English Commercial Court confirms that legal advice privilege applies to foreign lawyers including those who work in-house

Background

In PJSC Tatneft the second defendant made an application for disclosure of communications between the claimant and its in-house lawyers who were located in Russia, challenging the submission by the claimant that legal advice privilege protected communications between it and members of its internal legal department. The court dismissed the application and upheld the right of both foreign based lawyers and foreign based in-house lawyers to be protected by legal advice privilege.

The Court’s ruling

The Court dismissed the application on the following grounds:

1. It is in the public interest that communications between clients and their lawyers remain confidential and are kept secure from the scrutiny from others (Three Rivers (No 6) [2005] 1 AC 610 [at 34]);
   
   
2. In R (Jet2.com Ltd) v Civil Aviation Authority [2020] EWCA Civ 35, the Court of Appeal recently confirmed that legal advice privilege applies to all communications made in confidence with professional legal advisers for the dominant purpose of giving or obtaining legal advice including communications with in-house lawyers;
   
   
3. It is consistent with the public interest rationale in (1) that legal advice privilege is extended to foreign lawyers and this is regardless of their local standards and regulations. There is no requirement under English law in this area that "foreign lawyers should be 'appropriately qualified' or recognised or regulated as 'professional lawyers'." (R (on the application of Prudential plc and another) v Special Commissioner of Income Tax [2013] UKSC 1 at [29] and [45]);
   
   
4. The judge stressed that categorising foreign lawyers differently to English qualified lawyers would "lead to uncertainty (and thus inconvenience) if, even where the relationship of lawyer and client subsists, the court had to go further and examine particular national standards or regulations in order to determine whether in a particular case a party was protected from the disclosure of his communications with his lawyer. It would also raise issues of comity if the court were obliged to express views on the qualifications and regulation of foreign lawyers";
   
   
5. Referring again to the Court of Appeal decision in R (Jet2.com Ltd) v Civil Aviation Authority the judge stated that the logical inference from this was that if legal advice privilege applied to foreign lawyers, it also applied to foreign in-house lawyers;
   
   
6. The judge concluded that legal advice privilege attaches because of the function of the relationship between the lawyer and client protecting the giving and receiving of legal advice freely. It does not depend on the status of the lawyer. This means as long as the lawyer acts in their professional capacity, in connection with the provision of legal advice (and in accordance with the definition of legal advice privilege), the advice will be protected.

A note of caution

As the court so clearly highlighted in this case, legal advice privilege is attached to the function and not the status of a lawyer irrespective of where that lawyer is located. Therefore, as long as lawyers (including in-house lawyers) act in their capacity as lawyers, their legal advice will be covered by legal advice privilege. However, an in-house lawyer may also undertake an executive, business and/or administration function as part of their work in a legal department; and such communication is not covered by privilege. Therefore, in-house lawyers, whether based in this jurisdiction or outside of it should always be aware, when communicating with those within their own organisation, and outside it, that not all their communications will be protected under English law; only those that fall within the definition of legal advice privilege.

As a side point, it is interesting to note that although the issue for the court related to the status of the lawyer, the court accepted at the outset the submission by the second defendant that the question of whether the communication was privileged should be decided as part of English, rather than Russian, procedural law. Although the judgment does not seem to go quite this far, it can be inferred that if the communication can be protected as privileged under English law, the fact that it is not privileged under the foreign law will carry little weight.  

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