Does Legal Advice Privilege apply to foreign lawyers? PJSC Tatneft v Bogolyubov & Ors

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Does Legal Advice Privilege apply to foreign lawyers? PJSC Tatneft v Bogolyubov & Ors

Published 13 octubre 2020

The recent judgment in PJSC Tatneft v Bogolyubov & Ors  considered whether legal advice privilege extended to client communications with a foreign lawyer, regardless of whether or not they were “in-house”. It held that the only requirement for legal advice privilege to cover such communications is that the adviser acts as a lawyer. No consideration need be given as to whether the foreign lawyer is “appropriately qualified” or regulated as a “professional lawyer” in their own jurisdiction.

Background

Tatneft, the claimant and one of Russia’s largest producers of crude oil, alleged that the four defendants were involved in a fraud to divert payments away from Tatneft for oil supplied. Having claimed damages of $334m, Tatneft obtained a worldwide freezing order in March 2016 which prohibited each defendant from disposing or dealing their assets up to the value of £380m.

Legal Advice Privilege

Standard disclosure was ordered by the Court and Tatneft claimed privilege over a number of communications with its legal advisers. This included communications with the claimant’s Russian in-house legal team.

The second defendant argued that the communications with the in-house lawyers should be disclosed because in Russia, in-house lawyers are not members of the Russian Bar and they are therefore not ‘advocates’. “Advocates’ secrecy” (the Russian equivalent of legal advice privilege)  applies only to advocates and does not attach to communications with in-house lawyers. The second defendant argued that, as Russian in-house lawyers are not advocates, they are not ‘appropriately qualified’, and that under English law, legal advice privilege does not apply to foreign lawyers who are not ‘appropriately qualified’.

Judgment

The Court refused the application and ruled in favour of Tatneft, establishing that legal advice privilege extends to communications with foreign lawyers as long as the foreign lawyer in question acts in the capacity, or functions of a lawyer; it is not necessary to consider the qualifications of the specific individual. In coming to this conclusion, the judge examined the second defendant’s application as follows:

  • Rationale – The rationale underpinning legal advice privilege is the public interest in a client being able to obtain legal advice that will remain confidential.  This promotes candour between lawyer and client. The extension of legal advice privilege to communications with foreign lawyers is consistent with this understanding of privilege.
  • Appropriately qualified –There is no established precedent requiring the Court to consider the national standards or regulations applying to a foreign lawyer as a prerequisite to upholding a claim for privilege. The converse is true - privilege is frequently extended to foreign lawyers on the basis of very limited analysis, presumably on grounds of 'fairness, comity and convenience”.  The precise rules of foreign bar associations and the like is not a topic with which the English Court need grapple, especially when it is the ‘function’ of the relationship rather than the ‘status’ of the individual which is operative in this case.  (We would note that tax accountants might feel this is inconsistent with UK courts’ refusal to treat as privileged their advices in the tax field, even when that contains advice on the law.)
  • Practicalities – The Court further noted that it would be both impractical, and potentially inconsistent with comity, for the Court to examine the national standards and regulations of other forums in order to express whether legal advice privilege attaches to foreign lawyers. If the second defendant’s approach had been implemented, all Russian in-house lawyers and a large number of other lawyers working in Russia would be excluded from legal advice privilege.  This would be a fundamentally unfair and commercially untenable outcome.
  • In house lawyers – The Court noted that legal advice privilege applies to communications with in-house lawyers. Therefore, it follows that – as the court will not investigate the qualifications and registration of a foreign lawyer – foreign in-house lawyers are essentially “in the same position as those who practise on their own account”.

The judgment provides clarity that, in English proceedings, the rules of privilege will attach to communications with foreign lawyers, and that the courts will not be drawn into assessing the qualifications or specific title possessed by a lawyer in another forum.  However, the judgment does not otherwise soften the conditions for privilege to apply. As such, when liaising with overseas lawyers, it is still important to remain mindful of the dominant purpose of the communication and the nature of the relationship (i.e. is it between “lawyer” and client) between the parties.

Authors

Richard Highley

Richard Highley

London - Walbrook

+44 (0)20 7894 6470

Benjamin Jones

Benjamin Jones

London - Walbrook

+44(0)20 7894 6147

Julian Bubb Humfryes

Julian Bubb Humfryes

London - Walbrook

+44(0)20 7894 6137

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