High Court again considers who is the "client" for legal advice privilege and whether Three Rivers can be distinguished/choice of law governing privilege issues

The defendant sought to claim legal advice privilege over transcripts and records of interviews which took place between its in-house lawyers and its employees (and ex-employees) before litigation was in contemplation. Privilege was claimed on the basis that the employees had been authorised to communicate with the lawyers for the purpose of his or her employer seeking legal advice.

This issue required an examination of the Court of Appeal's decision in Three Rivers (No.5) [2003] and the meaning of who is the "client" for the purpose of legal advice privilege. This case is the second High Court decision in three weeks to consider this question.

In Three Rivers (No. 5) [2003], the Court of Appeal ruled that not all officers and employees within a company should be treated as the "client" for the purposes of legal advice privilege. Only those employees within the organisation who are dealing with the matter on which the lawyer is giving advice will be the “client”. No privilege will attach to communications passing between the lawyers and anyone else within the organisation outside the nominated group. This is of particular practical importance where in-house or external lawyers are seeking factual information about a problem from employees within the client organisation before litigation is in reasonable prospect.

In Astex Therapeutics v Astrazeneca, Chief Master Marsh reaffirmed the position in Three Rivers (No 5), holding that only interviews which took place with employees who could be said to be the "client" for the purposes of giving instructions (eg board members) would be covered by the privilege. However, no reference was made to the 2014 High Court decision of AB v Ministry of Justice, in which Baker J sought to distinguish Three Rivers (No.5) on the basis that in that case the client organisation itself had chosen to arrange its affairs so that only a separate group was specifically responsible for seeking legal advice. Baker J suggested that the position would be different where no separate entity had been established but instead an individual within the client organisation was authorised to seek and receive legal advice.

No reference was made to AB v Ministry of Justice in this case either, but Hildyard J noted that there has been academic criticism and disapproval in other jurisdictions of Three Rivers (No.5), in particular in the Court of Appeal in Singapore. He saw "force in these criticisms and attempts to confine the application of the decision in Three Rivers (No 5)" to its particular facts. He also said that "It may be that in a suitable case the Supreme Court will have to revisit the decision".

Nevertheless, he was bound by Three Rivers (No 5) and pointed out that the House of Lords in Three Rivers (No 6) had declined the invitation to express a view on this fundamental issue, when the argument was put to it: "There can be no real doubt as to the present state of the law in this context in England: Three Rivers (No 5) confines legal advice privilege to communications between lawyer and client, and the fact that an employee may be authorised to communicate with the corporation's lawyer does not constitute that employee the client or a recognised emanation of the client". Only those employees who are authorised to communicate with the company's lawyers in order to seek or receive legal advice will be the "client" for the purpose of claiming legal advice privilege.

The judge further suggested that "It may also be that in a corporate context only individuals singly or together constituting part of the directing mind and will of the corporation can be treated for the purpose of legal advice privilege as being, or being a qualifying emanation of, the 'client'". However, given his conclusion that legal advice privilege could not be claimed in this case, it was unnecessary for him to rule on this question.

A further argument raised by the defendant was that the interview notes were privileged lawyers' working papers. It was common ground that in English law, lawyers' working papers are privileged on the basis that they might give a clue to the advice which had been given by the solicitor.

However, verbatim transcripts of unprivileged interviews (and the interviews here were not privileged) would themselves not be privileged. The factual issue here, therefore, was whether the notes had "some attribute or addition such as to betray or at least give a clue as to the trend of advice being given to the client by its lawyer". The judge held that they did not.

The defendant's argument "does not address the objection that it cannot be that the mere fact that a note is not verbatim, and therefore may betray some selection or line of enquiry …., suffices. Something more is required to distinguish the case from the norm…..My conclusion is reinforced by the consideration that there is a real difference between reflecting "a train of inquiry" and reflecting or giving a clue as to the trend of legal advice" (emphasis added).

A further issue which had been raised by the defendant was which law governed the issue of privilege here. That was because the position in the US would possibly have been more favourable for its claim to privilege. The defendant suggested that the court was not bound by authority to apply the law of the forum (ie England) and instead proposed a new choice of law rule, which would apply the law of the place with which the engagement or instructions, pursuant to which the documents came into existence or the communications arose, have their closest connection (which would, in this case, have resulted in the application of US law).

Although the judge saw some force in the defendant's argument, nevertheless, the conventional understanding that the law of the forum applies had not been displaced.

Accordingly, the defendant was not entitled to claim legal advice privilege over the interview notes.