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There is now a “dominant purpose” test for legal advice privilege – some practical points for accounting practices

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By Richard Highley & Julian Bubb Humfryes


Published 30 March 2020


Litigation’ privilege has long been subject to a ‘dominant purpose’test. For a document to be privileged, the dominant purpose for its creation must have been for use in relation to contentious proceedings (either in existence or reasonably in contemplation). For a long time, this feature of litigation privilege distinguished it from legal advice privilege (communications privileged due to their seeking and/or disclosing any legal advice, whether in contemplation of proceedings or not).

But no longer. The Court of Appeal has confirmed in The Civil Aviation Authority v The Queen on the application of Jet2.com Ltdthat legal advice privilege is also subject to a ‘dominant purpose’ test. In doing so, the Court has confirmed that legal advice and litigation privilege are two limbs of the same privilege, and similar considerations apply. This approach also takes the English Court closer to that adopted in other significant common law jurisdictions – Australia, Singapore etc.


The position following this decision

It has always been the case that no privilege applies to communications from in-house lawyers expressing their commercial – rather than legal – advice. Nor does simply copying in a lawyer to, say, an email render a communication privileged.

By that same token, having a lawyer attend a meeting does not draw a veil of privilege over the whole of that meeting – especially if the lawyer is only ‘standing by’ in case needed, or attending to offer their commercial views. A meeting note containing both legal advice and general commercial matters should be clear as to what is a record of discussions relating to legal advice. That will simplify a claim for privilege over the ‘legal’ parts.

So what has changed as a result of the decision?

The Court deals with the practical situation where a single email is copied to a number of recipients – both lawyers and non-lawyers. The Court, on balance, preferred to consider this email to be a number of bilateral communications between the sender and each recipient individually. But it is hard to see how that would change a privilege decision in practice on a given email, for reasons summarised below.

The Court emphasised that legal advice privilege applies to a ‘continuum’ of communications on what a client should do in a relevant legal context. Legal advice privilege will continue to apply to communications disseminating legal advice, and to material sent to a lawyer to keep them up to speed with developments. Also, a client does not need to explicitly request legal advice for the communication to be privileged. It is enough to send material to a lawyer for legal comment if the lawyer considers this appropriate.

A problem arises where a communication is sent partly for the purpose of seeking legal advice, but that is not the dominant purpose. That will fall to be dealt with on a case-by-case basis, and the Court offered no real guidance on the topic.

However, the judgment did suggest that the Court would be reluctant to engage in nit-picking on this point, and would lean in favour of privilege in marginal cases: “… whilst the dominant purpose test applies, given the wide scope of "legal advice" and "continuum of communications", the court will be extremely reluctant to engage in the exercise of determining whether, in respect of a specific document or communication, the dominant purpose was the provision of legal (rather than non-legal) advice. It is difficult to conceive of many circumstances in which such an exercise could be other than arid and unnecessary.”

Finally, the Court reiterated that the mere fact of sending a document to a lawyer (as an attachment to an email, for instance) did not mean that the document ‘became’ privileged. From a practitioner’s perspective, the metadata on that document might mean that the iteration sent to the lawyer is privileged… but the original version will not be. Ink will no doubt be spilt on such fine points of detail in inter-solicitors correspondence, but the thrust of the judgment seems clear enough.


Considerations for accounting practices

Save for a bonfire of newly obsolete textbooks – what does this mean in practice for the accounting practices? This is particularly important for auditors in the current regulatory environment.

  1. There is at least recent clarity for auditors in possession of privileged information provided by their audit clients. Auditors can take comfort from the recent Court of Appeal decision in Sports Direct International Plc v FRC [2020] EWCA Civ 177 (see our article here).
  2. There will be challenges as a result of this decision where a client sends an email to both an accountant and a lawyer, seemingly seeking both legal and accounting advice. The question of ‘dominant purpose’ will now be looked at. Is part of the email directed to the lawyer (and hence privileged) but part of the email directed to the accountant (and hence not privileged)? Is it impossible to separate these parts and, if so, is the whole email privileged or none of it? We can see some difficulty applying the dominant purpose test and challenges in the courts to claims for legal advice privilege over the whole email.
  3. The following two areas stand out to us as especially likely to throw up problems. First, tax planning – advice is frequently dependent on both accounting and legal judgments. Second, provisioning in a company's accounts to recognise exposure to litigation (both upside and downside) – care must be taken over how privileged legal advice feeds into accounting judgments.
  4. The modern regulatory environment places significant emphasis on a firm’s taking remedial action in response to any investigation. In particular, firms are encouraged to undertake a ‘root cause analysis’. Legal advice given during this process should mean documents created for the purpose of that advice attract privilege but we foresee regulators questioning whether communications involving lawyers in the remediation process were created for the ‘dominant purpose’ of legal advice, or whether this is subsidiary to a ‘remedial purpose’ or a ‘governance purpose’. We anticipate that the Courts will take a broadly sympathetic view towards claims for privilege, particularly where litigation privilege may apply because regulatory action is anticipated against the firm. But at the margins, there are undoubtedly grey areas which will lead to claims for privilege being challenged.


1] [2020] EWCA Civ 35