In Financial Services Compensation Scheme Ltd v Abbey National Treasury Services Plc – Lawtel 11.12.07 the applicant applied for disclosure by the respondent of parts of documents which had been redacted on grounds of legal professional privilege.

The redacted parts of the document were various questions, the respondent submitting that some of the questions identified the narrow questions on which its legal department had advised whilst the answers to those questions revealed the substance of the legal advice given; that the narrative sections of the documents evidenced the substance of the legal advice given by its legal department to the claims teams; and that the substance of its advice could be inferred from a further question.

It was held that legal advice privilege applies to communications for the purpose of receiving legal advice with a lawyer in independent practice and also with an in-house lawyer employed by the client. It applies to communications by a client to his lawyer, made for the purpose of, or in the course of, obtaining advice, as well as to communications from the lawyer. It extends to any record of the advice within the client's organisation, whether by way of copy, summary or paraphrase and it does not matter whether the record was made for a communication within the organisation, for use within the organisation or purely as a record.

In this case the argument that two of the questions identified the narrow questions on which respondent’s legal department had advised justified the claim to privilege. The redactions from the narrative sections unequivocally stated the advice received from the legal department and privilege was correctly claimed for them.

As regards the paragraph from which it was suggested that legal advice could be inferred, it was held that none of the authorities dealt with the case of a document that, rather than stating the substance of the advice, was a document from which it was said that the advice could be inferred. Unless the inference was obvious and inevitable, in which case the document was in substance a statement of the advice, privilege did not attach to such documents. It was the communication between the client and lawyer which was privileged either in its original or summarised form. A document that did not contain the communication in any form contained nothing to which privilege attached.

However, in this case it made no sense to distinguish between the three different questions and so the respondent’s claim to privilege in respect of them all was upheld, although, obiter, the court said that in future it would encourage a plainer statement of the basis of the claim and an avoidance of more general assertions that a document "evidenced" or "revealed" the substance of advice.