Three Rivers District Council & Ors v The Bank of England

Factual and Procedural Background

This appeal arises from a prior judgment concerning a disclosure application involving Company A (the Bank) and relates to documents prepared by employees or former employees of Company A intended for its solicitors, Company B ("Freshfields"). The Court previously held that such documents were not protected by litigation privilege and that legal advice privilege only extended to communications strictly between a client (or agent) and its solicitor. The liquidators challenged Company A's claim to privilege on the basis that the documents were not prepared for the dominant purpose of obtaining legal advice but to assist an inquiry into the collapse of a financial institution, conducted by a judge at the request of the Government and Company A. The Court accepted that these documents were not privileged as they were prepared primarily to comply with the duty of providing relevant factual material to the inquiry. Subsequently, the liquidators withdrew a concession regarding communications between Company B and an internal inquiry unit ("BIU"), leading to further examination of the scope of legal advice privilege. The judge declared that only communications between Company A and its legal advisers for the purpose of seeking legal advice concerning Company A's rights and obligations were privileged and ordered a revised list of privileged documents accordingly.

Legal Issues Presented

1. Whether the judge erred in concluding that the Court had already decided the documents in question were not created for the purpose of giving or obtaining legal advice.
2. Whether communications between Company B and the BIU, relating to advice on presenting evidence to a non-statutory inquiry, constitute "legal advice" attracting legal advice privilege.
3. The proper scope and meaning of "legal advice" within the context of legal advice privilege.
4. Whether legal advice privilege extends to advice given in the context of non-statutory inquiries, particularly when the advice relates to presentation rather than legal rights and obligations.
5. Whether the expansion of the solicitor's professional role affects the scope of legal advice privilege.

Arguments of the Parties

Appellant's Arguments (Company A)

• The judge was incorrect to hold that the Court had already decided the documents were not created for the purpose of legal advice.
• The judge should reconsider whether the documents were created for obtaining legal advice, which would include advice given by Company B to the BIU.
• The term "legal advice" should encompass legal assistance in the relevant legal context, including the inquiry and its possible consequences.
• Part of the advice involved using Company B's skills to present material to the inquiry in a way that would protect Company A and its officials from blame.
• Such assistance is a normal part of a solicitor's business and should be privileged.
• Without assurance of privilege, parties may be reluctant to cooperate with non-statutory inquiries.

Respondent's Arguments (Liquidators)

• The Court had already decided that the documents were not created for the purpose of obtaining legal advice.
• Even if undecided, the documents were not created for such a purpose, and any legal advice was not the dominant purpose.
• Legal advice privilege requires that assistance be rendered in connection with a legal transaction.
• The inquiry and its ramifications do not constitute a legal transaction for privilege purposes.
• Advice aimed at counteracting suggestions of blameworthiness is not legal advice.
• Legal advice privilege requires a context of a request for legal advice.
• The suggestion that lack of privilege would harm cooperation with inquiries is exaggerated.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Three Rivers District Council v Bank of England (No 5) [2003] EWCA Civ 474	Legal advice privilege applies only to communications between client (or agent) and solicitor for the dominant purpose of obtaining legal advice.	Used as foundational authority for limiting privilege to advice concerning legal rights and obligations.
Re L [1997] AC 16	No litigation privilege applies to documents prepared without litigation in prospect.	Supported the absence of litigation privilege over the documents in question.
Greenough v Gaskell (1833) 1 My & K 98	Privilege protects communications between lawyer and client relating to rights and liabilities enforceable in law.	Clarified that legal advice privilege does not extend beyond advice about legal rights and liabilities.
Wheeler v Le Marchant (1881) 17 Ch D 675	Legal advice privilege is confined to communications for obtaining legal advice related to rights and property.	Supported restrictive interpretation of legal advice privilege.
Carpmael v Powis (1846) 1 Ph 687	Privilege extends to communications within the ordinary scope of solicitor’s duty related to legal transactions.	Distinguished advice related to legal obligations from other communications.
Minter v Priest [1930] AC 558	Privilege applies to communications fairly referable to solicitor-client relationship.	Confirmed broad but not unlimited scope of privilege within solicitor-client communications.
Great Atlantic Insurance v Home Insurance [1981] 1 WLR 529	All communications between solicitor and client in the ordinary course of solicitor’s business are privileged subject to exceptions.	Used to discuss the extent of privilege in non-litigious contexts.
Balabel v Air India [1988] Ch 317	Legal advice privilege covers confidential communications made for the purpose of legal advice, construed broadly but within justifiable bounds.	Emphasized the need to balance solicitor’s expanded role with limits on privilege.

Court's Reasoning and Analysis

The Court examined whether advice given by Company B to the BIU concerning the presentation of evidence to a non-statutory inquiry constituted "legal advice" for the purposes of legal advice privilege. It noted that legal advice privilege traditionally protects communications related to legal rights and obligations enforceable by litigation or administrative proceedings. The Court reviewed authoritative precedents emphasizing that privilege does not extend to all communications with solicitors but is limited to those seeking professional legal advice concerning rights and liabilities.

The Court acknowledged that the role of solicitors has expanded over time but stressed the necessity of maintaining justifiable bounds on privilege. It found that advice aimed solely at presenting evidence in a way that minimizes criticism or blame does not equate to legal advice concerning rights and obligations. While some advice may have related to legal rights, the dominant purpose of the communications was the presentation of evidence, which falls outside the scope of privilege.

The Court considered the nature of inquiries, noting that while witnesses concerned about legal liability are entitled to privilege, advice given solely to protect reputation or manage presentation does not attract privilege. The Court rejected the notion of extending legal advice privilege to a broader "quasi-litigation privilege" for non-statutory inquiries. It emphasized that the facts of this case, including the Bank’s role and concerns, did not justify extending privilege to all communications with solicitors in this context.

The Court also recognized the absence of authority on whether legal advice privilege should extend to advice given in non-litigious inquiry contexts and expressed that this area of law may benefit from further review. Ultimately, the Court upheld the judge’s order requiring a detailed examination of communications to determine if any were created for the purpose of obtaining specific legal advice.

Holding and Implications

The Court DISMISSED the appeal.

The ruling confirms that legal advice privilege is confined to communications between solicitor and client where the dominant purpose is obtaining advice concerning legal rights and obligations capable of becoming the subject of litigation or administrative proceedings. Advice primarily concerned with the presentation of evidence to a non-statutory inquiry, aimed at minimizing criticism rather than addressing legal rights, does not attract privilege. This decision limits the scope of legal advice privilege in the context of non-statutory inquiries and clarifies that expanded professional roles of solicitors do not automatically broaden the privilege. No new precedent was established beyond the reaffirmation of existing principles and the rejection of a broader "quasi-litigation privilege" in this context.