What is “privileged”? – Key forms of privilege under English law

“Don’t worry, it’s privileged!” – what does “privileged” actually mean under English Law and how should privilege impact how businesses communicate?

The word “privileged” is one that many clients who have been involved in litigation will be familiar with. Often, this is because they have either:

1. mistakenly believed that communications they sent were privileged (and therefore not disclosable) because they are confidential, which is not the same as privileged; or
2. been unaware of or gave no thought to the concept of privilege and wrote and sent sensitive communications in a way that means they must be disclosed.

In both these circumstances, the client could have better protected their legal position had they properly understood how privilege works.

This article provides an overview of the key forms of privilege under English law, practical considerations for business owners and their legal teams and important case law developments.

What is the purpose of privilege?

Legal professional privilege (LPP) is a fundamental legal right which, when properly applied, allows a party to withhold from disclosure certain communications and documents. It flows from the established relationship of trust that exists between a client and their lawyer. Clients must be able to speak openly with their lawyer in order that they can receive the best advice and do so knowing that those communications will not be disclosed without their consent. It is important to note that not all communications and documents will be privileged.

Main Types of Privilege

Broadly speaking, LPP has two limbs: legal advice privilege and litigation privilege. The scope of each is different and it is therefore important to understand when each will apply and what is covered.

Legal Advice Privilege

Legal advice privilege protects confidential communications between a client and their lawyer provided the dominant purpose of that communication is to receive or give legal advice.

This limb of privilege will apply in circumstances where no litigation is in progress or contemplated at the time the communications or documents are created.

Key features:

• Applies to communications with legal advisers acting in their professional capacity.

A “communication” for these purposes includes both the communication itself (e.g. the letter, email, telephone call, face-to-face discussion etc. Between the client and the lawyer) and any physical record of that communication (e.g. a note recording the contents of a telephone call).

The term legal adviser extends to solicitors, barristers and trainee solicitors. This includes in-house lawyers provided that they are advising on a legal issue. If the communication from the in-house lawyer relates to general business or commercial advice or management related issues then it will not be privileged from disclosure.

• Covers only those employees authorised to seek and obtain legal advice on behalf of the client company (Three Rivers (No 5) [2003] EWCA Civ 474). The approach adopted by the English courts (unlike other jurisdictions) has been to apply a very narrow definition of “client”. Privilege does not automatically extend to all employees and care does therefore need to be taken when producing communications or documents to ensure that privilege can be maintained in it.
• Must be confidential and legal in nature – business advice is not protected.

Litigation Privilege

Litigation privilege covers confidential communications between the client, their lawyer and third parties for the purpose of pursuing or defending actual or proposed litigation

Requirements:

• Litigation must be in progress or reasonably in contemplation.
• The communication must be for the sole or dominant purpose of pursuing/defending litigation or collecting evidence for use in the litigation.
• The communication must be confidential.
• The litigation must be adversarial, not investigative or inquisitorial.

You do not need a lawyer to be involved for litigation privilege to apply; the communications can be between a client and a third party. It is the litigation itself that triggers the privilege, not the involvement of a lawyer. 

Strategic Considerations

Defining the “Client” in Corporates

Since the case of Three Rivers (No 5), only individuals authorised to seek legal advice from solicitors are considered the “client” for legal advice privilege. This narrow definition means internal communications between employees may not be protected, even if later shared with a lawyer.

Legal teams must clearly identify which employees are part of the client group and ensure advice is sought through them.

Dominant Purpose Test

Both legal advice and litigation privilege require that the relevant communication be for the dominant purpose of giving legal advice or conducting litigation. Dual-purpose documents (e.g. legal and business strategy) may fall outside the scope if legal advice is not the primary aim.

This was reaffirmed in Jet2.com Ltd v Civil Aviation Authority [2020] EWCA Civ 35, where mixed-purpose communications were held not to be privileged.

Loss and Waiver of Privilege

Privilege can be waived explicitly or inadvertently. Some examples include:

• Express waiver: e.g. sharing privileged material with third parties either deliberately or in error
• Implied waiver: e.g. relying on legal advice as part of a defence (i.e. “I acted on advice”).
• Collateral waiver (“cherry-picking”): Partial disclosure can result in courts requiring related documents to be disclosed for context.

Careful control over circulation and disclosure is essential. 

Best Practices

• Label sensitive communications as “Privileged and Confidential – Legal Advice.”
• Limit distribution of privileged material to authorised individuals and remind colleagues that referring to extracts or summaries of legal advice in emails, minutes of meetings or other forms of communication might mean that they are inadvertently waiving privilege.
• Establish clear policies for privilege in investigations and regulatory contexts.

Recent Developments

The law on privilege can be a difficult subject to navigate and continues to provide challenges for the English courts. Recent examples from 2024 include:

• Abar Holdings SARL v Glencore PLC & Ors [2024] EWHC 3046 (Comm) where the Commercial Court found that the long established “Shareholder Rule” should no longer be followed. For over 100 years, it had been a principle of English law that a company could not claim privilege against its own shareholders, except where legal advice was provided in connection with a dispute between the company and a hostile shareholder. The Judge held that rule should not longer be applied. [Insert link to previous article on this subject]
• In BM Brazil 1 Fundo de Investimento EM Participacoes Multistrategia & Ors v Sibayne BM Brazil (PTY) Ltd & Anor [2024] EWHC 675, the court was required to consider whether a reference to legal advice in a witness statement was sufficient to waive privilege in that advice. On the facts of this case, the Judge concluded that privilege had not been waived, but it is an important reminder of the potential dangers of referring to legal advice in correspondence or other documents.
• In Ocean on Land Technology (UK) Ltd v Richard Land & Ors [2024] EWHC 396 (IPEC), the court was asked to strike out parts of a witness statement on the basis that it referred to without prejudice correspondence. The without prejudice rule excludes from disclosure any communications, whether oral or written, which are genuinely aimed at settlement. The Defendant sought to argue that those parts of the witness statement should be admitted into evidence on the basis of two limited exceptions to the without prejudice rule, but the Judge dismissed those arguments. This case highlights the difficultly in persuading a court to allow into evidence a communication ostensibly covered by without prejudice privilege.

Conclusion

Privilege remains a powerful but nuanced part of English law.

Businesses should take a proactive approach to risk manage their exposure to litigation by educating their employees on what privilege means and establishing clear guidelines on how to adopt the Best Practices set out above.

Getting privilege wrong can be costly. But when managed carefully, it remains one of the most effective tools for protecting legal strategy and communications in contentious proceedings.

How Morr & Co can help?

If you have any questions or would like any further information on the content of this article, please do not hesitate to contact our Dispute Resolution team on 0333 038 9100 or email info@morrlaw.com and a member of our expert team will get back to you.

Disclaimer
Although correct at the time of publication, the contents of this newsletter/blog are intended for general information purposes only and shall not be deemed to be, or constitute, legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article. Please contact us for the latest legal position.