Court of Appeal: legal advice privilege survives collapse of client

Documents exchanged between a law firm and its client, a now-dissolved Cypriot investment firm, remained protected by legal advice privilege after the company was dissolved, the Court of Appeal has ruled.The High Court ruled previously that the documents remained privileged for as long as the company could potentially be restored to the register, in this case until 2036. The Court of Appeal has gone further, overturning a previous case on the point to find that documents, once privileged, remain privileged unless that privilege is waived by the person entitled to waive it. Here, that was the company and the company had not waived privilege.

Litigation expert Emilie Jones of Pinsent Masons, the law firm behind Out-Law, said that the decision "emphasises the absolute nature of legal professional privilege".

"If a document meets the criteria for privilege, and retains the necessary characteristics including confidentiality, the basic rule is that it is privileged forever," she said. "There are very limited exceptions to this, the main one being where privilege is waived, which can only be done by the person to whom the privilege belongs."

"This case is a reminder of how careful law firms and other professionals who find themselves facing claims or investigation by third parties have to be with their clients' privileged information. The court emphasised that it is a lawyer's duty to assert their client's privilege. That is the case even where the client is a company which no longer exists because it has been dissolved, as is frequently the case with fraudulent investment schemes," she said.

Civil fraud and asset recovery expert Alan Sheeley said that parties wishing to access privileged information held by professional advisers "need to think creatively about their litigation strategy".

"A number of regulators, including the Solicitors Regulation Authority, have powers to demand that privileged client documents be handed over in the course of a regulatory investigation," he said.

"Once privileged documents are in the hands of a regulator, it may be possible for third parties to glean information about their contents. For example, relevant information may be discussed at a public disciplinary hearing, and safeguards applied to such hearings like anonymisation might not fully prevent third parties from picking up relevant information," he said......

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