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England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Three Rivers District Council & Ors v The Bank of England  EWCA Civ 218 (01 March 2004)
Cite as:  QB 916,  EWCA Civ 218,  2 WLR 1065,  3 All ER 168
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COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION (TOMLINSON J)
London, WC2A 2LL
B e f o r e :
LORD JUSTICE LONGMORE
LORD JUSTICE THOMAS
| THREE RIVERS DISTRICT COUNCIL & ORS
|- and -
|THE GOVERNOR & COMPANY OF THE BANK OF ENGLAND
Smith Bernal Wordwave Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
Gordon Pollock QC, Barry Isaacs & Nathan Pillow (instructed by Lovells) for the Respondents
Crown Copyright ©
Lord Phillips, MR:
This is the judgment of the Court to which all members have contributed.
"It is declared that the only documents or parts of documents in the Bank's control and coming into existence between the closure of BCCI SA on 5 July 1991 and the issue of the present proceedings in May 1993 which the Bank is entitled to withhold from inspection on the ground of legal advice privilege are:-
(1) communications passing between the Bank and its legal advisers (including any solicitor seconded to the Bank) for the purposes of seeking or obtaining "legal advice" (which means, for the avoidance of doubt, advice concerning the Bank's rights and obligations); and
(2) any part of a document which evidences the substance of such a communication."
He then ordered a further and better list to be prepared in accordance with this declaration.
(1) the judge was wrong to hold that this Court in Three Rivers (No 5) had, expressly or by necessary inference, already decided that the documents now sought did not come into existence for the purpose of giving or obtaining legal advice;
(2) the judge should therefore have looked at the matter afresh and decided whether the documents did come into existence for that purpose; he should then have decided that the purpose for which the documents came into existence was so that Freshfields could give and the BIU receive legal advice;
(3) the phrase "legal advice" included giving legal assistance in the relevant legal context;
(4) the relevant legal context was, immediately, the Bingham inquiry but also the possible ramifications that might occur after the inquiry;
(5) part of that assistance was the use of Freshfields' skills in trying, by presenting material to the Bingham inquiry in what seemed to them and the BIU the most effective way, to counteract any suggestion of blameworthiness on the part of the Bank's officials;
(6) assistance of this kind, which many solicitors provide for their clients if they take part in a non-statutory inquiry, is part of the ordinary business of a solicitor; documents coming into existence as part of that assistance are, therefore, privileged;
(7) in the absence of an assurance that such communications are privileged, parties will no longer co-operate with non-statutory inquiries.
(1) on a proper reading of the judgment in Three Rivers (No 5), this Court had already decided that the documents, of which he now sought disclosure, had not come into existence for the purpose of giving or obtaining legal advice;
(2) whether that had been decided or not, the documents did not come into existence for that purpose and, certainly, any such purpose was not the dominant purpose;
(3) whereas legal advice, in the context of legal advice privilege, could include "assistance" that assistance had to be rendered in the context of a request for legal advice in connection with a legal transaction;
(4) neither the Bingham inquiry nor its ramifications could be a legal transaction for the purpose of legal advice privilege;
(5) assistance to counteract suggestions of blameworthiness was no part of legal advice;
(6) before legal advice privilege can arise, there must be a context of legal advice being requested;
(7) the suggestion of non-cooperation with non-statutory inquiries was, if relevant at all, much exaggerated.
Did Three Rivers (No 5) decide the issue?
The nature of the advice
"… the evidence demonstrates that assistance and advice was sought not as to what was required to be done in order to comply with the Bank's obligations but rather on how to present its evidence to the inquiry in the way least likely to attract criticism. That is not a matter concerning the Bank's rights and obligations."
Subsequently, at paragraph 16, he added:-
"Of course it is possible that the dominant purpose of some communications between the BIU and Freshfields during the period when the conduct of the inquiry was a live issue may have been the provision of advice as to the legal rights and obligations of the Bank as opposed to the question how the Bank's evidence might be presented to the inquiry in the way least likely to attract criticism."
The meaning of 'legal advice'
"If, touching matters that come within the ordinary scope of professional employment, they receive a communication in their professional capacity, either from a client, or on his account, and for his benefit in the transaction of his business…they are not only justified in withholding such matters, but bound to withhold them."
