In 1859, the then Vice Chancellor Sir Richard Kindersley held in Lawrence v Campbell that:
“…The general principle is founded upon this, that the exigencies of mankind require that in matters of business, which may lead to litigation, men should be enabled to communicate freely with their professional advisers, and their communications should be held confidential and sacred, and that no one should have a right to their production.”
Does such a right to legal advice privilege extend to foreign lawyers, and if so, to in-house foreign lawyers that are neither said to be registered or regulated in their own jurisdiction?
In PJSC Tatneft v Bogolyubov and others, Moulder J was asked to countenance an application for disclosure in respect of communications made between the claimant and its in-house legal team that was based in Russia.
The application itself was sought under CPR 31, and paragraphs 14.2 and 17.1 of Practice Direction (PD) 51U. The PD requires that a party seeking to challenge a purported right of a party to withhold disclosure must apply to the court for such an order. The order sought was for the disclosure of communications between the claimant and the “…Tatneft in-house ‘‘Legal’’ department…”.
The applicant accepted that the lex fori was English law, as to determining whether a communication can be withheld by a claim or right to privilege. This was raised as an issue, given that the claimant’s in-house legal team was based in Russia.
The case advanced by the applicant for disclosure was that, as a Russian advocate’s secrecy (the English law equivalent being privilege) did not apply to in-house lawyers, any such communication passing between the claimant and its in-house team did not attract legal advice privilege.
It was alleged that the Russian legal system makes a clear distinction between those that can claim advocate’s secrecy, which applied to registered advocates, but that no such privilege applied to in-house lawyers. As the claimant’s in-house lawyers were said to not be “appropriately qualified” foreign lawyers, it was submitted that, as a matter of English law, privilege did not apply.
The claimant accepted that its in-house legal team were not advocates as a matter of Russian law, but submitted that legal advice privilege applied because advice obtained from foreign lawyers attracted privilege, and that this included advice provided by an in-house legal team. It was submitted that, as Russian law did not apply, the question of whether or not advocate’s secrecy rules applied to in-house legal teams in Russia was irrelevant as a matter of English law.
The applicant submitted that, under English law, legal advice privilege applies only to:
- Professional lawyers: R (on the application of Prudential plc and another) v Special Commissioner of Income Tax (“Prudential”).
- In-house lawyers if regulated and admitted to practice: Alfred Compton Amusement Machines Ltd v Customs and Excise Commissioners (No 2).
- Appropriately qualified foreign lawyers (see Hollander on Documentary Evidence).
The claimant averred that:
- All communications made in confidence with professional legal advisers with the dominant purpose of providing legal advice were subject to privilege: Three Rivers (No 6), and R (Jet2.com Ltd) v Civil Aviation Authority (“Jet2.com”).
- Where foreign lawyers are concerned, the court does not probe into either the standards of training or regulation: Prudential.
- Legal advice privilege is not confined to barristers and solicitors, provided the advice is taken from a “variety of lawyers”: Wilden Pump Engineering v Fusfeld (at paragraph 167).
The applicant submitted that privilege could only extend to foreign lawyers if they were appropriately qualified, which was argued to include those regulated and admitted to practice.
However, Moulder J noted that, in Prudential, Lord Neuberger stated (at paragraph 45):
“Such principled justification as there is for the restriction of [legal advice privilege] to lawyers seems to me to be further undermined by the extension of [legal advice privilege] which the court has approved to all foreign lawyers, without (it would seem) regard to their particular national standards, regulations or rules with regard to privilege.”
Lord Neuberger continued (at paragraph 73) in Prudential to describe that, whilst the extension of legal advice privilege to foreign lawyers did not necessarily abide by the notion that for the advice to be protected by privilege it should come from professional lawyers, the rule was based on “…fairness, comity, and convenience…”.
Moulder J drew a distinction between the “function” of the relationship between a client and their lawyer and the “status” of the lawyer, which was said to be a relevant distinction to be made in the case of foreign lawyers. In respect of foreign lawyers, the courts have taken a broader approach than to those lawyers practising under English law, and appears to have placed greater weight on function as opposed to status, for the practical reasons set out by Lord Neuberger in Prudential (see above).
The applicant further proposed that legal privilege should not be given to the claimant’s in-house legal team because English in-house lawyers are required to be regulated, and that in-house lawyers are paid employees and as such do not carry the requisite independence. Moulder J, citing Jet2.com, dismissed these submissions and found that communications with in-house lawyers have in fact been found to be protected by privilege for some time.
Moulder J found that, once it was accepted that a court will not investigate the registration or regulation of a foreign lawyer, it followed that in-house foreign lawyers communications carry exactly the same protections to privilege as those lawyers in private practice. It was found that there wasn’t a “mismatch” between a foreign lawyer not having to be regulated and or registered as a lawyer in their home country, given the lack of such a requirement in the authorities (see Prudential).
Accordingly, Moulder J stated (at paragraph 57) that:
“…in my view legal advice privilege extends to communications with foreign lawyers whether or not they are ‘‘in-house’’ and thus employees of a particular company or organisation and the court will not enquire into how or why the foreign lawyer is regulated or what standards apply to the foreign lawyer under local law…”.
Therefore, the only requirements for legal advice privilege to attach to foreign lawyers is that the foreign lawyer should be acting in a professional capacity in connection with providing legal advice.
Whilst the applicant attempted to persuade the court that it would be extending the remit of legal advice privilege by allowing a non-regulated or non-registered foreign in-house lawyer’s communications with its client to have such protections, the reality is that the authorities have for some time supported the claimant’s position in respect of its claim to legal advice privilege.