04/02/2019

The construction sector is a sector where the necessity to obtain specialist advice may be sought by construction personnel (for example Employers or Contractors) from their respective lawyers or third party experts, whether for a dispute or a specialist regulatory investigation.

However, there is sometimes a tension between a desire to ensure that advice is properly disseminated within the company or organisation, and ensuring that the document remains privileged.

What is and isn’t privileged is a question which continues to vex parties and be tested in the courts. We set out below some useful tips to ensure that privilege is not inadvertently waivered.

What is privilege? 

Privilege entitles a party to withhold a document from inspection by the court or the other side. It means that companies and organisations can be candid with their advisors, and be advised accordingly. It is therefore a valuable right.

There are a number of types of privilege, including:

  1. Legal advice privilege - this applies to confidential communications between clients and their lawyers, where the document has been created for the purpose of the client obtaining legal advice;
  2. Litigation privilege - this applies to communications between the lawyer and the client or between either of them and a third party (such as an expert), where the communication has been made for the dominant purpose of litigation;
  3. Without prejudice privilege – this enables parties to conduct settlement negotiations without any adverse inferences being drawn; and
  4. Common interest privilege – this can arise where a document is disclosed to a third party with a common interest in the subject matter.

What can you do to protect privilege?  

1. Who is the client?

This is particularly important for companies seeking legal advice. Who is the “client” will be a question of fact, and it should not be assumed that the definition of “client” will encompasses all of the employees of the company seeking legal advice. In Three Rivers (No 5)[i] the “client” was narrowly construed by the Court of Appeal to mean only those individuals within the company who are authorised to instruct lawyers and receive legal advice on behalf of the company seeking legal advice. This narrow definition was upheld in RBS[ii].The definition of the “client” was considered recently in SFO v Eurasian Natural Resources Corporation Ltd[iii]. The Court of Appeal made it clear that if it had been open to them to depart from Three Rivers (No 5), they would have been in favour of doing so. However, in order of the court to depart from Three Rivers (No 5), the definition of the “client” will have to be considered by the Supreme Court. 

2. Emails count!

The ease and swiftness of communication provided for by both emails and texts make these forms of communication more appealing to use. This can be a disadvantage when it comes to privilege. “Documents” are not just reports and memoranda, but encompass all electronic documents, including email and texts.

3. Beware of the “CC” 

The type of privilege which will attach to a document is dependent on its purpose. Therefore, by cc'ing in a lawyer, this will not automatically give rise to the contents of that email being considered privileged.

4. Protect confidentiality

Privilege only attaches to documents which are confidential. A document which has ceased to be confidential cannot be privileged. With a view to maintaining confidentiality, documents should be marked "strictly confidential". You should also ensure that you have control of who is able to view the document as this will minimise the risk of privilege being inadvertently waivered.

5. Don’t waive privilege 

Documents inadvertently sent to the wrong person, such as the other side, can mean privilege is waived. It is therefore sensible to use the heading "subject to legal professional privilege" (i.e. "strictly confidential and subject to legal professional privilege"), where appropriate. Whilst this will not be determinative as to whether privilege attaches, in circumstances where there is genuine ambiguity such a label may tip the balance.

6. The limits of “without prejudice”

Attributing the wording “without prejudice” does not make a document privileged or confidential. Communications are only “without prejudice” if they contain a genuine offer to settle.

Conclusion 

When it comes to privilege, it is content, rather than form, which is important.

Where you are an employee of a company seeking legal advice always make sure that you are authorised to seek and receive legal advice on behalf of the company.

Privilege can have many potential pitfalls. If you are unsure about whether a document is privileged and/or the consequences of privilege, we can assist.

 

 

[i] Three Rivers District Council and Others v Governor and Company of the Bank of England (No 5), [2002] EWHC 2730 (Comm)

[ii] Re: The RBS Rights Issues Litigation [2016] EWHC 3161 (Ch)

[iii] Director of the Serious Fraud Office v Eurasian Natural Resources Corporation Ltd [2018] EWCA Civ 2006