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Claims consultants beware

recently wrote about West Country Renovations v Mr & Mrs McDowell. While it wasn’t strictly necessary for the purposes of the case, Akenhead J produced a judgment providing guidance on the value and types of claims that the TCC in the High Court in London will deal with.

Continuing with the theme of providing helpful guidance, earlier this month Akenhead J produced a judgment following a disclosure application in Walter Lilly & Company Ltd v Giles Mackay and DMW Developments Ltd. The guidance in this judgment will be of particular interest to claims consultants and those that appoint them.

Walter Lilly & Company Ltd v Giles Mackay and DMW Developments Ltd

The claimant was employed by the defendants to construct a substantial house in London. The work started in 2004. However, delays were suffered and the defendants sought advice from Knowles Ltd, who was retained to provide “contractual and adjudication advice” up until around March 2008. The dispute was clearly a substantial one, which has ended up in the TCC, where the defendants are represented by a firm of solicitors.

While the defendants’ solicitor disclosed some of Knowles’ correspondence during the disclosure exercise, it claimed legal professional or legal advice privilege in respect of the remainder of the correspondence. Akenhead J therefore had to decide whether this correspondence attracted legal advice privilege.

The Court of Appeal has previously decided that legal advice privilege does not apply to any professional other than a qualified lawyer (R (Prudential plc and another) v Special Commissioner of Income Tax and another). Akenhead J said that, although the individuals at Knowles who provided the advice may have been legally qualified, Knowles was not retained as a solicitor or barrister and therefore the correspondence did not attract legal advice privilege.

At the end of his judgment Akenhead J expressed a very important caveat. He acknowledged that the case did not deal with litigation privilege and that:

“…there remains an outstanding possible issue as to whether or not advice and other communications given by claims consultants in connection with adjudication proceedings are privileged”.

Will we see changes to the way in which claims consultants present their advice?

The position as set out by Akenhead J is not necessarily new, as he was following the Court of Appeal’s 2010 decision in Prudential. However, up until now I wonder how many claims consultants, or those instructing them, were aware that correspondence concerning legal advice might not attract privilege? Relatively few I suspect.

I think there are a number of changes that we may see claims consultants adopt as a result of this case:

  • Adding “in connection with adjudication proceedings” to correspondence.
  • Using a solicitor and a claims consultant.
  • Claims consultants creating alternative business structures (ABS).

Adding “in connection with adjudication proceedings” to correspondence

Given Akenhead J’s comment about adjudication, I wouldn’t be surprised if we see correspondence from claims consultants expressly stating that it is “in connection with adjudication proceedings”, so as to attempt to attract litigation privilege.

However, claims consultants should be wary of relying on this too heavily because:

  • Akenhead J did not state that such correspondence attracts litigation privilege (that was an issue for another case on another day), he merely stated that legal advice privilege issues were resolved in this case.
  • Even if such correspondence could attract litigation privilege, whether it does or not will depend on the purpose of the document and not whether the document is expressly stated as being “in connection with adjudication proceedings”.

Using a solicitor and a claims consultant?

Claims consultants might want to advise their clients to appoint a solicitor through which advice could be channelled. However, this is likely to add unnecessary costs and the solicitor could, potentially, be liable to the client for the negligent advice of the claims consultant. Not a very attractive option to either one, I suspect.

Creating Alternative Business Structures

Claims consultants that employ solicitors might take advantage of the alternative business structures created under the Legal Services Act 2007 in order that they can provide legal advice as solicitors.

Either way, claims consultants need to be aware that their advice does not necessarily attract privilege and might have to be disclosed. In my next blog post, I’ll be talking about disclosure in adjudication and the effect of Walter Lilly & Company Ltd on it.

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