High Court holds that English law legal advice privilege can extend to such communications regardless of whether or not the lawyers are in-house practitioners.

In PJSC Tatneft v Gennady Bogolyubov & Ors.,[i] the English High Court held that legal advice privilege can apply to communications with foreign lawyers in certain circumstances. Specifically, privilege can extend to such communications if:

• The communications are between a client and its lawyers (whether or not they are acting “in-house”).
• Such communications are made in connection with the provision of legal advice.
• The lawyers with whom the client is communicating are acting in their professional capacity.

The English courts will not look into whether the foreign lawyers are “appropriately qualified” or recognized / regulated as “professional lawyers” as a matter of local law.

Facts

This judgment forms part of a long-running dispute between the claimant (an oil company incorporated in the Russian Federation) and the defendants (four Ukrainian businessmen) regarding an alleged “Oil Payment Siphoning Scheme” (as described by the claimant). This judgment concerns a standalone application by the second defendant, Mr. Igor Kolomoisky, on the issue of whether the claimant properly claimed legal advice privilege.

In this context, the claimant and each of the four defendants had given standard disclosure in advance of trial. The claimant’s disclosure statement dated 11 September 2019 contained the following claim to legal advice privilege:

“(1) Original and copy correspondence and other communications and documents passing either directly or indirectly between the Claimant and its legal advisers (including but not limited to advice, notes of telephone conversations and meetings, Instructions to Counsel, notes of consultations and conferences with Counsel, Counsel’s written advice, drafts of any of the foregoing) all being confidential and consisting of, referring to, requesting or having been prepared for the purpose of requesting or giving legal advice and assistance.” [8] (emphasis added in underline)

It was subsequently confirmed in inter-party correspondence that the claimant intended (by way of the underlined words above) to assert legal advice privilege over communications between (i) its employees / officers and (ii) members of its internal legal department. The second defendant challenged the claimant’s right to withhold production on these grounds and sought an order from the High Court compelling the claimant to disclose these communications and documents for inspection.

Submissions

Counsel accepted as a preliminary point that, in proceedings (such as these) before the English High Court, “it is a question of English law as the lex fori whether a document can be withheld on the basis of privilege” [16]. As such, the second defendant submitted that, as a matter of English law, legal advice privilege only applies to (i) “professional lawyers” — legal advisers who are professionally qualified and belong to a professional body, (ii) in-house lawyers that have been admitted to practice and are regulated, and (ii) foreign lawyers if they are “appropriately qualified” [20].

In this regard, the second defendant filed evidence that in the Russian Federation: “i) an Advocate is an independent legal advisor who has been admitted to the Russian legal bar […]; ii) in-house lawyers are not Advocates; iii) there is a legal concept of legal professional privilege termed “advocates secrecy” which does not apply to lawyers who are not Advocates”. [18]

The second defendant therefore submitted that English law legal advice privilege does not apply to communications with, and documents generated by, personnel within the claimant’s in-house legal department because they are not “Advocates”. In other words, the court should assess both the status and function of the foreign lawyers in question to determine whether legal advice privilege can attach.

The claimant submitted in reply that under the English law of privilege, legal advice privilege applies to advice obtained from foreign lawyers — including in-house lawyers. Both the Russian law of legal professional privilege, and the standards of regulation or training applying to Russian lawyers, are therefore irrelevant.

Judgment

Mrs. Justice Moulder acknowledged that the seeking and giving of legal advice is in the public interest, and that to this end, communications between clients and their lawyers should be secure from the scrutiny of others.

In line with this well-established position, the court noted that English law legal advice privilege has been held to extend to communications between clients and their foreign lawyers — largely for reasons of “fairness, comity and convenience” (the words of Lord Neuberger at [73] of his judgment in R (on the application of Prudential plc and another) v Special Commissioner of Income Tax [2013] UKSC 1 cited at [28] of the present judgment). The court found no requirement under English law to investigate whether foreign lawyers in such circumstances are “appropriately qualified” or recognized / regulated as “professional lawyers” as a matter of local law.

Rejecting the second defendant’s submission that the English courts should consider the status of a foreign lawyer when determining the application of legal advice privilege, the court approved the following passage from re Duncan, decd [1968] P 306 as a “clear statement” that only the function of the client-lawyer relationship is relevant: “The basis of the privilege is just as apt to cover foreign legal advisers as English lawyers, provided only that the relationship of lawyer and client subsists between them” (cited at [35]). As such, once it can be established that such a relationship exists, the English courts will not engage in a further investigation into national standards, regulation, and/or training of the foreign lawyer. Mrs. Justice Moulder therefore reasoned that once English legal advice privilege rules apply, the inclusion of foreign in-house lawyers follows “as a matter of both logic and principle” [53].

For these reasons, the court rejected the application and held that:

• Legal advice privilege can attach to communications with foreign lawyers (whether or not they are “in-house”).
• The English courts will not inquire into how or why the foreign lawyer is regulated under local law.

Once a client-lawyer relationship has been established, legal advice privilege can apply if:

• The communications are between the client and the client’s lawyers.
• Such communications are made in connection with the provision of legal advice.
• The lawyers with whom the client is communicating are acting in their professional capacity.

Comment

This judgment is a clear statement that the English courts will, when appropriate, protect applicable client-lawyer communications from disclosure in English proceedings if the communications are between a client and the client’s foreign legal advisers, regardless of whether or not they are in-house lawyers or independent practitioners. This judgment will be of great comfort to foreign litigants before the English courts whose legal advisers (including in-house legal) are based outside the jurisdiction and may be the subject of stricter rules on privilege as a matter of local law.

[i] PJSC Tatneft v (1) Gennady Bogolyubov; (2) Igor Kolomoisky; (3) Alexander Yaroslavsky; (4) Pavel Ovcharenko [2020] EWHC 2437.