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Laura O'Gorman - In-house legal advice privilege
– 5 propositions
Civil Aviation Authority v R (Jet2.Com Limited)
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In Civil Aviation Authority v R (Jet2.Com Limited) [2020] EWCA Civ 35, [2020] 2 WLR 1215the English Court of Appeal considered in-house legal advice privilege (“LAP”). In a unanimous judgment, the Court of Appeal again criticised Three Rivers[1] for unduly narrowing the scope of LAP during the period when instructions are being formulated.[2] On the other hand it also determined that a “dominant purpose” test applies for LAP, which may be difficult to satisfy when emails have multiple recipients participating for mixed purposes.
The Court of Appeal discussed five propositions:
In-house lawyer: Legal advice privilege can apply to communications with an in-house lawyer.[3]
Dissemination: It also covers the client’s own record of advice and any communication passing on, considering or applying that advice (subject to issues of waiver).[4]
Multiple hats: It only applies to the extent that the in-house lawyer was engaged in providing legal advice, as opposed to other professional or commercial advice.[5]
Collation of materials: In contrast with the wide protection for dissemination, privilege for collation of materials when formulating instructions only protects those particular employees tasked with seeking and receiving legal advice on behalf of the company.[6]
Purpose: The communication must be “in a legal context”, but otherwise “legal advice” is widely defined (recognising the practicalities of a continuum of communication).[7] For LAP to apply to a particular communication or document, the proponent must show that the “dominant” purpose was to obtain or give legal advice in that wider sense.[8]
If it were free to depart from Three Rivers, the Court of Appeal would have rejected the fourth proposition, for reasons of principle and practical application:[9]
it does not cater for the practicalities affecting large national or international corporations (it places them at a disadvantage compared with smaller entities);[10]
an unduly narrow approach is inconsistent with the underlying policy of legal privilege because it inhibits the process of assembling instructions with proper input from senior executives and knowledgeable employees;[11]
it is out of line with the law in respect of dissemination of the advice (ie proposition 2 above);[12] and
it departs from the approach taken in other common law countries.[13]
In respect of the fifth proposition, the Court of Appeal held that a “dominant” purpose test applies to LAP, not just litigation privilege.[14] The jurisprudence was far from straightforward, but such a “dominant” purpose test seemed to have been assumed in numerous cases and texts.[15] Reasons in favour included the following:
While the policy underlying privilege is important, it must be balanced against the public interest in facilitating a fair trial. It would be contrary to that objective to enable swathes of material to be withheld simply because a lawyer has been copied in and asked for advice.[16]
There was no compelling rationale for litigation privilege to have a different type of purpose test.[17]
While the position in common law countries is not uniform, a “dominant” purpose test applies in Australia, Singapore and Hong Kong,[18] suggesting that such a test is workable in practice. There is an advantage in consistency.
Applying the above principles, the Court of Appeal provided the following guidance:
In respect of a multi-addressee email sent simultaneously to various individuals for their advice/comments, the purpose of the communication needs to be identified. In that exercise, the wide scope of “legal advice” and the concept of a continuum of communications must be taken fully into account. If the dominant purpose is to settle instructions to the lawyer, then (subject to proposition 4) the email will be covered by LAP. On the other hand, if the dominant purpose is to obtain the commercial views of the non-lawyer addressees, then the email will not be privileged even if a subsidiary purpose is to obtain legal advice.[19]
The response will almost certainly be privileged, even if copied to multiple recipients.[20]
Also, where a communication might realistically disclose legal advice, then that communication will in any event be privileged.[21]
Separate consideration needs to be given to any attachments (a non-privileged document does not become so simply because it is sent to lawyers, even as part of a request for legal advice).[22]
In New Zealand, s 54 of the Evidence Act 2006 governs LAP in the context of court proceedings. Common law concepts remain relevant for interpreting s 54,[23] and for circumstances other than court proceedings.[24]
Unlike s 56 (about litigation privilege), s 54 does not include the word “dominant”. Despite this drafting distinction, a recent case reflects an assumption that a “dominant” purpose test also applies for LAP.[25] It would be prudent to assume that s 54 might be interpreted that way, consistent with Civil Aviation Authority v R (Jet2.Com Limited) and the approach taken in other common law countries (including Australia).
Three Rivers has generally been cited with approval in New Zealand.[26] However, there has not been any express acceptance of proposition 4. Civil Aviation Authority v R (Jet2.Com Limited) provides persuasive reasons for not following that aspect in New Zealand.
This case highlights the risks of internal emails, particularly group ones. Corporates often assume that internal emails will not be discoverable if the in-house lawyer is a recipient. Such a generalisation is unsafe. Whether LAP applies depends on the role of the in-house lawyer for the purposes of that particular communication, and whether the reason for including other recipients is in fact more significant (eg dealing with the commercial issues). There is a real danger that privilege can be destroyed by combining these purposes in a single group email for the sake of expedience.
[1] Three Rivers Council v The Governor and Company of the Bank of England (No 5) [2003] EWCA Civ 474; [2003] QB 1556; Three Rivers Council v The Governor and Company of the Bank of England (No 6) [2004] UKHL 48; [2005] 1 AC 610.
[2] The Court of Appeal made similar criticisms in Director of the Serious Fraud Office v Eurasian Natural Resources Corporation Limited [2018] EWCA Civ 2006; [2019] 1 WLR 791 at [123] to [130].
[3] Civil Aviation Authority v R (Jet2.Com Limited) [2020] EWCA Civ 35 at [44]. However, note that in New Zealand the in-house lawyer must hold a practising certificate at the time the advice is given: Evidence Act 2006, s 51(1) and Lawyers and Conveyancers Act 2006, s 6.
[4] Civil Aviation Authority v R (Jet2.Com Limited) [2020] EWCA Civ 35 at [45].
[5] Civil Aviation Authority v R (Jet2.Com Limited) [2020] EWCA Civ 35 at [46]. The same proposition was discussed in NZ Iron Sands Holdings Ltd v Toward Industries Ltd [2019] NZAR 1199 at [27].
[6] Civil Aviation Authority v R (Jet2.Com Limited) [2020] EWCA Civ 35 at [47] to [59].
[7] Civil Aviation Authority v R (Jet2.Com Limited) [2020] EWCA Civ 35 at [60] to [69], endorsing Balabel v Air India [1988] Ch 317 at 330D to 331A.
[8] Civil Aviation Authority v R (Jet2.Com Limited) [2020] EWCA Civ 35 at [96].
[9] Civil Aviation Authority v R (Jet2.Com Limited) [2020] EWCA Civ 35 at [56] and [57].
[10] Civil Aviation Authority v R (Jet2.Com Limited) [2020] EWCA Civ 35 at [55] and [56], endorsing comments in Director of the Serious Fraud Office v Eurasian Natural Resources Corporation Limited [2018] EWCA Civ 2006; [2019] 1 WLR 791 at [127].
[11] Civil Aviation Authority v R (Jet2.Com Limited) [2020] EWCA Civ 35 at [56](i).
[12] Civil Aviation Authority v R (Jet2.Com Limited) [2020] EWCA Civ 35 at [56](ii).
[13] Director of the Serious Fraud Office v Eurasian Natural Resources Corporation Limited [2018] EWCA Civ 2006; [2019] 1 WLR 791 at [129].
[14] Civil Aviation Authority v R (Jet2.Com Limited) [2020] EWCA Civ 35 at [96], disagreeing at [88] to [90] with earlier dicta comments of the Court of Appeal in Eurasian Director of the Serious Fraud Office v Eurasian Natural Resources Corporation Limited [2018] EWCA Civ 2006; [2019] 1 WLR 791 at [132].
[15] Civil Aviation Authority v R (Jet2.Com Limited) [2020] EWCA Civ 35 at [80], [81] and [96].
[16] Civil Aviation Authority v R (Jet2.Com Limited) [2020] EWCA Civ 35 at [93(i)].
[17] Civil Aviation Authority v R (Jet2.Com Limited) [2020] EWCA Civ 35 at [95(i)].
[18] Civil Aviation Authority v R (Jet2.Com Limited) [2020] EWCA Civ 35 at [75] and [95(ii)], referring to AWB Limited v Cole [2006] FCA 571.
[19] Civil Aviation Authority v R (Jet2.Com Limited) [2020] EWCA Civ 35 at [100(ii)].
[20] Civil Aviation Authority v R (Jet2.Com Limited) [2020] EWCA Civ 35 at [100(iii)].
[21] Civil Aviation Authority v R (Jet2.Com Limited) [2020] EWCA Civ 35 at [100(vii)].
[22] Civil Aviation Authority v R (Jet2.Com Limited) [2020] EWCA Civ 35 at [107]. See also NZ Iron Sands Holdings Ltd v Toward Industries Ltd [2019] NZHC 1416, [2019] NZAR 1199 at [29], citing Simunovich Fisheries Ltd v Television New Zealand Ltd [2008] NZCA 350 at [165] and [169].
[23] The Law Commission, in its report Evidence Volume 1: Reform of the Law (NZLC R55, 1999) at [254], said that it essentially aimed to re-enact the common law on privilege for communications with legal advisers, as noted in M A v Attorney-General [2009] NZCA 490 at [26].
[24] Evidence Act 2006, s 53(5).
[25] See NZ Iron Sands Holdings Ltd v Toward Industries Ltd [2019] NZHC 1416, [2019] NZAR 1199 at [36]: “The application of the law relating to the scope of legal advice privilege … is not always simple. The dominant purpose for the creation of the document may not always be clear …”.
[26] See NZ Iron Sands Holdings Ltd v Toward Industries Ltd [2019] NZHC 1416, [2019] NZAR 1199 at [28] and [29]; Public Trust v Hotchilly Ltd HC Wellington CIV-2009-485-000704, 31 March 2010 at [16].