CITIC Pacific Limited v Secretary for Justice and another [2011] HKEC 1657
Summary
The Hong Kong court revisited the issues surrounding legal professional privilege in a case involving disclosure of documents by CITIC Pacific Limited (“CITIC”). This case provides useful guidance on the key principles of legal advice privilege and affirms the controversial interpretation of “client” in the English case of Three Rivers District Council v Bank of England (No 5) [2003] QB 1556.
Background
Legal advice privilege (“LAP”) attaches to all communications made in confidence between a client and his legal advisor for the purposes of giving or obtaining legal advice.
In Three Rivers, the Court held that not all employees could constitute the client for the purpose of claiming LAP over communications with legal advisers, rather only three individuals in the Bingham Inquiry Unit who were tasked with seeking and obtaining legal advice from external counsel, could claim LAP.
Issues
CITIC asserted LAP over a number of documents seized by the Hong Kong Commercial Crime Bureau in relation to an investigation by the Securities and Futures Commission (“SFC”). The SFC was investigating a profit warning announcement made in October 2008 of an estimated HK$14.7bn loss in relation to various forward contracts.
Decision
On the question of what amounted to LAP, the HK court grappled with the issue of who was the “client” for such purposes and sought guidance from the 2003 case of Three Rivers.
The HK court followed this approach and held that only those individuals within CITIC’s Group Legal Department (“GLD”) were deemed to be the “client” for the purposes of LAP. Any communications between external counsel and in-house lawyers in other departments, such as the company secretariat department, and members of the audit committee fell to be regarded as “third parties”, whose communications were incapable of attracting LAP.
This narrow interpretation of “client” was based on the HK court’s finding that, save in one instance, all communications with external legal advisers were routed through the GLD and it was therefore expressly or implicitly elected to liaise with external counsel on CITIC’s behalf. The exception to this was the Board of Directors of CITIC, as they were not employees and it was clear that the GLD acted under their direction.
The HK court also reiterated that documents created by the GLD which did not involve the seeking or receiving of legal advice were not privileged.
Comments
Although this HK judgment is not binding on the English courts, it provides useful guidance on the untested narrow position on who is the “client” for the purposes of claiming LAP over communications with legal advisers. In-house legal teams should be aware of the communication lines with legal advisers and all instructions should be channelled through the main legal team instructing the advisers. The judgment also contains some useful guidelines on how the HK court approached the question of whether LAP applied to minutes of meetings, emails with attachments and other documents which may be created in the course of an investigation.
