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Legal Notebook: Hunt & Hunt Lawyers v Michell Morgan Nominees Pty Ltd (ACN 108 571 222) — High Court appeal
27 June 2013
The decisions of the Court of Appeal in Three Rivers District Council & Others v The Governor & Company of the Bank of England (2003) have caused widespread concern in the legal profession. These decisions effectively changed the scope of the advice privilege limb of legal professional privilege (LPP). On 26 July, the Bank of England began an appeal to the House of Lords against one of the decisions. Following recommendations from the Civil Litigation Committee, the Law Society sought and was granted leave to intervene on the grounds that the case raised important public interest issues beyond those identified by the parties.
Advice privilege protects client’s communications with their lawyers in situations that do not relate to litigation. It is important for clients because the advice sought cannot be effectively obtained unless the client is able to put all the facts before their lawyers without fear that this information might later be disclosed and used against them. The Three Rivers decisions resulted in practical difficulties for solicitors acting in non-litigious matters, both in identifying who the client is for the purposes of LPP, and in identifying what advice is legal advice, as defined by the Court of Appeal.
The right of a client to communicate with their lawyer in absolute confidence has been recognised in English and Welsh law for centuries and is a fundamental human right. This principle was most recently reaffirmed by the House of Lords in R v Special Commissioner & anor, Ex p Morgan Grenfell and Co Ltd (2002).
Practitioners’ previous understanding was that advice would be privileged if it was prudently and sensibly given in the relevant legal context. This understanding is inconsistent with the Court of Appeal’s decisions in Three Rivers, which narrowed the client’s right to communicate with their lawyer by holding that advice privilege does not apply to all communications between a solicitor and the client, but only to advice relating to legal rights and obligations.
The Court of Appeal judgment stated: “[Where] litigation is not anticipated, it is not easy to see why communications with a solicitor should be privileged. Legal advice privilege attaches to matters such as the conveyance of real property or the drawing up of a will. It is not clear why it should.”
The Law Society believes that this criticism of the availability of LPP is unjustified and could discourage clients from seeking the legal advice they need, irrespective of the risk of any future litigation. It is the Law Society’s view that legal advice privilege outside litigation is justified in the public interest.
In its submissions to the House of Lords, the Law Society dealt with the rationale for advice privilege by way of an examination of the case law. Perhaps more importantly, it also provided practical examples of the difficulties now facing the profession as a result of the Three Rivers decisions.
The Law Society is very pleased that at the end of four days of submissions, the House of Lords decided to reverse the most recent Court of Appeal decision. The House of Lords is due to publish its reasons in a written judgment in the autumn and we will not be able to assess the full ramifications for the profession until then.