Court of Appeal: privilege and confidentiality in 2019


‘Yes, I remember Addlesee…’


The latter part of 2019 has seen at least three important cases in the Court of Appeal on the subjects of legal professional privilege (LPP) and confidentiality.


In Addlesee & Ors v Dentons Europe LLP [2019] EWCA Civ 1600 (2 October 2019) the question was: ‘What happens to legal advice privilege attaching to communications between a company and its lawyers, once that company has been dissolved?’ said Lewison LJ in the Court of Appeal. Legal advice privilege (LAP), the more significant branch of LPP, endures till it is waived by the person entitled to it; if it is overridden expressly by statute; or where the iniquity exemption applies (ie where a person seeks legal advice to commit a crime or other such nefarious activity).


The brief facts of Addelsee – the reference in the heading above is to Edward Thomas’s‘I remember Adlestrop’ – the brief facts are that a group of investors paid into a scheme marketed by a company which was subsequently dissolved. The Crown had disclaimed any interest in bona vacantia. The investors brought a claim against the company’s lawyers in damages saying that the scheme was fraudulent. A Master refused to order disclosure of documents passing between the company and its lawyers. LAP remained despite the dissolution of the company, she said. The investors appealed.


The twin starting points for LAP, said Lewison LJ in the Court of Appeal, are R v Derby Magistrates’ Court exp B [1995] UKHL 18, [1996] 1 AC 487, [1996] 1 FLR 513 and Three Rivers District Council and ors v Governor and Company of the Bank of England (No 6) [2004] UKHL 48, [2004] 3 WLR 1274. For him it was R v Special Commissioner and anor exp Morgan Grenfell & Co Ltd [2002] UKHL 21, [2003] 1 AC 563 which asserted that LAP was not just a question of evidence – ‘disclosure in legal proceedings’ – but it ‘was a fundamental human right’ ([13]-[15] and [61] and [62] per Lord Hoffman). LAP ‘is absolute and is based not merely upon the general right to privacy but also upon the right of access to justice’.


Legal advice privilege: a fundamental right


But why is LAP a human right? The common law replies that it is a matter which is basic to the administration of justice. A client must be able to speak frankly to a lawyer. The client must be have entire confidence that nothing will be passed on to anyone else at all, save with the client’s consent. Lewison LJ (at [8]) cited Lord Taylor in the Derby Magistrates case quoting from Anderson v Bank of British Columbia (1876) 2 ChD 644 at 649 per Sir George Jessel MR:


‘[The client] should be able to place unrestricted and unbounded confidence in the professional agent, and that the communications he so makes to him, should be kept secret, unless with his consent.’


Central to all this is the fact that only the client can waive privilege. In Bullivant and ors v The Attorney-General for Victoria [1901] AC 196 it was stated: ‘The mere fact that a testator is dead does not destroy the privilege’. So, said, Lewison LJ, it seems that LAP may be as important to ‘those left behind’ as it was to the deceased (at [35]). But surely the right must belong to someone.  If the person entitled to the privilege dies or ceases to exist, does not their privilege die with them? No, says Lord Taylor in the Derby Magistrates’ case. There can be no exception, he said, to the principle of ‘once privileged, always privileged’. And thus, LAP ‘attaches at the moment when the protected communication is made’ (Lewison LJ at [57]). LAP applies as soon as the advice is given, to the circumstances in which it was given – what was said and so on – and it survives until waived. The survival of the beneficiary of the advice is irrelevant.


‘Iniquity exemption’: pub chatter and an email?


Lewison LJ featured again in the second case, Curless v Shell International Ltd [2019] EWCA Civ 1710 (22 October 2019); though here the judgement was of the court (Sir Thomas Etherington MR, Lewison and Bean LJ). The case concerned Mr Curless who was involved in Employment Tribunal (ET) proceedings with his former employer, Shell. Drinking in a bar one evening Mr C heard a conversation between two individuals, which he assumed related to tactics for seeing off his claim. Later he saw an email from senior lawyer working for Shell, sent to him anonymously and not intended, by its author or recipient, to be seen by him.


