The decision is of significance to all corporates involved in cross-border investigations and litigation.
It is an important reminder that what is privileged in one jurisdiction will not necessarily be held to be privileged in another, and that the status of interview notes and other potentially sensitive documents will ultimately depend on the law of the forum where the question of privilege is being addressed.
It confirms that, in cases involving legal advice privilege, courts of first instance will continue to be bound by the controversial and narrow definition of “client” in the Three Rivers (No 5) decision of the Court of Appeal which, for now, remains good law. That said, the judge in this case seemed to have sympathy with RBS’s position in respect of the narrow definition of “client” for the purposes of legal advice privilege under Three Rivers (No 5). The judge acknowledged that this was a controversial case.
However, it remains vital to carefully consider who is “the client” in each case at the outset and as the matter develops. Indeed the judge also added, obiter, that it may also be that in a corporate context only individuals singly or together constituting part of the “directing mind and will” of the corporation can be treated as being, or being a qualifying emanation of, the “client” for the purposes of legal advice privilege. As RBS submitted, this would restrict the scope of legal advice privilege available to corporate bodies yet further and go beyond the findings in Three Rivers (No 5). It would also introduce a significant burden on lawyers to ensure that they took their instructions from and gave their advice to only those individuals constituting the “directing mind and will” of the corporate client, with ample scope for dispute around who those individuals comprised. In practice, it only re-emphasises the need for carefully scrutiny of the position on an ongoing basis.
On the other hand, some reassurance can perhaps be taken from the judge’s view that interview notes recording the lawyer’s own thoughts and comments with a view to advising the client would almost certainly be privileged – provided that when challenged, a party can demonstrate some attribute of or addition to the interview notes which distinguished them from verbatim transcripts by revealing or at least giving a clue as to the trend of legal advice being given.
In any event, the judge made clear that it “may be that in a suitable case the Supreme Court will have to revisit the decision”, and has now granted RBS permission to appeal directly to the Supreme Court, rather than having to go through the Court of Appeal. Assuming that the Supreme Court grants permission to appeal, it is anticipated that the appeal will be heard early next year. For the first time in over a decade, therefore, there may be an opportunity for Three Rivers (No 5) to be overturned and a wider definition of “client” for the purposes of legal advice privilege to prevail.
Although RBS did not claim litigation privilege at first instance, it would be helpful for the Supreme Court to address and provide direction on when an investigation becomes sufficiently adversarial or confrontational to constitute litigation for litigation privilege purposes, as this also remains a grey area under English law.
Until then, English privilege law remains unchanged.
Further information on privilege: