Privilege: withholding inspection of documents in litigation

If a dispute arises and litigation proceedings are commenced, the Court adopts an 'all the cards on the table' approach to the resolution of the dispute.

As part of that approach, each party will generally be required to provide a list to the other party of all documents in its possession or control which are relevant to the issues in dispute. This process is known as 'disclosure'. The other party can then request to see, or receive copies of, the documents that have been disclosed. This process is known as 'inspection'. 

What is privilege?

If a document is privileged, it must still be disclosed, but the receiving party is not entitled to see it or receive a copy of it. Privilege, therefore, gives the disclosing party an absolute right to withhold inspection of the document in question. This is of fundamental importance in respect of documents which, for example, contain legal advice about the merits of the disclosing party's case.

There are various different types of privilege. This article provides an overview of two of the most common types of privilege, 'legal advice privilege' and 'litigation privilege'. We will explore other types of privilege, including 'without prejudice' privilege, in a later article.

Legal advice privilege

Legal advice privilege covers confidential communications passing between a solicitor and a client made for the purposes of obtaining, or receiving, legal advice.

The rationale is to allow clients to seek legal advice freely and without the risk that such communications could be made available to the other party further down the line. There is a concern that clients would otherwise be reluctant to place their unrestricted confidence in their legal advisors, thereby restricting their solicitors' ability to provide sound legal advice appraised of all the facts, and ultimately hindering the administration of justice.

Legal advice privilege is not available if the document in question is not confidential. The right to privilege will be lost where, for example, the document has been published on a freely accessible website, or circulated widely without restriction and without appropriate confidentiality obligations in place.

Where the client is a company, problems may arise in identifying which employees of the company the privilege covers. Following a number of high profile court decisions, the general position is that legal advice privilege only extends to those employees actually charged with giving instructions to lawyers and receiving advice. A party cannot, therefore, assume that all documents produced by its employees and sent directly to lawyers will necessarily be privileged.

Communication for the purposes of legal advice privilege is not restricted to advice on the law and will extend to commercial and strategic advice in the relevant legal context.

Litigation privilege

Litigation privilege covers confidential communications between a solicitor and a client or a third party, or documents created by or on behalf of the client or their lawyer, made for the dominant purpose of actual, or pending, litigation. 

The general principle behind litigation privilege is to enable a party the freedom to source evidence for use in the litigation, without being obliged subsequently to make this evidence available to its opponent.

Litigation privilege only applies to communications and documents which have been prepared for the dominant purpose of litigation. This can give rise to difficulties where documents have been created for a dual purpose. Accordingly, in assessing whether privilege attaches to a document, the purpose for which the document was created must be considered carefully.

The leading authority on the 'dominant purpose' test is Waugh v British Railway Board [1980] AC 52, in which the widow of a locomotive driver sought the disclosure of an internal report into a collision which led to her husband's death.  In that case, the House of Lords concluded that: “The report was prepared for a dual purpose: for what may be called railway operation and safety purposes and for the purpose of obtaining legal advice in anticipation of litigation, the first being more immediate than the second, but both being described as of equal rank or weight.” The document in question did not, therefore, qualify for litigation privilege, as it could not be shown that its dominant purpose was preparation for litigation.

In order for a document to attract litigation privilege, litigation must be a 'real likelihood', rather than just a possibility. So, the possibility that sooner or later someone might make a claim will not generally be sufficient.

Practical points

• Assessing whether privilege attaches to a document can be a complicated process. As soon as a dispute situation arises, avoid creating any new documents or correspondence that might be disclosable in subsequent litigation proceedings. It may be appropriate to inform your personnel not to communicate about the dispute at all, unless they are instructed to do so
• Steps can be taken to make the process of identifying potentially privileged documents easier. For example, it is a good idea to label communications relating to legal advice as 'confidential and legally privileged'. However, if Court proceedings are commenced, each document must still be considered on its face to assess whether or not it is actually privileged
• It is also sensible to avoid the unnecessary circulation of legal advice. A copy of a privileged document may not be deemed privileged if it is created for a non-privileged purpose. It could also result in the document losing its confidentiality, meaning that privilege will be lost
• If the circulation of privileged documents becomes unavoidable, it should only be done on confidential terms

Ultimately, in any situation which may give rise to litigation (and consequently disclosure), engaging specialist dispute resolution lawyers at the outset may help minimise the risk that, later down the line, potentially damaging documents will have to be disclosed to the other side.

For advice or guidance, please contact me on +44 (0)1752 675078 or email [email protected]