"for a person at times requires the aid of professional advice upon the subject of his rights and liabilities, with no references to any particular litigation, and without any other reference to litigation generally than all human affairs have, in so far as every transaction may, by possibility, become the subject of judicial inquiry….The foundation of this rule is not difficult to discover. It is not (as has sometimes been said) on account of any particular importance which the law attaches to the business of legal professors, or any particular disposition to afford them protection, though certainly it may not be very easy to discover why a like privilege has been refused to others, and especially medical advisers. But it is out of regard to the interests of justice, which cannot go on, without the aid of men skilled in jurisprudence, in the practice of the courts, and in those matters affecting rights and obligations which form the subject of all judicial proceedings. If the privilege did not exist at all, every one would be thrown upon his own legal resources"
"It must not be supposed that there is any principle which says that every confidential communication which it is necessary to make in order to carry on the ordinary business of life is protected. The protection is of a very limited character, and in this country is restricted to the obtaining the assistance of lawyers, as regards the conduct of litigation or the rights to property. It has never gone beyond the obtaining legal advice and assistance, and all things reasonably necessary in the shape of communication to the legal advisers are protected from production or discovery in order that that legal advice may be obtained safely and sufficiently."
Brett LJ added, at p. 683:-
"The rule as to the non-production of communications between solicitor and client is a rule which has been established upon grounds of general or public policy. It is confined entirely to communications which take place for the purpose of obtaining legal advice from professional persons. It is so confined in terms, it seems to me it is so confined in principle, and it does not extend to the suggested case."
"I am of the opinion that the privilege extends to all communications between a solicitor, as such, and his client, relating to matters within the ordinary scope of a solicitor's duty."
The context in which this statement was made appears in the following further passage from his judgment:-
"Now, it cannot be denied that it is an ordinary part of a solicitor's business to treat for the sale or purchase of estates for his clients. For some purposes his intervention is indispensable in such transactions: he is to draw the agreements, to investigate the title, to prepare the conveyance. All these things are in the common course of his business. But it is said that the fixing of a reserved bidding and other matters connected with the sale are not of that character, inasmuch as they might be entrusted equally well to anyone else. It is impossible, however, to split the duties in that manner without getting into inextricable confusion. I consider them all parts of one transaction – the sale of an estate : and that a transaction in which solicitors are ordinarily employed by their client. That being the case, I consider that all communications which may have taken place between the witness and his client in reference to that transaction are privileged."
"The relationship of solicitor and client being once established, it is not a necessary conclusion that whatever conversation ensued was protected from disclosure. The conversation to secure this privilege must be such as, within a very wide and generous ambit of interpretation, must be fairly referable to the relationship …"
At issue in that case was whether a conversation between a person seeking the services of a solicitor in relation to the purchase of real property and the solicitor was privileged in circumstances where the solicitor was being requested to lend the deposit payable under the transaction but was not prepared to do so and declined to act. In holding that the conversation was privileged, Lord Buckmaster said this at p. 568:-
"… the idea that it was possible to split the interview into two parts, treating the first as a proposal to lend money personally and the second, contingent on this, to act as a solicitor is, to my mind, outside the bounds of reasonable inference.
I am not prepared to assent to a rigid definition of what must be the subject of discussion between a solicitor and his client in order to secure the protection of professional privilege. That merely to lend money, apart from the existence or contemplation of professional help, is outside the ordinary scope of a solicitor's business is shown by the case of Hagart and Burn-Murdoch v. Inland Revenue Commissioners  AC 386. But is does not follow that, where a personal loan is asked for, discussions concerning it may not be of a privileged nature.
In this case the contemplated relationship was that of solicitor and client, and this was sufficient."
"Now, if a man goes to a solicitor, as a solicitor, to consult and does consult him, though the end of the interview may lead to the conclusion that he does not engage him as his solicitor or expect that he should act as his solicitor, nevertheless the interview is held as a privileged occasion."
