is authorised and regulated by the Solicitors Regulation Authority.
www.slatergordon.co.uk