BRIEFING
Claiming legal privilege over documents
NOVEMBER 2009
Recent English cases end the attempted
redefinition of legal privilege.
English law is of strong persuasive authority
to Jersey Courts and whilst it remains to be
seen whether the Jersey Courts accept these
recent judgements, on the assumption that
they do, the effect of these decisions can be
summarised as follows:
• As regards legal advice privilege:
–– Legal advice privilege against
inspection of documents is available
where the advice given in a lawyer
and client relationship is regarding
any relevant legal concept.
–– Communications will now be
protected regardless of the content
so long as it is between a lawyer and
his client.
• As regards litigation privilege:
–– Litigation must be reasonably in
prospect rather than a possibility for
the privilege to arise.
–– An assertion by a lawyer that a
document is privileged is not
conclusive and the Court will take a
more critical approach to claims for
privilege.
–– Where an affiliate company is facing
litigation in another jurisdiction this
does not mean that other companies
in the group may rely on litigation
privilege in relation to legal advice
which they seek concerning related
issues, although such advice may be
subject to the narrower legal advice
type privilege.
–– Proceedings (such as letter of
request for evidence issued by a
foreign court) whereby a
–– party may compel a non-party to
produce relevant documents and/
For more briefings visit
mourantozannes.com
This briefing is only
intended to give a
summary and general
overview of the subject
matter. It is not intended
to be comprehensive and
does not constitute, and
should not be taken to be,
legal advice. If you would
like legal advice or further
information on any issue
raised by this briefing,
please contact one of your
usual Mourant Ozannes
contacts.
Contact:
Jonathan Speck
Partner, Jersey
For contact details,
please see the end of this
briefing.
mourantozannes.com or evidence for the purposes of
different proceedings would not
give rise to a sustainable claim for
litigation privilege, although again
legal advice type privilege may be
available.
–– Litigation privilege is restricted
to when the communication was
made for the dominant purpose
of litigation and can therefore not
be used during non-contentious
matters.
The contents of the three judgments are
summarised below. More detailed guidance
can be found in the Mourant Ozannes briefing
note entitled "Guidelines on discovery of
documents in legal proceedings". However,
this is a complex and difficult area of the law
and, as the three judgments demonstrate,
specific advice should always be obtained in
relation to specific documents.
Introduction
There are two main types of legal professional
privilege against inspection of documents:
i. legal advice privilege; and
ii. litigation privilege
Litigation privilege is broader in its scope
than legal advice particularly as it can include
communication to third parties but only arises
in relation to communications and documents
created after litigation is reasonably in
prospect.
Two of the three decisions of interest are
judgments in the long running litigation
involving the liquidators and creditors of
BCCI against the Bank of England (the "Bank")
for misfeasance in public office in respect
of its supervision of BCCI before its collapse.
These two decisions are only concerned with
legal advice privilege and not with litigation
privilege. The third judgment is again by the
Court of Appeal and relates to an attempt
BVI | CAYMAN ISLANDS | GUERNSEY | HONG KONG | JERSEY | LONDON
BRIEFING
mourantozannes.com to obtain evidence for US tobacco litigation
and comments upon both legal advice and
litigation privilege.
BCCI Court of Appeal judgment
The Court of Appeal judgment1 related to the
claimants' application for specific disclosure
of documents over which the Bank claimed
legal advice privilege. The Bank accepted
that the documents were not prepared in
contemplation of litigation and that litigation
privilege did not apply. The claimants did not
at this stage seek disclosure of documents
passing between the Bingham Inquiry Unit
("BIU"), which was established by the Bank in
relation to a private non-statutory inquiry by
Lord Bingham into the Bank's supervision of
BCCI, and the firm of solicitors appointed to
advise the BIU in relation to the inquiry.
However, the claimants did seek disclosure of :
i. documents prepared by Bank employees
outside the BIU with the intention that
they should be sent and were sent to the
solicitors; and
ii. the documents that had been prepared
by Bank employees outside the BIU who
were no longer employees of the Bank.
It was only the BIU that were regarded as
"client" and no other bank employees, no
matter how eminent, were considered to fall
into that category. The Court of Appeal held
that legal advice privilege, unlike litigation
privilege, applied only to communications
between a client and his legal advisers for
the purposes of seeking or obtaining legal
advice and to documents evidencing such
communications. As the categories of
documents did not fall within this description
the Bank was not entitled to privilege in
respect of any of these documents.
