Privilege Repurposed: Legal Advice Privilege, the Dominant Purpose Test and R(Jet2) v CAA (2020)

Summary

On 28 January 2020, the Court of Appeal delivered its important judgment in Jet2 (R. (on the application of Jet2.com Ltd) v Civil Aviation Authority [2020] EWCA Civ 35), confirming the “dominant purpose test” for legal advice privilege.

In this article, Rob Hammond addresses the practical guidance and significant consequences of the new test for the oft-difficult issues of privilege in modern legal communications.

Facts and Issues

In 2017 and 2018 the Civil Aviation Authority (“CAA”) published a press release and correspondence concerning Jet2’s refusal to join the CAA consumer dispute resolution scheme. Jet2 sought to challenge the CAA’s publications by judicial review.

In those proceedings, Jet2 applied for the disclosure of emails concerning the CAA’s internal response to Jet2’s complaint following the press announcement. They also sought the drafts of the CAA’s subsequent reply to Jet2. The CAA refused disclosure on the grounds of legal advice privilege (“LAP”). The emails and drafts involved multiple recipients, some of whom were in-house lawyers. Nonetheless, a later witness statement, relied on by the CAA, voluntarily disclosed a privileged email from the relevant period.

At first instance, Morris J held that large portions of the documents in dispute were not privileged. In a subsequent hearing, he concluded that by its later voluntary disclosure, the CAA had lost privilege in the remaining documents by collateral waiver. The CAA appealed both decisions on the following grounds:

1. The judge wrongly concluded that LAP is subject to a “dominant purpose test”: i.e. that the communication or document was brought into existence for the dominant purpose of giving or seeking legal advice;
2. In applying that test, the judge erred in his approach to multi-addressee communications sent to both lawyers and non-lawyers;
3. The judge erred in holding that emails and their attachments must be considered separately for the purposes of determining privilege; and,
4. The judge erred in his approach to collateral waiver.

The Court of Appeal’s Decision

1. 1. LAP and Dominant Purpose

Hickinbottom LJ identified five propositions going to LAP, summed up at [69]:

• • • LAP applies to in-house lawyers [44];
    • LAP will continue to apply to communications disseminating, considering or applying privileged advice internally [45];
    • Third-party information passed to a solicitor will not usually attract LAP [46];
    • The client is defined narrowly as those in a company authorised to seek and receive legal advice. Material collected by a client from third parties or independent agents for the purpose of instructing lawyers to advise is not subject to LAP. Hickinbottom LJ expressed his grave regret that the House of Lords in Three Rivers (No. 5) was binding in this regard [48, 57];
    • Legal advice must be given in a “legal context (the first limb)” but is otherwise “widely defined (the second limb)” [60]; and,
    • Crucially, he strongly disagreed with the obiter remarks of the Court of Appeal in SFO v. ENRC [2018] EWCA Civ. 2006 (“Eurasian”) which refused to approve the “tautologous” dominant purpose test. After a lengthy exposition of the law, he held that LAP is subject to a dominant purpose test in English law.

1. 2. LAP and Multi-Addressee Communications

Hickinbottom LJ’s approval of the dominant purpose test was dispositive of this ground to a large extent. The CAA recognised that many of the emails sent to non-lawyers and in-house counsel could not be privileged on that ground.

However, Hickinbottom LJ held the approach to LAP in multi-addressee communications is as follows [100]:

• • • The role of the lawyer is a useful starting point, but the test must be applied on a document by document basis;
    • When determining the purpose of a document, the wide scope of “legal advice” and the concept of the “continuum of communications” must be considered;
    • Responses from lawyers containing legal advice will almost certainly be privileged;
    • Each recipient in a group email should be treated as if receiving a separate email. A rule of thumb will be to consider whether, if sent to the lawyer alone, a document would be privileged. If so, one must then ask whether any emails sent to the non-lawyers are also privileged, e.g. because the email is a dissemination of legal advice. The test nonetheless remains one of dominant purpose; and,
    • Meetings are subject to the same considerations. Legal advice given at meetings is privileged, but the mere presence of a lawyer is insufficient to cloak a commercial meeting with privilege. As above, the test remains one of dominant purpose.

Applying this approach, Hickinbottom LJ held that the CAA’s voluntarily disclosed email was not privileged.

