Keeping Things Private In Court: Are There Limits To Legal Privilege?

The principle that we can’t be forced to disclose certain communications between ourselves and our clients is fundamental to effective litigation. If clients were concerned that what they tell us could somehow be disclosed in court or elsewhere they might be reluctant to be as frank as they need to be. This in turn would make it difficult for lawyers to provide the effective, practical advice that’s required.

‘Legal privilege’ is the name for the doctrine that protects lawyer/client communications. But the protection is not open-ended. There are limits to it, and the 2022 English Court of Appeal case of Loreley v Credit Suisse (discussed below) is a useful illustration of this.

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WHAT IS LEGAL PROFESSIONAL PRIVILEGE?

When we talk about professional privilege for lawyers and their clients we are referring to both legal advice privilege and litigation privilege.

• Legal advice privilege covers more than litigation privilege in that it gives clients the freedom to discuss legal concerns with their lawyers and be reassured that what they say will remain private between them and their lawyer. This type of privilege applies even if there is no live legal case and while wide ranging it doesn’t apply to commercial or strategic advice a lawyer might give. Note also that the protection of privilege can be forfeited if a party distributes the privileged information to outside parties. It’s also important to highlight that a client cannot expect to benefit from the cloak of privilege where there is fraud or criminality associated with the request for legal advice.

• Litigation privilege protects documents and communications that have been created with the sole or dominant purpose of conducting litigation. The protected documents or communications do not necessarily have to have been generated in the course of a client/lawyer relationship so this type of privilege can apply in a greater variety of situations than legal advice privilege. It can for example apply to communications with a witness or a professional you may be relying on in court. We’ve previously discussed how documents that may originally have been protected by litigation privilege can nevertheless be disclosed because the court deems privilege to have been waived. The Loreley Financing case below highlights another limitation of litigation privilege.

LORELEY FINANCING v CREDIT SUISSE, 2022

Loreley was a special purpose vehicle company (SPV) created for a specific, narrow purpose. The case revolved around Loreley’s claim  for fraudulent misrepresentation against Credit Suisse bank. The amount claimed was $100 million.

In the course of the case when the sides were exchanging information the bank sought information as to the identity of who was providing instructions to the solicitors for Loreley to run the case. The request was not that unusual given the fact that Loreley, as an SPV, had no employees and its officers were supplied buy a professional services company.

Loreley’s solicitors refused to divulge the information claiming the identities of any individuals providing instructions was covered by litigation privilege. There were two questions for the court to decide:

• Was the specific communication passing between the instructing individuals and the solicitors privileged; and
  
• If it was privileged would that privilege be undermined by disclosing the identity of those individuals?

Mr Justice Knowles decided that the privileged documents would in no way be affected if the identity of those giving instructions to the solicitors in the case were disclosed. That was because disclosing the identities would reveal nothing that was privileged. In short the identities of the individuals was not protected by litigation privilege.

COMMENT

The dispute in Loreley was clearly ona very narrow point – whether the identity of people instructing lawyers was protected by litigation privilege. But the case is a useful reminder of the limits of privilege. As the judge indicated courts must be particularly careful to consider the basis on which a claim for privilege is made. Remember a claim for privilege is unusual because the party claiming privilege and their legal advisers are effectively judges in their own case. Subject of course to the power of the Court to inspect the documents the legal advisers and clients are the only ones who know the precise nature of the relevant communications.

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