This definition of "client" has not since been
overruled and therefore remains in force.
Therefore until such a time as this is clarified
it should be assumed that "client" is defined,
as only those employees who are charged
with instructing or communicating with legal
advisors. Companies should also note that
persons who fall outside of this narrow band of
people could generate communications (even
if internal) that may become discloseable as
they were not generated by the "client".
BCCI House of Lords Judgment
The House of Lords' judgement2 also
concerning disclosure of documents
principally looked at what constitutes "legal
advice". The Court confirmed the test in
Balabel v Air India3 that legal advice is not
confined to telling the client the law and
should include advice as to what should
prudently and sensibly be done within "the
relevant legal context".
This judgement overruled the earlier Court
of Appeal decision that had restricted
legal advice to advice whose dominant
characteristic was one with regard to legal
rights and obligations rather than things such
as presentation. The House of Lords decision
marks an end to the attempted redefinition
of the meaning of legal advice and therefore
no regard will be given to a communication’s
subject matter so long as it falls within a
relevant legal context.
Tobacco litigation
The third case4 concerned a letter of request
for evidence by the United States of America
to the English High Court seeking orders
that a solicitor from an English law firm be
examined in court for the purposes of making
his evidence available in proceedings in the
US District Court for the District of Columbia.
The proceedings in Colombia District Court
involved allegations that a number of tobacco
companies had failed to inform the American
public about the health risks of smoking,
such as by disposing of relevant documents.
The USA is claiming at least $289 billion
from tobacco companies and discovery is
expected to result in production of 40 million
documents. The letter of request was opposed
on the grounds that all communications
between the solicitor and his clients would
be covered by either legal advice or litigation
privilege.
At first instance,5 Mr Justice Moore-Bick
commented that in his view the traditional
requirement that litigation be "reasonably in
prospect'' before a claim for litigation privilege
could arise, was not satisfied unless the party
seeking to claim privilege can show that
litigation was "a real likelihood rather than a
mere possibility''.
BVI | CAYMAN ISLANDS | GUERNSEY | HONG KONG | JERSEY | LONDON
NOVEMBER 2009
BRIEFING
The lawyer against whom the USA's letter of
request for evidence was directed had advised
various companies in the BAT group between
1985 and 1994 concerning review of their
documents as part of a defence strategy in
anticipation of their involvement in smoking
and health litigation. A US affiliate company of
BAT was facing numerous smoking and health
claims during this period but this was not a
sufficient basis for a claim of litigation privilege
in relation to the lawyer's advice to the BAT
companies.
The Court of Appeal upheld Mr Justice
Moore-Bick's decision. The Court of Appeal
confirmed that the test for when litigation
privilege arose remained whether litigation
was reasonably in prospect. However, it
agreed with Mr Justice Moore-Bick that it
was insufficient that there was "a distinct
possibility that sooner or later someone might
make a claim" or that there was "a general
apprehension of future litigation".
The Court of Appeal also held that even
though a letter of request for evidence
or proceedings against a third party for
production of documents were adversarial
proceedings, nevertheless this would not be
a sufficient justification for litigation privilege
applying. The Court considered that there
was a "clear distinction" to be drawn between
adversarial proceedings which are destined
for a contested hearing in a court or courtlike body, and proceedings whereby a party
can compel a non-party to produce relevant
documents for the purposes of the main
proceedings.
Contact:
Jonathan Speck, Partner, Jersey
+44 1534 676 227
jonathan.speck@mourantozannes.com
Three Rivers District Council and others –V- Governor and Company of the Bank of England Rev 1 [2003] EWCA Civ 474
Three Rivers District Council & Ors & The Governor & Company of the Bank of England (No.6) [2004] UKHL 48
3
Balabel V Air India [1998] Cti 317 330 331
4
United States of America –V- Philip Morris and Others [2004] EWCA Civ 330
5
United States of America –V- Philip Morris and Others [2003] EWHC 3028
1
2
mourantozannes.com BVI | CAYMAN ISLANDS | GUERNSEY | HONG KONG | JERSEY | LONDON
NOVEMBER 2009