Application of Legal Advice Privilege Clarified by the Court of Appeal

The Court of Appeal has recently provided useful clarification as to the application and endurance of legal advice privilege, particularly when there is no party in existence to assert it. 

Previously, in the decision of Garvin Trustees Ltd v The Pensions Regulator [2014] UKUT B8 the question had arisen as to whether a former director of a dissolved company was entitled to disclose legal advice that had been obtained by the company, or whether the privilege had to be maintained. The Upper Tribunal held that privilege is simply the right to resist the compulsory disclosure of evidence. On that basis, once the company had been dissolved, there was no party in existence able to exercise that right.

However, in Addlesee and others v Dentons Europe LLP [2019] EWCA Civ 1600 the Court of Appeal held that once a communication is privileged it will continue to be until that privilege is waived by a party entitled to do so.

The facts concerned a group of investors, led by Mr Addlesee, who brought a claim in excess of €6.5 million against Dentons Europe LLP for their role in the investor's loss of money as a result of a supposedly fraudulent investment scheme. Dentons had acted for a Cypriot company called Anabus Holdings Ltd, who had helped market the scheme, but had since been dissolved.

The claimants sought disclosure of documents in Dentons' client files that related to Anabus. On the basis of Garvin, they argued that as Anabus had been dissolved, there was no legal person entitled to assert the legal privilege, and it therefore ceased to exist.

At first instance, the High Court found that Garvin could be distinguished as a key element of that decision was that the company could no longer be restored to the register. In Addlesee, whilst the prospect of reinstatement was remote, it nevertheless remained. The High Court Master concluded that the right to legal privilege could only cease to exist when there was absolutely no prospect of it being enforced. The investors appealed.

The Court of Appeal considered the origins of legal advice privilege and the fact that it ensured that a person could consult their lawyer in confidence. LJ Lewison concluded that "it is thus the documents themselves that are privileged because of their nature; and only voluntary production that destroys that privilege". On that basis, if there exists no party to waive the right (and it has not already been waived) then it will exist in perpetuity.

The appeal was dismissed and Garvin has now been overruled with the focus squarely on whether the legal advice privilege has been waived The decision supports the concept of legal advice privilege, and seeks to remind parties of its significance. 

For any more information please contact Charles Davies on cs.davies@ashfords.co.uk from our Commercial Disputes Team.