In his ET proceedings Mr Curless referred (paragraphs 10 and 11) to both of these sources of information. The question was whether his pleadings, to the extent that they referred to what was said and in the email (paras 10 and 11) should be struck out since they were cover by LAP; but that if so, was that privilege inapplicable because on the iniquity principle (R v Cox and Railton (1884) 14 QBD 153; that it cannot be part of a lawyer’s job to advise wrong-doing, and that, if that is the case, no privilege can arise). The ET said LAP applied; but on appeal to the EAT Slade J said not.


The email was one which was routine where advice was sought and provided in employment law cases, said the Court of Appeal. And the conversation in the pub was little more than gossip; and could not be used to interpret the email. Neither were susceptible to a claim for ‘iniquity’. The judgment concluded with a short discussion of case law in relation to the ‘iniquity exemption’ starting from Cox and Railton and explaining why, as the law stands, the iniquity exemption, in the light of Barclays Bank plc v Eustice [1995] 1 WLR 1238, CA, can go further than dishonesty.


Confidentiality and undertakings


DSM SFG Group Holdings Ltd & Ors v Kelly [2019] EWCA Civ 2256 (19 December 2019) was dealt with more on the basis of confidentiality, than of LAP (though LAP arose on the facts); and an important subsidiary issue was that of undertakings given to the court. The facts by most standards, and the first instance decision under appeal, were remarkable. The respondent had taped conversations between the appellant’s in-house lawyer and their own solicitors over a period of six weeks. The company issued harassment and breach of confidence claims, alongside seeking an injunction against Kelly.


That he had bugged the appellant company’s lawyers (and then lied to the court about it: see [11]) was bad enough. That the conversations on the face of it must normally have been covered by privilege surely stood out? But then the first instance judge permitted the respondents to alter their undertaking (see [25]) – originally (1) not to use the recordings other than to defend the proceedings; but also (2) then to counter-claim. As Simon LJ put it, the appellant’s claims were resolved against them by the judge, but before the issue had even been tried:


‘[30] … The original undertakings protected the appellant’s confidential information until the issues in relation to the claim for breach of confidence were resolved; whereas the revised undertakings allowed the respondent to use and disclose the appellants’ confidential information, so as to make claims including claims against third parties, before he had established any right to do so. The Judge’s order had the effect of allowing the use of confidential material before the right to do so had been established, see Imerman v. Tchenguiz and ors [2010] EWCA Civ 908, [2011] Fam 116 at [142]. In effect, the order granted the respondent summary judgement on the issue of confidentiality, subject to reservations whose effect was necessarily uncertain.’


The amendment at (2) was deleted; so that the issue of confidentiality (and LAP) remained live on the company’s application. And, as the court made clear, the respondent’s confronted a stiff climb to prove the justice of his breach of the company’s confidence (still more any attempt to override LAP). For example, Lord Denning MR in Seager v Copydex Ltd [1967] 1 WLR 923 at 931B-E (quoted by Simon LJ at [40], and still good law in 2019), said this:


‘I start with one sentence in the judgment of Lord Greene MR in Saltman Engineering Co v Campbell Engineering Co [1948] 65 RPC 203, 213: ‘If a defendant is proved to have used confidential information, directly or indirectly obtained from the plaintiff, without the consent, express or implied, of the plaintiff, he will be guilty of an infringement of the plaintiff’s rights.’… The law on this subject… depends on the broad principle of equity that he who has received information in confidence shall not take unfair advantage of it. He must not make use of it to the prejudice of him who gave it without obtaining his consent.’


Further, a subject close to the practice of many lawyers, the court reminded litigants that undertakings given by parties to the court, can – in principle – be released on application by the party who gave it. However, that release should only be on a ‘significant change of circumstances’ being established by the applicant (see recently Lord Wilson at [11], Birch v Birch [2017] UKSC 53, [2017] 1 WLR 2959, [2017] 2 FLR 1031).


Privilege and administration of justice


So three cases on aspects of LAP; and, to a lesser extent, of confidentiality. All show the continuing clarity with which the common law treats privilege and confidentiality. Their  centrality to rights and the administration of justice remains as ever.