On 24 January 2024, the Court of Appeal of England and Wales issued a judgment in the case Al Sadeq v. Dechert LLP [2024] EWCA Civ 28 that clarifies several important principles relating to the scope of legal professional privilege, particularly in cases where an exception for inequity is raised.
From “Legal Professional Privilege” to “Secret Professionnel”
“Legal privilege” in Common Law countries and “secret professionnel” in the continental tradition protect the confidentiality of communications between client and lawyer, in order to enable legal professionals to provide their advice in the most effective manner.
Confidentiality concerns both the secrecy of communications between client and lawyer, which prevents, for example, the lawyer from disclosing information provided by his client, and the protection of the lawyer who cannot be compelled in court to testify against his client.
In English law, Legal Professional Privilege is divided into two main categories: legal advice privilege, which covers communications between lawyer and client made for the exclusive or predominant purpose of giving or receiving legal advice, and litigation privilege, which concerns communications between lawyers or their clients and any third party for the purpose of obtaining advice or information in relation to an existing or reasonably anticipated dispute.
In Italy, legal professional privilege is recognized for lawyers registered with the bar, but not for in-house lawyers. In the United States, legal privilege applies to both internal and external counsel, whereas in the United Kingdom in-house lawyers enjoy “legal advice privilege“. In France, there is still an ongoing heated debate for the approval of legislation that would also allow in-house lawyers to benefit from this privilege. In Germany and Spain there have been recent changes to extend legal privilege to in-house lawyers as well.
Decision of the Court of Appeal
In the judgment of 24 January 2024, the Court of Appeal of England and Wales expressed useful clarifications on the scope of legal professional privilege.
First, it clarified the circumstances in which an exception for inequity may be raised. Legal professional privilege is waived in prima facie cases of inequity – assessed on the basis of a balance of probabilities analysis. In these circumstances, professional privilege is waived for documents created both in the course of an activity considered probably inequitable, and to favour or disclose it.
Second, the Court of Appeal held that whoever claims legal professional privilege in the dispute need not necessarily be a party to the proceedings. A person who is not a party to an existing or anticipated dispute may assert legal professional privilege over a document, provided that it was prepared with the principal purpose of seeking legal advice, evidence or information.
Third, it established that the so-called “Three Rivers” principle, which derives from the Court of Appeal’s decision in 2003 in the case Three Rivers District Council v. Governor and Company of the Bank of England (No. 5) – by virtue of which only communications between a lawyer and representatives of the client instructed to obtain legal advice are subject to legal advice privilege – does not apply to privilege relating to disputes.
Finally, according to the Court, in order for legal professional privilege to be recognized, it is necessary to demonstrate that the principal purpose of the communication is the provision of legal advice by a lawyer.
As regards, finally, lawyers engaged in investigations, the Court held that legal advice is not limited solely to opinions on legislation and its application to the case at hand, but extends also to all communications concerning the practical aspects of legal proceedings and their preparation.
