Privilege and corporate clients: the wait goes on

As discussed in our previous article Crime Fraud and Investigations in 2017: Guidance on Privilege, one of the developments most keenly awaited in 2017 was whether the long-standing difficulties around identifying the client within a company for privilege purposes might be addressed by the Supreme Court.

Since 2003, and the Court of Appeal’s decision in Three Rivers (No 5), it has been the position that legal advice privilege will not attach to communications between a company’s lawyers and any employee of the company, but instead only those within the company with authority to instruct lawyers. This means that when lawyers interview employees to ascertain facts for the purpose of giving advice, notes of those interviews will not benefit from legal advice privilege unless the employees were empowered to seek legal advice for the company.

In the RBS Rights Issue Litigation, RBS sought to claim privilege over notes of 124 interviews conducted by its US lawyers. The bank was unsuccessful, for reasons explored in our article, but the resulting judgment gave rise to the possibility of Three Rivers (No 5) being considered by the Supreme Court. The judge granted a “leapfrog” certificate to allow RBS to appeal straight to the Supreme Court, but on 03 February 2017, we learnt that the appeal had been withdrawn.

The wait, therefore, goes on for a challenge to Three Rivers (No 5). However, given the current number of investigations in which prosecuting authorities are challenging assertions of privilege by companies, we suspect the wait may not be all that long. It is to be hoped that the Supreme Court will consider the issue and lay down a more practical basis for legal privilege within the context of large organisations, and in particular in investigations.