Russell McVeagh, the leading New Zealand law firm which has faced 180 complaints of misconduct, has won a battle against the Auckland District Law Society to keep hold of legally privileged documents.

The Auckland District Law Society set up a special complaints committee to investigate Russell McVeagh in the mid-1990s after receiving nearly 180 complaints from people who had invested in bloodstock partnerships promoted by a partner at the firm.

The society then convinced the New Zealand Court of Appeal to allow it to seize legally privileged documents from Russell McVeagh, but the Privy Council has just overturned the ruling.

As well as being good news for Russell McVeagh, the Privy Council’s decision has upheld solicitors’ rights of legal professional privilege in the UK.

Privy Council decisions are not binding, but are highly persuasive in the English courts. DLA partner Richard McGrane, who acted for Russell McVeagh, said that had the ruling gone the other way, regulators in England and Wales would use it to try to seize privileged documents from law firms under investigation.

“If this ruling had gone the other way, then the Law Society of England and Wales may have said, ‘Well, here is a judgment where the Privy Council has applied the principles of English law to decide that access to privileged documents is allowed, so let’s have a crack at getting hold of them’,” he said.