The latest example is R (Jet2.com) v Civil Aviation Authority where the CAA has been compelled to disclose internal emails and early drafts of documents that the writers would not have expected Jet2.com, let alone the public, to read.
Ventilation of these issues in the courts inevitably encourages other litigants to challenge claims that certain internal email exchanges, draft reports and notes of meetings are privileged. The position regarding legal advice privilege is particularly complex because of the restrictive approach taken to communications with and documents created by employees by the House of Lords in Three Rivers (No 5). The Court of Appeal in SFO v ENRC has acknowledged the need for the Supreme Court to reverse Three Rivers (No 5) but for the time being we are stuck with it.
Understanding the role of the in-house lawyer and the confusing rules about which internal documents are protected by legal advice privilege is vital. Once litigation is in prospect, it may be possible to avoid some of the problems by claiming litigation privilege but for present purposes we assume that this is not the case. We explore some familiar scenarios below.
The role of the in-house lawyer
An in-house lawyer can give privileged advice but only if they are acting in that capacity and not in a commercial or executive role. Challenges to privilege are increasingly being made on the ground that the lawyer was acting as “a man of business”, whether the advice has been given by external or in-house lawyers. Challenges have succeeded in SFO v ENRC (where the lawyer’s stated role was Head of Mergers and Acquisitions) and in AAZ v BBZ (where the solicitor had arranged insurance for the husband’s modern art collection). In UTB LLC v Sheffield United Ltd a foreign lawyer was acting both as lawyer and, on occasion, as a man of business. The judge held that in the circumstances it was not reasonable, proportionate nor necessary to go behind the claims to privilege.
Communications with the in-house lawyer
Emails from employees to an in-house lawyer will only be protected by legal advice privilege where the in-house lawyer is being asked for legal advice (and not acting as a man of business) and those asking are authorised to do so – this is the effect of Three Rivers (No 5). In Menon v Herefordshire Council the court accepted evidence that all employees were entitled to use the services of the in-house legal department and concluded therefore that confidential communications between the employees and the lawyers for the purposes of obtaining and giving legal advice were privileged. A party claiming privilege will need to be able to identify the employees who were authorised to request and receive legal advice (Glaxo Wellcome UK Ltd (t/a Allen & Hanburys) v Sandoz Ltd).
Emails to several people
It is commonly thought that copying in an in-house or external lawyer to an internal email exchange will make the email privileged. This is not necessarily the case – it depends on the purpose of the exchange and whether the employee is authorised to ask for legal advice. The status of emails sent to several people with different roles has been the focus of discussion in R (Jet2.com) v Civil Aviation Authority. The judge held that where an employee sends an email to both a lawyer and a non-lawyer, it will be privileged if the dominant purpose was to seek advice from the lawyer, the non-lawyer being copied in for information only. But if the email is sent to the non-lawyer for a commercial comment and to the lawyer for legal advice, it won’t be privileged unless the email or the non-lawyer's response could disclose the nature of the legal advice sought and given.
Documents drafted by committee
The status of draft letters or reports circulated within a company or organisation also came up in R (Jet2.com) v Civil Aviation Authority. The CAA were ordered to disclose all drafts of a letter to Jet2.com prepared before their in-house lawyers were consulted on its terms.
Consulting an in-house lawyer about a draft report or letter won’t make it the draft privileged. In Atos Consulting Ltd v Avis Plc Atos claimed privilege over drafts of an internal report, stating that redacted passages contained “legal advice reviewed, amended, approved and given by James Loughrey (Atos head of their UK legal department) in his capacity as legal advisor to Atos”. The judge rejected this claim to privilege. Had the authors of the draft reports set out legal advice given by Mr Loughrey, they would be covered by legal advice privilege. The explanation given, however, suggested that the original text was produced by someone else and then reviewed by him.
Circulating legal advice internally
Companies and other organisations are routinely advised not to summarise legal advice and to restrict its circulation. This is good practical advice because a document will cease to be privileged if it is no longer confidential. The wider the dissemination of the advice, particularly by email, the greater the likelihood that it will get into the wrong hands and the harder it is to identify the advice itself when it is reworded. However, circulating privileged legal advice to employees, whether in its original form or in summary, will not in itself affect its privileged status (see The Sagheera).
Notes of meetings
Ensuring the presence of a lawyer, whether in-house or external, at a meeting and getting them to draft a note will only confer privilege on the note where the lawyer is fully engaged as a legal adviser at the meeting. Where a lawyer attends the meeting in that capacity and creates all documents related to the meeting, those documents will attract legal advice privilege and the court will not sift through evidence in order to separate fact from legal advice (see Property Alliance Group Ltd v Royal Bank of Scotland Plc).
- Avoid any communications by email or text discussing potentially sensitive matters.
- Avoid sending multi-purpose emails raising both commercial and legal points, copied to both non-lawyers and lawyers.
- Where legal advice needs to be circulated within the organisation, send hard copies rather than emails, ensuring that both the advice and the covering letter are marked “Privileged and confidential”.
- Advise employees to limit the circulation of potentially sensitive information and to avoid commenting upon legal advice where possible.
- If preserving privilege is important, a lawyer should be present at internal meetings to participate and take a note where a record of the discussion is required.
- Try not to mix up privileged and non-privileged material in the same document. If you need to do so, keep references to legal advice in a separate section so it can easily be redacted.
- Ideally only authorised employees, in-house and external lawyers should create documents concerning the investigation of a matter that could lead to litigation.