Regulation 

Keep informed on confidentiality

Keep informed on confidentiality

When anyone speaks to their lawyer, they probably expect that their conversation, along with any advice provided, will always be treated as confidential. 

Such advice is expected to be strictly confidential and not available for subsequent scrutiny or disclosure.

Well, in some situations, you may be wrong.

As a litigation and commercial lawyer for some 37 years, your understanding would also be my expectation. Anyone consulting their legal advisers should be able to do so without fear of their dirty laundry being washed in public. And generally speaking, you would be right.

Or at least prior to a Supreme Court decision dating from 2004, (Three Rivers District Council and Others v The Governor and Company of the Bank of England [2004] UKHL 48), you would have been right.

With Three Rivers, the ground shifted and as a consequence the confidentiality of communications between lawyer and client has been seriously undermined.

Avoid archaic jargon

In legal jargon, discussions between a lawyer and his or her client are protected by something called ‘legal advice privilege’. This term, rather like the concept itself, is rather archaic and not much used outside of legal circles.

Broadly speaking, communications between a lawyer and his or her client are protected by legal advice privilege – but let us avoid jargon and call it 'legal confidentiality'. Another important category are exchanges between a lawyer, a client, and a third party where the dominant purpose is in advice given in anticipation of an expected dispute.

This is called 'litigation privilege'. Again, in simpler terms, let us call this 'dispute confidentiality'.

Key Points

  • When anyone speaks to their lawyer, they would expect a certain degree of confidentiality
  • If the individual receiving or giving advice has not been expressly authorised, then that advice may not be confidential
  • Clients need to know when their discussions with their lawyer are confidential

In Three Rivers, the Supreme Court decided that in order for exchanges between you and your lawyer to attract legal confidentiality, the individual who you were in communication with would need to have been expressly authorised to do so.

Put simply, if the individual receiving or giving advice has not been expressly authorised, then that advice might not be confidential, and might have to be disclosed.

Seem unreasonable? I can only agree.

This is not merely a theoretical problem; I have personally seen situations where the legal qualifications, professional standing and authority of the individual concerned have been rigorously examined in order to determine whether relevant documents are entitled to the protection of confidentiality.

The real issue is whether such an outdated concept is relevant and applicable to modern businesses that may not be organised along traditional lines, but operate across borders and in multiple jurisdictions where different rules and expectations apply.

Take for example a situation where directors of a special purpose vehicle based in Panama take instructions from a family office based in Switzerland, and then the in-house lawyer of the family office takes instructions from an ultimate beneficial owner.

In that example, the board of directors of the SPV are taking instructions from, and not giving instructions to, the lawyer. Moreover, where the lawyer is not legally qualified and they share their advice with a number of other colleagues who are similarly not qualified, to whom does confidentiality attach? When is it lost?

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