Clive Boxer warns of the encroaching US trends in privilege.

Clive Boxer is a consultant at Davies Arnold Cooper.

Any commercial lawyer with experience of US litigation will know the golden rule in the US is to make as few notes as possible because they may be disclosed however much one tries to cloak them in professional privilege.

In Barclays Bank plc v Eustice (1995) Lord Justice Schiemann delivered an extraordinary judgment in the Court of Appeal. So indicative of an attempt to defraud creditors was the defendants' action – "iniquitious" was the term used – that the solicitor's file of papers was disclosable to a third party.

Barclays had lent a substantial sum to the Eustice family who had farmed an area of land for over 190 years. They were anxious to keep the land in the family but were heavily indebted to the bank and in default. A transfer was effected by the parents to the children.

The transfer looked like an attempt to get the family assets out of the hands of the bank, which sought discovery of the family solicitor's files relating to the conveyancing transactions. The court ordered the file to be disclosed. The evidence pointed in one direction; although there was no clear proof of a fraudulent preference, it looked obvious. The file was no longer protected by privilege.

Solicitors now have to consider the moral virtues of the steps taken by clients as their files may be disclosable if anything untoward is happening.

In Kershaw v Whelan (TLR 20/12/95) Justice Ebsworth held that a client's file of correspondence with a previous solicitor was disclosable when the client was suing another solicitor for negligence. The privilege between client and previous solicitor could be negated when trying to establish that the client was a vexatious litigant against lawyers.

These cases show solicitors may have to reveal their files whether they like it or not. When a client arrives to discuss a charge of fraud against then everything said is privileged. When the solicitor takes action to transfer assets for a potentially fraudulent reason on the command of the client, the instructions and the action taken may not be protected by privilege. The line is a thin one. As contingency fees become more prevalent we are becoming more American.