… and when does SRA regulation start to run?

At what point in the life of legal advice can it be said that what a person has said to a lawyer – solicitor or barrister – is covered by legal advice privilege (LAP); and, perhaps by the same definition, at what point is the lawyer’s insurer on risk?

Yet, in these regulated times – when a lawyer’s every move, qua lawyer, is capable of review by a regulatory body; and many lawyers practice accordingly – a surprising feature of outcomes focussed regulation by Solicitors’ Regulation Authority is that the SRA seem not to do not know when their regulatory reign over a lawyer begins. The regulators have no barometer of which I am aware by which they can measure the critical moment – the scintilla temporis – at which lawyers are clearly within their regulatory clutches.

This note will say that that point in time is exactly the same as that which will be of concern to a lawyer in terms of when LAP arises on what has passed between him/her and an advised individual; or to an insurer if they are to be on risk under a firm’s professional indemnity insurance policy. At that point, it seems to me, it can be said a lawyer’s retainer contract is in place; and surely at that point the regulator net closes also?

It is therefore important to define – sometimes to the minute (as the examples below show) the scintilla temporis at which a contractual retainer arises. And certain it is, that SRA do not regard themselves as having any arbitral role in defining this point. They have no means in their present state of administrative uncertainly of defining when they their jurisdiction can be asserted. At least that is what I infer from what they tell me.

Retainer: a contract

A solicitor’s retainer is based on contract law: a solicitor is instructed to act by a client in ‘a relevant legal context’ (a term used by Taylor LJ in the context of his definition of legal professional privilege in Balabel v Air India [1988] Ch 317, CA). In most cases it will be for a consideration (eg payment of agreed costs); but not invariably. If the advice acts on the mind of the person advised, that is sufficient. It is sufficient even if the advice does not cause the advised in any way to alter their position (ie to act on that advice); though in most circumstances some change of position (however slight) will be the result.

The moment a lawyer gives legal advice (ie not information about bus time for coming to a meetings, or as to what a client should wear if it rains on the way home from court) s/he is working in a relevant legal context. And indeed, the incidence of advice privilege may prove to be the critical feature.

Advice privilege and the ‘legal context’

Two examples from a family law context will serve. In both an independent financial adviser meets Rachel Boxley (RB), a lawyer with a specialist family law Birmingham firm. The occasion is a marketing event hosted by Thefamilylaw.Com (FLCo), RB’s firm, at the local rugby club. Over his third glass of wine Ian tells RB that his own marriage has broken down, he is seeing his two children hardly at all and that he is bleeding himself white financially: he pays, he says, the mortgage on their house and substantial maintenance. Next Thursday he and his ex are to have their fifth session with a mediator who seems to be taking things nowhere and to agree with her all the time. RB says she cannot see how he can be expected to pay all that maintenance and for the mortgage. She gives Ian her card (she is there to pick up clients, after all) and says to him to give her a ring soon.

When he comes in for an appointment, five months later, RB is troubled to find that he has a possession action application from the mortgagees of his house, a letter from his wife’s solicitors, a divorce petition and a letter from the Child Maintenance Service (formerly Child Support Agency). Mediation failed when the mediator expressed distaste, and his wife vehemence, that he appeared to want the children thrown out of the family home. A bout of reactive, but severe, depression prevented him making an earlier appointment. He has not the means to pay the mortgage arrears. He attributes to RB’s advice that he should not pay his mortgage any more – as he saw it – much of his present difficulties, of the failure of mediation and total loss of contact with his children. Will RB warn him in terms of SRA Code of Conduct 2011 Ch 1 IB(1.16) (the firm may have made a mistake) and O(1.12) (a conflict may exist in consequence); and will FLCom’s insurers see it in the way that Ian does, if RB cannot resolve his difficulties?

In a second case RB meets another local professional, Paul, at a party. Out of the blue, but knowing RB is a solicitor with a family law firm, Paul tells her (almost as if he has decided finally to confess, that evening) that he and his wife are involved in court proceedings over their third child, Colin. He was found with injuries to his upper body which – say the doctors – can only be explained by his having been shaken violently and put back in his cot. They have been to court – Paul’s voice breaks a little, and he looks away. Colin is in temporary care. Neither parent admit that they could have been responsible; but Paul now feels he needs to find a way to tell his wife, the doctors, social workers – his own lawyer – that he is willing to admit to having shaken his little boy and – perhaps – to have caused the injuries. RB looks around for the firm’s child care expert Norma Hartnov. She introduces Ian to NH and the three of them, in a secluded corner, talk about what Paul has said. He will need separate representation. NH says FLCom is happy to act.

Legal advice privilege: Prudential and Derby Magistrates’ case

For present purposes ‘privilege’ entitles a person to refuse to put otherwise relevant evidence before a court. In family proceedings it takes four main forms (considered in more detail in [2014] Family Law ): legal advice privilege (see below); litigation privilege (said not to apply in some family proceedings (Re L (Police Investigation: Privilege) [1997] AC 16, [1996] 1 FLR 731) which enables a litigant to collect evidence in confidence (ie it cannot be forced to be revealed by him/her) for a case); self-incrimination privilege (the right to tell others to mind their own business: per Lord Mustill in Reg v Director of Serious Fraud Office, exp Smith [1993] AC 1 at 30-31, but vulnerable to other disclosures pressures in family proceedings); and the immunity (or ‘privilege’) said to arise from the without prejudice rule (an implied contractual arrangement between parties seeking to settle disputes).

