The High Court's decision in Aabar Holdings SARL and others v Glencore Plc and others (Aabar Holdings SARL) clarifies the extent to which legal advice privilege will apply to a client's internal communications and documents. Mr Justice Picken found that some intra-client correspondence and documents may be covered by legal advice privilege. The decision demonstrates the court taking a pragmatic and welcome stance to the real commercial world. However, certain key conditions must be met if disclosure is to be avoided.
Identifying the "client" group
In the 2003 case of Three Rivers (No.5) the Court of Appeal held that the client, for the purposes of applying legal advice privilege, is the group of employees and agents authorised to seek and receive legal advice on behalf of the company (i.e. the "Client Group"). This meant that communications between this Client Group and its lawyers benefit from legal advice privilege. However, communications between the Client Group and other employees and agents of the company are not generally privileged. The question that arose in Aabar was about intra-Client Group communications.
Aabar Holdings SARL
The judgment in Aabar Holdings SARL (which arose from litigation against Glencore Plc) looked at the extent to which legal advice privilege applies to “internal communications between members of the client group and/or documents created by a member of the client group”. In particular, it addressed whether Glencore was entitled to withhold documents from disclosure on the basis that legal advice privilege applied to such intra-client communications, provided they were produced for the dominant purpose of seeking legal advice. The claimant disagreed and argued that legal advice privilege only applied to intra-client communications if they disclosed the nature of the legal advice.
The court agreed with Glencore. Mr Justice Picken commented that Three Rivers (No.5) was concerned with the application of legal advice privilege outside the Client Group as opposed to intra-Client Group communications; it did not restrict legal advice privilege to documents/correspondence between the client and its lawyer. Neither did the subsequent authorities.
The Judge found that it did not make sense for legal advice privilege to not be available in respect of intra-Client Group documents whose dominant purpose is to identify an issue or facts on which the client proposes to obtain legal advice. For example, a client might compose notes ahead of a meeting with a lawyer or following a meeting or make a note setting out next steps or information to send to the lawyer. Given that a lawyer's working papers are privileged, the judge found it difficult to see why the client's working papers would not be.
Commentary
This decision will mean that those directors, partners and employees who form part of the identified Client Group will be able to argue that confidential internal documents/communications may be protected from disclosure if those communications were produced for the dominant purpose of obtaining legal advice. Importantly those communications do not require the lawyers to be a party to them, although doing so may well improve the client's position, especially if litigation is contemplated.
Overall, whilst this takes legal advice privilege further than had previously been articulated, parties should still exercise caution in identifying the individuals within the Client Group, ensuring the group meets the Three Rivers requirements (and in particular is not too large a cohort risking the claim for privilege) and in generating or sharing documents. Plus, of course, it is also important that any documents are created for the dominant purpose of seeking legal advice, which means care should also be taken not to create documents for potentially more than this primary purpose.