The most detailed and precise analysis is to be found in this passage of the speech of Lord Atkin at pp. 580-1:-
"The test for such protection has been defined in different words in a number of cases. I think it is best expressed in two phrases used in the Court of Appeal in the leading case of O'Shea v. Wood  p. 286, 289. Lindley LJ adopts the language of Cotton LJ in Gardner v. Irvin (1878) 4 Ex D. 49, 53 : "professional communications of a confidential character for the purpose of getting legal advice." Kay LJ refers to the language of Kindersley VC in Lawrence v Campbell (1859) 4 Drew. 485, 490, and adopted by Lord Selborne LC in Minet v Morgan (1873) LR 8 Ch. 361, 368, communications passing as "professional communications in a professional capacity." The Lord Justice prefers the former phrase, and emphasizes the importance of the confidential character. As to this it is necessary to avoid misapprehension lest the protection be too limited. It is I think apparent that if the communication passes for the purpose of getting legal advice it must be deemed confidential. The protection of course attaches to the communications made by the solicitor as well as by the client. If therefore the phrase is expanded to professional communications passing for the purpose of getting or giving professional advice, and it is understood that the profession is the legal profession, the nature of the protection is I think correctly defined."
"In Minter v Priest … the House of Lords affirmed that a communication between solicitor and his client is privileged provided the relationship of solicitor and client is established and that the communication is such that the communication is "such as, within a very wide and generous ambit of interpretation, must be fairly referable to the relationship …" …
In the present case the relationship of solicitor and client between the American attorneys and the plaintiffs is undoubted. The plaintiffs were seeking and the American attorneys were proffering advice in connection with a business transaction. The fact that litigation was not then contemplated is irrelevant. This appeal may serve a useful purpose if it reminds the profession that all communications between solicitor and client where the solicitor is acting as a solicitor are privileged subject to exceptions to prevent fraud and crime and to protect the client and that the privilege should only be waived with great caution."
"It is of the highest importance … that all communications between a solicitor and a client upon a subject which may lead to litigation should be privileged, and I think the court is bound to consider that … almost any contract entered into between man and man … may lead to litigation before the contract is completed. Any correspondence passing between the date of the contract which afterwards becomes the subject of litigation and the litigation itself is, in my opinion, on principle, within the privilege extended to the non-production of communications between solicitors and clients … it is absolutely essential to the interest of mankind that a person should be free to consult his solicitor upon anything which arises out of a contract which may lead to litigation; that the communications should be perfectly free, so that the client may write to the solicitor, and the solicitor to the client, without the slightest apprehension that those communications will be produced if litigation should afterwards arise on the subject to which the correspondence relates."
"19. What distinguishes legal advice from other kinds of professional advice is that it is concerned exclusively with rights and liabilities enforceable in law, i.e. in the ultimate resort by litigation in the courts or in some administrative tribunal. It is, of course, true that on many matters on which a client consults his solicitor he does not expect litigation and certainly hopes that it will not occur; but there would be no need for him to consult his solicitor to obtain legal advice unless there were some risk of litigation in the future in connection with the matter upon which advice is sought. As Lord Brougham pointed out, it is to minimise that risk by ensuring that he so conducts his affairs as to make it reasonably certain that he would succeed in any litigation which might be brought in connection with them, that the client consults his solicitor at all."
"I am informed by Lord Kingsdown [the Governor of the Bank of England at the time], . . . that from the time of the Government's decision to establish the Bingham Inquiry it was clear to him that the Inquiry would require the assistance of the Bank. It was also obvious to Lord Kingsdown that anything the Bank did or said in relation to the Inquiry was legally very sensitive. This concern underpinned the retention of Freshfields and Counsel to advise the Bank from the earliest stages of the Inquiry (see below). The Bank was conscious of the need to deal with the Bingham Inquiry as efficiently and effectively as possible and to seek to limit any "blame" (the word used by the Prime Minister in Parliament) that might be attached to the Bank or any criticism of its conduct of the supervision of BCCI. The Bank remained, at that time, responsible for the supervision of banks under the Banking Act 1987 and any criticism and consequential damage to its reputation (or to that of any of its senior officials in the Banking Supervision Division) might impair its ability to supervise efficiently. The Bank was also conscious from a very early stage of the danger of litigation against the Bank (or otherwise affecting the Bank) that might follow if the Bank were the subject of criticism or if blame was attached to it or any of its officials."
