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Legal advice privilege: High Court applies Three Rivers

The High Court has applied the controversial Court of Appeal decision in Three Rivers (No 5) holding that certain employees of the Royal Bank of Scotland (RBS) did not form part of the “client” for the purposes of legal advice privilege.

The restrictive scope of legal advice privilege set out in Three Rivers (No 5) has caused difficulties for companies since that decision was handed down in 2003. Among other things, Three Rivers (No 5) means that companies cannot assume that all documents created by their employees for their lawyers will attract privilege, unless they were prepared in contemplation of litigation.

The RBS case concerned a 2008 rights issue. The bank claimed legal advice privilege in relation to records of interviews conducted by or on behalf of RBS with employees and ex-employees as part of the bank’s investigations.

Rejecting the privilege claim, Mr Justice Hildyard applied the restrictive definition of “client” given in Three Rivers (No 5) and held that legal advice privilege would only cover communications between the lawyer and a small group of the bank’s employees actually charged with instructing the bank’s lawyers.

In a detailed consideration of the question, which will require some analysis by companies looking to rely on legal advice privilege, he held that:

  • The client consists only of those employees authorised to seek and receive legal advice from the lawyer.
  • Legal advice privilege does not extend to information provided by employees and ex-employees to or for the purpose of being placed before a lawyer.

The judge also acknowledged some of the criticisms of Three Rivers (No 5) and noted that it may need to be considered by the Supreme Court in due course.

Interestingly, the restrictive definition of client in the context of legal advice privilege was rejected by the Court of Appeal in Hong Kong last year. In this case, the court  found that the client for privilege purposes was simply the corporation.

We have also published an article by Colin Passmore, Senior Partner at Simmons & Simmons, in which he offers his thoughts on the implications of the decision.


Practical Law In-house Robert Clay

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