Avoiding the risk of inadvertent waiver of privilege

Published 7 August 2020

Legal professional privilege is a cornerstone of our legal system and entitles a party to resist the disclosure of confidential and potentially damaging written or oral evidence to a third party or the court. It is vital to appreciate the scope of this protection, as where privilege cannot be claimed the parties to litigation are required to disclose documents which are adverse to their case.

There are two main types of legal privilege:

(i) Legal advice privilege which attaches to confidential communications between lawyers and clients for the purpose of giving or obtaining legal advice. As recently confirmed in The Civil Aviation Authority v Jet 2. Com Ltd R (on application) 2020 EWCA Civ 35, to attract privilege, the dominant purpose of the communication must be to obtain or provide legal advice in a relevant legal context;

(ii) Litigation privilege which attaches to documents between a lawyer or client or third party used in connection with actual or pending litigation.  

Privilege can, however, be lost by deliberate or inadvertent or partial waiver. As a result of the potential consequences the loss of such a fundamental right the courts are careful to control the position. In the recent case of PCP Capital Partners LLP (1) PCP Capital Partners LLP v Barclays Bank Plc (2020) it was found that PCP were entitled to further disclosure on the basis that Barclays had waived privilege as a result of their reference to legal advice in witness evidence and opening submissions.

In earlier decisions the courts had drawn a distinction between whether the content of such advice had been referenced as distinct from the effect of such advice with privilege being found to have been waived only in circumstances where the content was referred to. However, in PCP, Waksman J expressly considered  the difficulty of mechanistically applying such a distinction in practice and instead focused upon the question of the reliance placed on the advice to which reference had been made and the purpose of such reliance.

Waksman J held that, for there to be a waiver of privilege, the reference to legal advice must be sufficient and the party said to have waived privilege over such advice “must be relying on that reference in some way to support or advance his case on an issue that the court has to decide”. Waksman J found that passages in the Barclays’ witness evidence amounted to an assertion that whatever was done was approved as lawful by the lawyers and that the purpose of the passages in the statements was to assist the merits of Barclays’ case.   

Waksman J helpfully also provided examples of what would not constitute a waiver in such circumstances, such as the simple reference to the giving of legal advice or a reference to “my solicitor gave me detailed legal advice. The following day I entered into the contract”. However, he held that a statement to the effect “I entered into the contract as a result of that legal advice”, would be sufficient to constitute waiver with clear reliance being provided on that advice.

On the question of whether it was appropriate to order the production of privileged documents other than those to which reference had been made to found the case of waiver, Waksman J found that it was for the court to decide the issue or transaction to which the waiver was concerned and that all the privileged material falling within that issue or transaction should be produced. This was to prevent the “cherry picking” of documents and the need to ensure a partial picture was not provided as a result of more limited disclosure.

Conclusion

Whilst it is clear that the question of whether privilege has been waived in a particular case will be fact sensitive, in presenting evidence referring to legal advice extreme care should be taken and the risk of the loss of privilege weighed against the benefit derived. The approach adopted by Waksman J in PCP correctly focussed the test upon the rationale, preventing a party from taking the benefit of privilege in advice they are positively advancing in support of their case, thereby potentially widening the scope for challenges to any claim to privilege. PCP also reminds us of the danger of providing privileged material on a limited waiver basis.