The principle of legal professional privilege has long been recognised in common law by the English Courts and is seen as a fundamental principle of justice.
Privilege works so as to grant protection to a party from having to disclose certain documents to a third party or the court. The case of R v Derby Magistrates Court ex parte B  1 AC 487 traces the development of the doctrine of legal professional privilege from its origins in the 16th century:
"The principle which runs through all these cases …. is that a man must be able to consult his lawyer in confidence, since otherwise he might hold back half the truth. The client must be sure that what he tells his lawyer in confidence will never be revealed without his consent. Legal professional privilege is thus much more than an ordinary rule of evidence, limited in its application to the fact of a particular case. It is a fundamental condition in which the administration of justice as a whole rests."
There are two types of legal professional privilege: legal advice privilege and litigation privilege.
Legal advice privilege protects confidential communications (and evidence of those communications) between a lawyer and his client (but not communications with third parties) provided that the communications are for the purpose of giving or receiving legal advice in a relevant legal context.
Litigation privilege protects confidential communications (and evidence of those communications) between a lawyer and his client and/or a third party or between a client and a third party, provided that such communications have been created for the dominant purpose of obtaining legal advice, evidence or information in preparation for actual litigation, or litigation that is “reasonably in prospect”.
Once privilege has been established, an absolute right to withhold the document in question arises. However, the principle does have its limitations, one of these being what has become known as the “iniquity exception”.
The iniquity exception to privilege is also known as the ‘crime-fraud exception’. However, the description of this rule as the ‘crime-fraud exception’ is misleading: first, because it is not restricted to criminal or fraudulent activities, and second because it is not an exception to privilege, but rather a situation in which privilege does not arise at all.
The origin of the exception was summarised in Kuwait Airways Corpn v Iraqi Airways Co (No 6)  1 WLR 2734 as: where a person consults a solicitor in furtherance of a criminal purpose then, whether or not the solicitor knowingly assists in the furtherance of such purpose, the communications between the client and the solicitor do not attract legal professional privilege.
Popplewell J in the case of JSC BTA Bank v. Mukhtar Ablyazov and others  EWHC 2788 (Comm) summarised the basis for the exception in the context of legal advice privilege in the following terms: ‘If the iniquity puts the advice or conduct outside the scope of such [normal] professional engagement, or renders it an abuse of the relationship which properly falls within the ordinary course of such an engagement, a communication for such purposes cannot attract legal professional privilege.
‘In cases where a lawyer is engaged to put forward a false case supported by false evidence, it will be a question of fact and degree whether it involves an abuse of the ordinary professional engagement of a solicitor in the circumstances in question.’
An example would be person A pretends to be person B, person A instructs a solicitor to draw a will in the name of person B, person A executes the will in the name of person B, pays the solicitor and takes away that will. The solicitor was not employed in the ordinary scope of professional employment. On the contrary, the solicitor is made an unconscious and unwitting instrument in the commission of a crime.
In theory, the exception sounds like a potentially very useful tactical card for solicitors to have up their sleeves as a way of attacking privilege in order to obtain documents that they think might be useful to their case. But if one starts to consider the potential application of the exception in practice, it soon becomes quite clear that the scope of its application is fairly limited.
Courts guard privilege jealously and only in exceptional circumstances will it be displaced. An application to the court under the iniquity exception is a step to be taken with the utmost care, and the party making the application should be in possession of, at the very least, strong prima facie evidence of iniquity if it is to have any prospect of success. We would question its effectiveness in cases other than those where a finding of fraud or criminality has already been made against the party in question in closely related proceedings.
The cases in this area suggest that misleading lawyers or putting forward a case which is subsequently disbelieved is unlikely to be enough in itself for the iniquity exception to apply; something more is required. In the Kuwait Airways case, for example, there had been a widespread conspiracy to deceive the English court which had led to “the perversion of justice on a remarkable and almost unprecedented scale”.
However, the existence of this exception should act as a warning to people to think twice about abusing the relationship of trust and confidence between them and their solicitor in order to further underhand conduct.