Lexpert magazine features articles and columns on developments in legal practice management, deals and lawsuits of interest in Canada, the law and business issues of interest to legal professionals and businesses that purchase legal services.
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82 LEXPERT MAGAZINE | NOVEMBER/DECEMBER 2018 privilege in this country be- cause it limited litigation privi- lege to situations where litiga- tion was a 'realistic prospect,'" said Charles omson of Baker & McKenzie LLP in London. But the Court of Appeal ruled that advice whose domi- nant purpose was to avoid legal proceedings or in furtherance of settlement, was advice given for the purpose of defending such proceedings and there- fore protected by litigation privilege. e documents covered by the Court of Appeal's decision included in- terview notes and materials prepared by forensic accountants. "e Court of Appeal stated that litiga- tion privilege applies even before a formal criminal investigation is launched where the dominant purpose involved in creating the documents is to enable the company to pull together the facts," omson stated. "Still, the decision only goes so far as to bring the law into line with what the pro- fession generally understood it to be before the High Court ruling." e concern over the initial ruling as a continuing encroachment on professional privilege finds its origins some 15 years ago in the Court of Appeal's judgment in ree Rivers District Council v. e Bank of England, known as ree Rivers (No. 5). e judgement has been widely interpreted to hold that solicitor-client privilege, also known as "legal advice" privilege, attaches only to communications between lawyers and employees specifically tasked to seek and obtain legal assistance. e decision has been much criticized in the UK and abroad, by practitioners and academics alike. "ree Rivers is not really in line with the thinking in the rest of the world, including Canada, where privilege generally attaches to the corporation and includes all its offi- cers and employees," omson said. Still, the panel in SFO v. ENRC felt bound by ree Rivers, concluding that it would be up to the Supreme Court to re- view the law. omson was unimpressed, calling the Court of Appeal's reluctance to seize the opportunity and clarify the law, a "complete cop out." is having been said, the Court of Ap- peal did make it clear that if it had been open to the panel to depart from ree Riv- ers, it would have done so. "In the modern world, however, we have to cater for legal advice sought by large national corporations and indeed multi- national ones. In such cases, the informa- tion upon which legal advice is sought is unlikely to be in the hands of the main board or those it appoints to seek and re- ceive legal advice," the court noted. "If a multi-national corporation cannot ask its lawyers to obtain the information it needs to advise that corporation from the corpor- ation's employees with relevant first-hand knowledge under the protection of legal advice privilege, that corporation will be in a less advantageous position than a smaller entity seeking such advice." Whatever its failings, then, it's no sur- prise that the UK Bar has welcomed the decision. "In a world where regulators increasingly investigate companies and individuals, and where the consequences, (including crim- inal sanctions, can be very serious, this judgment clarifies the extent of the fun- damental legal safeguard of privilege," said Ruth Cowley in Norton Rose Fulbright's London office. Canadian companies with UK oper- ations will most likely feel the same way. A RECENT DECISION of England and Wales's Court of Appeal has allayed con- cerns about the narrowing scope of profes- sional privilege afforded to legal advice in the United Kingdom. e decision in Director of the Serious Fraud Office (SFO) v. Eurasian Natural Resources Corporation (ENRC), released in September, overturned a High Court ruling last year that required ENRC to hand over working papers and notes pre- pared by lawyers for an internal investiga- tion regarding allegations of wrongdoing, to the SFO. ENRC has consistently denied that any wrongdoing occurred, saying that it was investigating allegations against busi- nesses it was looking to buy. e company strongly maintains that the allegations were unsubstantiated. e High Court ruled that the materi- als were not covered by litigation privilege because they were created before criminal proceedings were contemplated. e deci- sion was generally taken to mean that any organization, from multinationals to small local business, would have to divulge their private communications with their lawyer. "e High Court ruling created real concern about the state of professional Decision of Court of Appeal allays concerns about narrowing scope of professional privilege BY JULIUS MELNITZER UK clarifies scope of privilege PHOTO: SHUTTERSTOCK | PRIVILEGE | THE BORDER