Tatneft, a Russian oil and gas company, took legal action against Bogolyubov and three others (the defendants) for alleged fraud in connection with oil payments. In the course of these proceedings (PJSC Tatneft v Bogolyubov), standard disclosure was ordered by the court. Tatneft claimed legal advice privilege over a number of communications with its legal advisers, including communications between Tatneft employees and its Russian in-house legal team. The defendants demanded specific disclosure and claimed that English legal advice privilege did not protect Tatneft’s communications with its Russian in-house lawyers.
Arguments raised regarding the extension of legal advice privilege to foreign (in-house) lawyers
The defendants based their argument on the fact that Russian in-house lawyers are not “advocates” (members of the Russian Bar) and that Russian “advocate’s secrecy”, the closest Russian concept to legal professional privilege, does not apply to Russian in-house lawyers. Previously, English legal advice privilege had already been extended to foreign lawyers, but the defendants argued that this only applied to “appropriately qualified” and regulated lawyers, ie (in this case) Russian advocates, but not to in-house lawyers who are not advocates.
Tatneft on the other hand argued that, under English law, legal advice privilege always applies to communications with foreign lawyers, including in-house lawyers, as long as the communications were made in confidence for the purpose of giving or obtaining legal advice, and that the legal status of the foreign lawyer in their own jurisdiction is irrelevant.
Mrs Justice Moulder ruled in favour of Tatneft: she held that it is the “function” of the relationship and not the “status” of the lawyer which is relevant in the case of foreign legal advisers. Legal advice privilege extends to communications with foreign lawyers whether or not they are “in-house”, and the English court will not investigate how a foreign lawyer is regulated in the lawyer’s own jurisdiction or what standards apply to the foreign lawyer under the local law. The only requirement in order for legal advice privilege to apply is that they should be acting in their capacity as a lawyer in connection with providing legal advice. It is not necessary or relevant for the court to consider the training and experience of the foreign lawyer.
Uncertainty or unfairness?
A further important argument raised by the defendants was that such a broad application of legal advice privilege to foreign in-house lawyers, with no requirements regarding qualifications, would lead to uncertainty and to a broader application of legal privilege abroad than within England. However, Moulder J held that uncertainty would rather be created if English courts had to examine particular national standards and express views on the qualifications of foreign lawyers so as to determine if a party was protected from disclosure in a particular case.
In the present case, the judge considered the significant differences between the English and Russian legal systems, and noted that a narrow approach to privilege would exclude all in-house lawyers and a large proportion of other lawyers working in Russia, which Moulder J held would be unfair and inconvenient.
Moulder J reaffirmed that under English law legal advice privilege applies to communications not only with a lawyer in private practice but also with an in-house lawyer. She also held that, because the court will not investigate the regulatory status of a foreign lawyer, the extension of legal advice privilege to foreign in-house lawyers is a matter of logic and principle. In-house lawyers are “in the same position as those who practice on their own account, the only difference being that they act for one client”.
The judgment in Tatneft v Bogolyubov provides clarity and reassurance to parties in English proceedings that their communications with their foreign lawyers and with their (domestic and foreign) in-house legal teams are protected from disclosure by legal advice privilege, as long as the lawyer was acting in their capacity as a lawyer in connection with the provision of legal advice to their client.
Please do not hesitate to contact the author of this article for more information about commercial disputes in the English courts and legal advice privilege.