1. 3. Separate Consideration of Emails and Attachments

Hickinbottom LJ relied on the established principle that non-privileged documents cannot acquire privilege simply by being sent to lawyers: Imerman v Tchenguiz [2009] EWHC 2901 at [14]. On that basis, separate analysis must be given to substantive documents and their attachments. Given that attachments may have been “received or created by the sender, [they] may require discrete considerations” when assessing LAP [107].

4. Collateral Waiver

Given his finding on Ground 2, Hickinbottom LJ’s reasoning on collateral waiver is obiter. Hickinbottom LJ concluded that the purpose of collateral waiver is to secure fairness by preventing misleading partial disclosures [111].

Disclosure must therefore be made in respect of the entire “transaction” to which the documents voluntarily disclosed relate [113]. The court will construe that transaction objectively [114]. In this regard, the purpose and nature of the voluntary disclosure is crucial to issues of unfairness and the breadth of the transaction [118,119].

In Jet2, “the relevant transaction so far as the voluntary disclosure is concerned [was] restricted to the 24 January 2018 email itself. Fairness [did] not require more” [120], “it [could not] be right that such a modest [purpose and] voluntary disclosure could result in collateral waiver of all the internal communications” [119].

Practical Impact of the Case

Since its inception, the doctrine of privilege has been beset with complexity. Hickinbottom LJ’s judgment adds real clarity to the law of privilege in four ways:

1. 1. Firstly, Jet2 confirms that the dominant purpose test applies to both LAP and litigation privilege. This is important in the context of the modern legal profession, where the purpose of a document will often be unclear. For example, non-lawyer experts are increasingly involved in legal matters; more lawyers are moving in-house, fulfilling both commercial and legal roles; large non-law corporations, such as the Big Four accountancy firms are entering the legal market; and there is a greater expectation that law firms will provide non-legal, wraparound services. These trends have made assessing LAP more difficult. This is especially true for the large document reviews now demanded by litigation, investigations and regulatory work. Focus on the dominant purpose test should bring greater clarity to this area.

The test also brings English law into comity with other common law jurisdictions in Australia, Singapore and Hong Kong. This will benefit international law firms servicing those markets, and other firms providing international advice. Put simply, harmonised doctrines of privilege reduce complexity and the risk of inadvertent waiver of privilege in multinational communications.

1. 2. Secondly, this is a thoroughly practical judgment. Where other cases have failed to do so, it deals with the reality of assessing privilege in daily practice:

• • • Lawyers will be familiar with convoluted email chains, involving multiple recipients, some of whom are non-lawyers. Hickinbottom LJ was alive to this, stating that previous cases “fail to take into account the possibility that a communication to a lawyer to obtain legal advice may be part of a multi-addressee email which also seeks advice/input from non-lawyers” [89(iii)]. At [100], the judgment contains a thorough nine sub-paragraphs of guidance on the issue.
    • After the first instance decision, the CAA’s internal lawyers had struggled to determine a practical approach to documents that disclosed the nature of legal advice. Hickinbottom LJ’s judgment at [101] is clear: such documents must be considered against the whole context of the case, but it is unnecessary that legal advice is specifically requested therein.
    • As above, at [108] the judgment also provides express guidance on the approach to be taken in privilege reviews of emails and their attachments, which must be considered separately from one another.

1. 3. Thirdly, the decision heaps more pressure on the House of Lords’ anachronistic definition of “client” in Three Rivers (No.5). LAP is a privilege, the scope of which must be carefully limited: [55]. However, the present control mechanism of the narrowly defined client is injurious to large corporations. As Sir Geoffrey Vos C rightly recognised in Eurasian, at [127]:

“[L]arge corporations need, as much as small corporations and individuals, to seek and obtain legal advice without fear of intrusion. […] If a multi-national corporation cannot ask its lawyers to obtain the information it needs to advise that corporation from the corporations employee’s with relevant first-hand knowledge, under the protection of [privilege], that corporation [is disadvantaged…] Whatever the rule is, it should be equally applicable to all clients, whatever size or reach.

Judgment from the Supreme Court will be required to overturn Three Rivers (No. 5). However, the recognition of the dominant purpose test may provide a fairer and more effective limitation of LAP, for future courts to apply.

1. 4. Finally, the case provides a welcome (albeit obiter) reminder of the dangers posed by the doctrine of collateral waiver. Tactical consideration must be given to the ambit of the relevant “transaction” in respect of which disclosure is volunteered, and careful attention paid to the “purpose and nature” of the voluntary disclosure.

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