Confidentiality of client’s affairs - professional regulation of lawyers (solicitors and barristers)
As stated in Chapter 4 of the Solicitors Regulation Authority (SRA) Code of Conduct 2011 (version 21), the duty of solicitors to protect their clients’ confidential information is a fundamental feature of the solicitor-client relationship in England and Wales. This duty continues after the client retainer is terminated, and even after the client’s death. The duty is also owed by all members of a law firm’s staff, including support staff. The client’s affairs must be kept confidential unless disclosure is required or permitted by law, or the client consents.
Barristers have a similar duty, as set out in Core Duty 6, Rule C5 and Rule C15.5 of the Bar Standards Board Handbook, which requires them to preserve the confidentiality of their clients’ affairs.
Privilege - the law
There is a concept of legal professional privilege in the law of England and Wales. In general, if documents are covered by legal professional privilege, they can be withheld from disclosure to other parties, including courts, tribunals, regulators and prosecutors. The protection of privileged communications is recognised as a substantive legal right of the client at common law and under the European Convention on Human Rights (incorporated into English law by the Human Rights Act 1998). There are two key types of legal professional privilege: legal advice privilege (LAP) and litigation privilege.
LAP protects confidential communications:
- between a lawyer and his or her client;
- where the lawyer is acting within the course of his or her professional relationship and the scope of his or her professional duties; and
- for the purposes of seeking or giving legal advice and assistance in a relevant legal context.
Litigation privilege covers a wider category of documents than LAP, protecting confidential communications:
- between a lawyer and client and between either of them and a third party (eg, an agent of the client);
- where litigation is in existence or in reasonable contemplation; and
- that have been created for the sole or dominant purpose of conducting such litigation.
The requirement for lawyer-client communications to be confidential is generally easily satisfied, as the law will imply a relationship of confidence between them.
In addition to the two main types of privilege listed above, there are also the following concepts of privilege in English law:
- common interest privilege (this allows a client to disclose a privileged document to a third party without waiving privilege over that document, where both parties have a common interest at the time of disclosure - see question 37);
- joint privilege (where a client and third party have a joint interest in the subject matter of a communication - see question 39); and
- without prejudice communications (this generally protects documents that form part of a genuine attempt to resolve a dispute - see question 39).
Privileged documents in civil proceedings
The Civil Procedure Rules (CPR) provide a procedure for a party to litigation to withhold privileged documents from inspection by an opposing party or by the court (CPR 31.3(b)). As a matter of practice, privileged documents are usually referred to in lists of relevant documents exchanged between the parties, subject to a claim to withhold them. Usually, parties will not need to detail every document covered by privilege individually, but it is helpful to indicate the nature or classes of documents over which privilege is claimed and the factual basis of the grounds giving rise to this privilege. In Astex Therapeutics Ltd v AstraZeneca (2016), the court ordered AstraZeneca to provide further details in respect of the documents over which it claimed privilege, as well as provide an explanation of the nature of privilege claimed, as certain descriptions that had been provided were considered inadequate.
Privileged documents in criminal and regulatory investigations and proceedings
A search warrant may not authorise the seizure of material subject to privilege. However, investigating officers do have powers under sections 50 and 51 of the Criminal Justice and Police Act 2001 to remove potentially privileged material from premises being searched where it is not reasonably practical in the circumstances to establish what items can and cannot be seized, or to separate privileged material. This material must be kept separately and examined to ascertain what material may be retained, with any legally privileged items being returned as soon as reasonably practicable. Persons with an interest in the material may ask to be present when the material is examined and can challenge the seizure of such material.
In practice, it is common to agree a procedure with the investigating officers on how the material will be examined; for instance, through using independent counsel to determine the privileged status of the material. The Serious Fraud Office (SFO) has its own internal procedure that it follows in respect of potentially privileged material, as set out in its Operational Handbook.
In R (McKenzie) v Director of the SFO (2016), the Court considered the procedure set out in the Operational Handbook, and held that the SFO could use its in-house IT team to isolate potentially privileged documents for the purpose of independent external review.
Lawyers of clients under criminal investigation are obliged to ensure that privileged materials are not disclosed to the prosecuting authorities, although they may advise their clients to waive privilege on a limited basis; for instance, in the context of cooperating with the SFO.
In regulatory investigations, a client is entitled to withhold documents on the grounds of legal professional privilege on the same basis as in civil and criminal proceedings (albeit there are some narrow exceptions to this where a lawyer is being investigated by its own regulator). However, the recent decision in Financial Reporting Council Limited v Sports Direct International PLC (2018) has limited the right to withhold privileged materials in the context of a regulatory investigation being carried out by the Financial Reporting Council (FRC) into a company’s auditors. This case is currently subject to appeal (see question 4).
Proceeds of crime and privileged circumstances
Part 7 of the Proceeds of Crime Act 2002 (POCA) introduces the concept of ‘privileged circumstances’. Generally speaking, POCA imposes (among other things) disclosure obligations on certain professional advisers, including solicitors, who know or suspect, or have reasonable grounds for knowing or suspecting (as a consequence of information received in the course of their work) that their clients are involved in money laundering. However, a defence is available to the offence of failure to disclose if the information or other matter giving rise to the suspicion came to a professional legal adviser or a relevant professional adviser (such as an accountant or tax adviser) in privileged circumstances.
It is important to be aware that the receipt of information in privileged circumstances is not the same as legal professional privilege. As noted above, legal professional privilege is an absolute right protecting clients against disclosure of information that cannot be overridden.
Privileged circumstances means information communicated or given by:
- a client (or a client’s representative) in connection with the giving, by the adviser, of legal advice to the client;
- a person (or a person’s representative) seeking legal advice from the adviser; or
- a person in connection with legal proceedings or contemplated legal proceedings.
The exemption does not apply to information or other matters communicated or given with the intention of furthering a criminal purpose (see also question 18 in relation to the crime-fraud exception). Communications that are covered by privileged circumstances only and not legal professional privilege will remain vulnerable to seizure by or production to law enforcement agencies.
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