Legal Advice Privilege Clarified by the Commercial Court - but Appeal is Pending

Profession:Herbert Smith
 
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A recent Commercial Court decision has confirmed that legal advice privilege is not restricted to communications between a solicitor and client. The privilege extends to protect material brought into existence with the dominant purpose of obtaining legal advice, even if it is not an actual communication between a solicitor and client. For example, working papers and draft documents created with the dominant purpose that their contents be used to obtain legal advice will be protected, provided they are internal confidential material.

Background

This decision of Tomlinson J in Three Rivers District Council and Ors v The Governor and Company of the Bank of England [2002] EWHC 2730 (COMM) was made in the course of ongoing litigation which has followed the collapse of the Bank of Credit and Commerce SA (BCCI) in 1991. After the collapse of BCCI a wide-ranging inquiry was undertaken by Lord Justice Bingham in part to consider whether the action taken by the UK authorities in relation to BCCI had been appropriate and timely. The Bank of England (the "Bank") appointed three Bank officials to deal with all communications between the Bank and the inquiry. They became known as the Bingham Inquiry Unit (BIU).

The claimants, former depositors in BCCI, subsequently issued these proceedings against the Bank. The primary claim is misfeasance in public office by officials of the Bank in their handling of the BCCI crisis. During the course of these proceedings, the Bank asserted legal advice privilege over a large number of documents generated by the BIU. The claimants applied for a declaration that legal advice privilege did not apply to the material generated by the BIU which were not actual communications between a solicitor and client.

Decision

Tomlinson J found in favour of the Bank and held that the material was protected by legal advice privilege. In coming to this conclusion, Tomlinson J considered in some detail the particular facts of this case and then examined the relevant authorities.

Facts

The BIU's communications with the inquiry were all the subject of extensive legal advice from solicitors and counsel. According to the Bank, this advice covered every aspect of preparation and presentation of the Bank's submissions to, evidence for and responses to requests from the inquiry.

The BIU's role was to obtain, at the request of the legal advisers, all necessary information to enable the legal advisers to advise on the way in which the Bank's...

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