The Privilege Is Ours…And Theirs; English High Court Clarifies Rules On Legal Advice Privilege For Foreign Lawyers

Morrison & Foerster LLP
Contact

Morrison & Foerster LLP

A recent English High Court decision has provided clarity on the scope of legal advice privilege as it relates to foreign lawyers.

Background

The English High Court’s decision in PJSC Tatneft v Bogolyubov and others [2020] EWHC 2437 (Comm) stems from a Russian law governed dispute[1] between Tatneft, a major Russian oil company, and four Ukrainian businessmen in relation to an alleged fraud.

The ruling follows an application made on behalf of Igor Kolomoisky, the second defendant, seeking disclosure of communications between members of Tatneft’s in-house Legal Department in Russia and Tatneft’s employees/officers. Mr Kolomoisky argued that these communications were not covered by legal advice privilege under English law because Tatneft’s in-house lawyers were not members of the Russian Bar. If Mr Kolomoisky was correct, Tatneft would be required to disclose the communications it had previously withheld as privileged.

The Court reviewed expert evidence on the Russian legal system, which outlined key distinctions between a self-employed, independent and officially registered “advocate” and an employed in-house lawyer. The expert evidence noted that it is not necessary to be a registered advocate to practice law in Russia, but that under Russian law only advocates are protected by “advocate’s secrecy” which is the Russian equivalent to English legal professional privilege. In-house communications would not be covered by advocate’s secrecy under Russian law. It was nonetheless accepted by the parties that the applicable law for the purposes of the claim to privilege was English law as the lex fori.

The Arguments

Mr Kolomoisky argued that Tatneft’s in-house lawyers were not “appropriately qualified” and were not foreign lawyers for the purpose of applying English legal advice privilege as a result of the Russian system not recognising in-house lawyers as being covered by advocate’s secrecy.

Tatneft counter-argued, citing the seminal privilege case of Three Rivers (No. 6)[2], that legal advice privilege applies to all communications made in confidence with professional legal advisers for the dominant purpose of giving or obtaining legal advice, including communications with in-house lawyers.

Tatneft also asserted that the court does not enquire into the standards of regulation or training applying to the foreign lawyer (which may offend the rules of comity) and that legal advice privilege is not confined to barristers and solicitors but extends to advice sought from a “variety of lawyer”.

The Court’s Decision

Mrs Justice Moulder ruled that legal advice privilege does apply to communications with foreign lawyers, without the need for an enquiry into how or why the foreign lawyer is regulated or what standards (i.e. professional, legal and ethical standards) apply to the foreign lawyer under the local law. She further held that it followed “as a matter of both logic and principle” that legal advice privilege applies to foreign in-house lawyers. She confirmed that foreign lawyers need not be “professional lawyers”, in the generally understood sense equated to barristers and solicitors, or “appropriately qualified” in order for legal advice privilege to apply to their communications. 

Moulder J took as her starting point the rationale for legal advice privilege, namely that it is in the public interest that clients can obtain legal advice and that these communications should be kept confidential.  Moulder J noted that, consistent with this rationale, “it is the “function” of the relationship and not thestatus” of the lawyer which is relevant in the case of foreign legal advisers”. Citing the judgment of Lord Neuberger in the Prudential case[3], Moulder J therefore stated that the only requirement for legal advice privilege to attach to communications between a client and a foreign lawyer acting in a professional capacity is that they be “in connection with the provision of legal advice”.  

Moulder J further stated that in the Prudential[4] case Lord Neuberger “accepted that the courts had not had regard to national standards or regulations as a precondition to the recognition of privilege” in respect of foreign lawyers and that the extension of legal advice privilege to foreign lawyers is based on principles of fairness, comity and convenience.  With reference to the Russian legal system, Moulder J noted that “[in Russia] half of the representatives in civil disputes including those in arbitrazh [commercial] courts are not advocates”. Moulder J observed that applying the rules of legal advice privilege in the way that Mr Kolomoisky contended would exclude all in-house lawyers and a large proportion of other lawyers working in Russia, which would “be unfair and inconvenient” especially considering that in-house lawyers cannot, by default, be advocates in Russia. Moulder J stated that this illustrated why the English courts are not interested in examining foreign lawyers’ training or discipline.  

The English High Court accordingly upheld Tatneft’s claim to legal advice privilege and refused Mr Kolomoisky’s application.

Commentary

Whilst it is a long-established principle of English law that legal advice privilege applies to advice from foreign lawyers, this case helpfully clarifies the scope of this principle and confirms that the privilege will apply to in-house foreign lawyers. The decision establishes that legal advice privilege will be applicable under English law to the communications of any type of foreign legal practitioner, regardless of their local standard of qualification or professional regulation.

The overriding objective to ensure that individuals are able to communicate with and seek advice from their advisers in confidence justifies the extension of the privilege to both in-house and external foreign lawyers. The key element for legal advice privilege to apply, being “communications passing between a client and its lawyers, acting in their professional capacity, in connection with the provision of legal advice[5], applies regardless of where the lawyer is located or his or her specific role.

The decision provides further clarity and certainty to foreign parties seeking to litigate in English courts, who can be sure that their confidential communications with their legal advisers will be protected. It also means that parties will not be unfairly disadvantaged when it comes to disclosure obligations simply because of the peculiarities of their local legal system.


[1] PJSC Tatneft v Bogolyubov and others [2016] EWHC 2816 (Comm)

[2] Three Rivers (No. 6) [2005] 1 AC 610

[3] R (on the application of Prudential plc and another) v Special Commissioner of Income Tax [2013] UKSC 1

[4] R (on the application of Prudential plc and another) v Special Commissioner of Income Tax [2013] UKSC 1

[5] R (on the application of Prudential plc and another) v Special Commissioner of Income Tax [2013] UKSC 1

[View source.]

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP | Attorney Advertising

Written by:

Morrison & Foerster LLP
Contact
more
less

Morrison & Foerster LLP on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.