July 2012
The scope of legal professional privilege: Walter Lilly & Co Ltd v Mackay and another [2012] EWCH 649 [TCC]
In the context of litigation, privileged documents must be disclosed but need not be made available for inspection by the other parties to a dispute. There are several different types of privilege: privilege against self incrimination, without prejudice communications, public interest immunity and legal professional privilege. Legal professional privilege includes both legal advice privilege (confidential communications between a solicitor and client made for the purpose of obtaining legal advice) and litigation privilege (communications between a client and lawyer, and between the client and his lawyer and third parties, for the purpose of preparing for contemplated or pending legal proceedings). This bulletin will focus on the recent decision of Mr Justice Akenhead in Walter Lilly & Co Ltd v Mackaywhich held that legal advice privilege does not attach to correspondence to and from a company which provided claims and project handling advice.
The Claimant (Walter Lilly & Company Ltd) was employed by DMW Developments Ltd, (the Second Defendant) to construct a house. The construction project suffered substantial delays but the Architects, Barrett Lloyd Davis Associates (“BLD”), granted Walter Lilly significant extensions of time. The work had started in 2004 and was initially anticipated to be finished within 18 to 20 months. The extensions of time were granted until February 2007. By October 2006, Mr Mackay (the First Defendant) who was to be the owner and occupier of the house retained claims consultants, Knowles, to provide “contractual and adjudication advice”.
Knowles did not hold itself out as a firm of solicitors or a group of barristers, even though some lawyers had been employed by them. Knowles quoted rates for various services including “Advocate” and “Legally Qualified Person” and their standard terms made it clear that “Solicitors” could be retained and a procedure was set up to enable this to happen. DMW’s solicitors took the view that much of the Knowles documentation attracted legal professional or legal advice privilege which resulted in an application by the Claimant for disclosure of all correspondence with or documents created by Knowles.
Mr Mackay submitted a witness statement stating that his principal contacts at Knowles provided DMW with legal advice and that he understood those contacts to be qualified, practising, barristers or solicitors. There was no direct evidence before the Court as to the professional status of the principal contacts at Knowles, however Mr Justice Akenhead noted that some information put before the Court suggested that each of the two principal contacts may have qualified as a barrister at some time but it did not reveal if either had any right between 2006 and 2008 to practise as a barrister or solicitor. Mr Mackay was himself a qualified barrister, albeit that he did not practice.
Mr Justice Akenhead reviewed the position in R (Prudential plc and or another) v Special Commissioner of Income Tax[2010] EWCA Civ. 1094 in which a claimant had obtained advice from accountants on tax law aspects and privilege was claimed. He noted that in the lead judgement Lord Justice Lloyd held that legal professional privilege did not apply in relation to any profession other than a qualified lawyer: a solicitor or barrister, or an appropriately qualified foreign lawyer. Lord Justice Lloyd commented “...If it were to apply to members of other professions who give advice on points of law in the course of their professional activity, serious questions would arise as to its scope and application..”.
In reaching his Judgment Mr Justice Akenhead concluded that Knowles were not retained as solicitors or barrister, even if the principal contacts were solicitors and barristers. Knowles were undertaking another professional role which was monitoring BLD and managing the construction project. He commented that the position was no different from the Prudentialcase. The fact that Mr Mackay honestly understood that the principal contacts at Knowles were qualified and practising solicitors and barristers was immaterial because their employer was not retained to provide the services of a solicitor or barrister. Consequently legal professional or legal advice privilege was held not to apply in this case and disclosure was ordered.
The Judgment made clear that the decision related only to legal professional or legal advice privilege and did not deal with litigation privilege.
If you have any comments or queries concerning this bulletin then please contact Paula Cook (pdc@wamlaw.co.uk)
