REUTERS | Lee Jae-Won

Legal advice privilege limited to lawyers

Last week, the Supreme Court handed down its judgment in R (Prudential plc and another). It may not have come as a surprise that the court held, by a majority of 5:2, to limit to members of the legal profession the right to claim legal advice privilege (LAP).

Prudential judgment

Lord Neuberger’s leading judgment started by explaining the issues the court had to consider:

  • In this specific case, could a company refuse to comply with a statutory notice from an inspector of taxes to produce documents in connection with its tax affairs, where the legal advice was given by accountants in relation to a tax avoidance scheme? In other words, was the accountants’ advice covered by LAP?
  • More generally, does LAP extend, or should it be extended, to apply to legal advice given by someone other than a member of the legal profession?

The court decided that the answer to both the specific and general question was no, LAP did not apply and the rules were not going to be extended to other professions. In reaching this conclusion, Lord Neuberger noted that it is universally believed that LAP only applies to communications in connection with advice given by members of the legal profession (paragraph 29, judgment). He went on to discuss the development of the common law:

“There is no doubt that the justification for LAP is as valid in the modern world as it was when it was first developed by the courts. However, its restriction to advice from members of the legal profession, while it can fairly be said to be illogical in the modern world, is explicable by reference to history.”

He explained this by reference to the fact that it used to be “rare for any professional person other than a lawyer to give legal advice” (paragraph 49, judgment).

This latter point got me thinking about all the professionals that give legal (or quasi-legal) advice nowadays and what, if any, impact this judgment will have on them. Specifically, I am thinking about surveyors who give advice on construction disputes (or dispute avoidance) and represent parties directly. It could also impact on surveyors who are appointed as advisors before being appointed as experts.

Looking at it from a surveyor’s point of view

I think I’m fairly clear on the rules of privilege and can distinguish between LAP and litigation privilege (litigation privilege applies when a party seeks legal advice and litigation is pending, reasonably contemplated or on-going). However, I think that some surveyors will not know the difference between these types of privilege and may be under the mis-conception that all of their advice is non-disclosable (or privileged), regardless of whether there is a dispute and their role.

Perhaps this confusion is unsurprising since privilege is a complex topic and full of shades of grey. I guess some questions surveyors might ask themselves are:

  • At what point is litigation “reasonably contemplated”, and does this privilege apply to other forms of dispute resolution?
  • At what point am I an expert, rather than an advisor?

The concept of privilege does feature in guidance published by the RICS. For example, in the guidance note on surveyors acting as expert witnesses, not only are the terms defined, but there is reference to the fact that if a surveyor is appointed to give advice (to act as an advisor) rather than as an expert witness, that advice may be “liable to disclosure”. The guidance suggests that a surveyor seeks legal advice on the question of disclosure, if in doubt, and highlights the fact that simply sending your advice to a solicitor will not cloak that advice with privilege. We are also encouraged to inform our clients (if appointed directly) that litigation privilege may not apply to communications with them.

The guidance note on surveyors acting as advocates goes further, and includes a whole section on “disclosure and privilege”. In addition to defining the terms, it also explains that if you act as a surveyor-advocate, the communications with your client will not be privileged (that is, there is no LAP). Only if the communications attract litigation privilege will they be protected from disclosure.

As I see it, nothing in the Prudential judgment changes this advice to surveyors.

Claims consultants and Walter Lilly

The question of what happens to the advice given by claims consultants was considered by Akenhead J in Walter Lilly & Company Ltd v Mackay and another. He held that the claims consultant’s documents were not covered by LAP. This was the case even though the person giving the advice was a qualified barrister (but not practising as one).

I discussed the Walter Lilly judgment at the time, noting that 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”.

I also looked at disclosure and privilege in adjudication proceedings after Walter Lilly. As I predicted at the time, I haven’t seen any changes in disclosure practices in adjudication and I don’t anticipate any following the Prudential judgment.

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