Mr Croall does not explain why Lord Kingsdown thought that anything done by the Bank was "legally" very sensitive as opposed to sensitive in general as a result of possible "blame" that might be attached to the Bank which appears to have been Lord Kingsdown's primary concern. The last sentence, however, does refer to the danger of litigation "if the Bank were the subject of criticism or if blame were attached to it." Mr Thanki submitted that this statement was a complete answer to Mr Pollock's application and claimed that the judge had wrongly ignored this vital evidence.
"Although originally confined to advice regarding litigation, the privilege was extended to non-litigious business. Nevertheless, despite that extension, the purpose and scope of the privilege is still to enable legal advice to be sought and given in confidence. In my judgment, therefore, the test is whether the communication or other document was made confidentially for the purpose of legal advice. Those purposes have to be construed broadly. Privilege obviously attaches to a document conveying legal advice from solicitor to client and to a specific request from the client for such advice. But it does not follow that all other communications between them lack privilege. In most solicitor and client relationships, especially where a transaction involves protracted dealings, advice may be required [as] appropriate on matters great or small at various stages. There will be a continuum of communication and meetings between the solicitor and client. … Where information is passed by the solicitor or client to the other as part of the continuum aimed at keeping both informed so that advice may be sought and given as required, privilege will attach. A letter from the client containing information may end with such words as "please advise me what I should do". But, even if it does not, there will usually be implied in the relationship an overall expectation that the solicitor will at each stage, whether asked specifically or not, tender appropriate advice. Moreover, legal advice is not confined to telling the client the law; it must include advice as to what should prudently and sensibly be done in the relevant legal context."
"once a solicitor had been instructed, legal advice privilege extend[s] to all communications between solicitor and client on matters within the ordinary business of the solicitor and referable on the relationship."
Mr Pollock submitted that this summary was not correct. We agree with him, if it is considered in isolation. The material passage in the judgment of Taylor LJ is at pp. 331-2 where, after considering a number of authorities, he said this:-
"It follows from this analysis that those dicta in the decided cases which appear to extend privilege without limit to all solicitor and client communications upon matters within the ordinary business of a solicitor and referable to that relationship are too wide. It may be that the broad terms used in the earlier cases reflect the restricted range of solicitors' activities at the time. Their role then would have been confined for the most part to that of lawyer and would not have extended to business adviser or man of affairs. To speak therefore of matters "within the ordinary business of a solicitor" would in practice usually have meant the giving of advice and assistance of a specifically legal nature. But the range of assistance given by solicitors to their clients and of activities carried out on their behalf has greatly broadened in recent times and is still developing. Hence the need to re-examine the scope of legal professional privilege and keep it within justifiable bounds"
We agree with this observation of Taylor LJ to the effect that in circumstances where the traditional role of a solicitor has expanded, it is necessary to keep legal professional privilege within justifiable bounds. The fact that work done is within what may be the ordinary business of a solicitor does not necessarily mean that it attracts privilege. This case raises the question of the scope of the 'justifiable bounds'.
"A witness before any such tribunal shall be entitled to the same immunities and privileges as if he were a witness in civil proceedings before the High Court or the Court of Session."
This provision begs the question rather than answers it. It seems to us that its principal target is protection in relation to evidence given in the proceedings. If a witness in civil proceedings consults a lawyer, this will normally be because of concern as to the impact of the proceedings on his rights and liabilities. Communications in such circumstances will be privileged whether or not the proceedings are in court, before a statutory tribunal or before a non-statutory tribunal. If the witness' concern is only to have advice on presentation, the question remains of whether the advice attracts privilege. We know of no case in which the issue now under consideration has been raised. It can be argued that an individual whose reputation is in jeopardy at a Public Inquiry, but who needs no advice in relation to his legal rights and obligations, ought to be able to seek the assistance of a solicitor without inhibition. Is reputation to be equated with legal rights and obligations so that the advice of a solicitor for the purpose of protecting reputation attracts legal advice privilege?