06 January, 2017
The High Court in the recent case of The RBS Rights Issue Litigation  EWHC 3161 (Ch) confirmed that the definition of legal advice privilege only extends to correspondence with employees who are authorised by the company concerned to obtain and receive legal advice on the company's behalf.
The doctrine of legal advice privilege has long been a crucial exception to the requirement for disclosure in litigation proceedings and is based on the fundamental principle that communications between lawyers and their clients should not be subject to disclosure. This principle is based on the logic that correspondence between lawyers and their clients should for obvious reasons remain confidential to those parties, otherwise it would undermine the ability of lawyers to properly advise their clients.
The Courts have though traditionally been keen to restrict the scope of communications covered by legal advice privilege as the principle of disclosure is seen as a key part of the litigation process, particularly in light of the requirements contained in the Civil Procedure Rules 1998 for parties to disclosure all relevant information to facilitate the narrowing of issues and aid resolution of disputes etc.
This recent case reaffirms the long standing approach adopted in the Three Rivers District Council and others v Governor and Company of the Bank of England  UKHL 48 that the scope of legal advice privilege is to be construed narrowly. It confirms that communication between former employees or employees not authorised to receive/obtain legal advice, and their lawyers will not be subject to legal advice privilege and therefore may well be disclosable to the opponents in litigation.
The lesson here is that companies need to be very careful when communicating with their lawyers in relation to litigation or issues that may give rise to litigation as if said correspondence falls outside of that which is covered by legal advice privilege, may well be disclosable to the other side with potentially damaging consequences in any litigation. Only those who are authorised to receive and obtain such legal advice should be corresponding with the lawyers and limiting points of contact is recommended. It is also worth establishing with your lawyers from the outset who is authorised to receive or obtain legal advice and provide instructions on behalf of your company, to avoid any of the issues discussed above.
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