At the beginning of 2013 Lord Neuberger gave a modern definition of legal advice privilege as follows;

[17] Where legal professional privilege (“LPP”) attaches to a communication between a legal adviser and a client, the client is entitled to object to any third party seeing the communication for any purpose, unless (i) the client has agreed or waived its right, (ii) a statute provides that the privilege can be overridden, (iii) the document concerned was prepared for, or in connection with, a nefarious purpose, or (iv) one of a few miscellaneous exceptions applies (eg in a probate case where the validity of a will is contested)….
[19] [It] applies to all communications passing between a client and its lawyers, acting in their professional capacity, in connection with the provision of legal advice, i.e. advice which “relates to the rights, liabilities, obligations or remedies of the client either under private law or under public law” (Three Rivers District Council and ors v Governor and Company of the Bank of England (No 6) [2004] UKHL 48, [2005] 1 AC 610 at [38] per Lord Scott).

Lord Neuberger then identified three particular points concerning legal advice privilege which he identified from recent case law:

[21] First, LAP exists to ensure that there is what Justice Rehnquist referred to in the Supreme Court of the United States as “full and frank communication between attorneys and their clients”, which “promote[s] broader public interests in the observance of law and administration of justice” (Upjohn Co v United States (1981) 449 US 383 at 389, quoted by Lord Scott in Three Rivers (No 6) at [31]. As Lord Scott went on to explain (at [34]) the principle “that communications between clients and lawyers, whereby the clients are hoping for the assistance of the lawyers’ legal skills …, should be secure against the possibility of any scrutiny from others, whether the police, the executive, business competitors, inquisitive busybodies or anyone else” is founded upon “the rule of law”.
[22] Secondly, LAP exists solely for the benefit of the client. As Bingham LJ said in Ventouris v Mountain [1991] 1 WLR 607, 611, the expression “legal professional privilege” is “unhappy” in so far as it suggests that the privilege is that of the legal profession, when it is “the client who enjoys the privilege”. Thus, as Lord Hoffmann pointed out in R v Special Commissioner and anor exp Morgan Grenfell & Co Ltd [2002] UKHL 21, [2003] 1 AC 563 at [37], “[i]f the client chooses to divulge the information, there is nothing the lawyer can do about it”.
[23] Thirdly, LAP is a common law principle, which was developed by the judges in cases going back at least to the 16th century – see Berd v Lovelace (1577) Cary 62, which, together with subsequent cases, is discussed in the opinion of Lord Taylor of Gosforth CJ in R v Derby Magistrates’ Court, Ex p B [1996] AC 487, 504-505….

The R v Derby Magistrates’ Court exp B [1995] UKHL 18, [1996] 1 AC 487, [1996] 1 FLR 513 provides a stark example of LAP in play. The applicant B had been charged with murder of a young girl. He confessed to the police, but later changed his story. He said that his stepfather had killed the girl. B was tried and acquitted; and the stepfather was then charged with the murder. At his committal for trial, B was called as a prosecution witness. During the defence cross-examination he was asked about the version of events he had given to his solicitors in his original account of what had taken place. He declined to waive privilege. The stepfather then obtained from the stipendiary magistrate a witness summons requiring B’s solicitor to produce all attendance notes and proofs of evidence disclosing B’s factual instructions in defence to the charge of murder but not the advice given to him by solicitors and counsel. B applied successfully in judicial review for the quashing of the witness summons. What he had said to his solicitor was covered ineradicably by LAP.

Legal advice privilege and inception of a retainer

When Paul spoke to RB and then to NH as he did, LAP would prevent either of the solicitors (and the same would apply if they had been barristers) repeating what he said; and if it could be said he spoke in a relevant legal context. Each of RB and NH are lawyers and are subject to LAP (see eg the Prudential case (above)). He knew that they were lawyers. If Paul changed his story, or was simply unwilling to waive his privilege, it is inconceivable that anyone – as with B in the Derby Magistrates’ case – could require NH or RB to repeat what he told them, whatever the context (even, and including, in Children Act 1989 Part 4 (care or ‘public law’) proceedings).

Ian suffers the prospect of further loss from his stopping of mortgage payments; or so it appears at this stage. It seems this arises directly from what he was told, at a similar function, by RB. Was the context legal? Certain it is that Ian thought he was talking to a lawyer, and altered his position as a result of what she said to him – that is, what she advised.

Inception of the retainer contract

So does a contract of retainer arise in either of these cases? The three defining features of a contract in general terms, and in the context of a solicitors’ retainer in particular, are as follows:

(1) Intention to create legal relations The act of seeking advice from a lawyer shows an intention in him/her to create legal relations and, for example, causes LAP to bite;
(2) Offer and acceptance: (a) the providing of information to an adviser in a relevant legal context, (b) the offer of advice and (c) the altering (albeit only fractionally) an individual’s position based on that advice, comprise the offer/acceptance component of a contract; and
(3) Consideration: an implied term of the above is that the lawyer can charge: in consideration of my giving advice to an individual I may render a bill (that I chose not to do so, does not lessen the fact of my right so to do: consideration passes whether I charge or not).

It follows: at the point where a solicitor starts to respond to information given by an individual who expects to receive advice, and the solicitor advises in consequence, then a contract of retainer is created. LAP applies to any confidential information and the potential for a claim for professional negligence (however slight) is at large. The professional indemnity insurer is on risk. And, arising from the first paragraph of this note, for good or ill, the baleful maw of Solicitors’ Regulation Authority closes.


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