Legal professional privilege - Documents - Joint privilege

(on the application of Ford) v Financial Services Authority: Queen's Bench Division, Administrative Court (Mr Justice Burnett): 11 October 2011

The claimant and the first interested party (the executives) were directors of a company, Keydata. The second interested party was its compliance officer. Irwin Mitchell were retained in December 2007 by Keydata to advise in connection with an investigation by the defendant Financial Services Authority (FSA). The reason for the appointment of FSA investigators into the affairs of Keydata was that the FSA believed that Keydata might have contravened the FSA’s Principles for Businesses and Rules.

It was common ground that the legal advice provided by Irwin Mitchell was privileged in the hands of Keydata. The executives believed that Irwin Mitchell were also advising them as individuals and not simply as directors and officers of Keydata. In due course the FSA did open investigations into the executives personally. Keydata went into administration on the application of the FSA. Price Waterhouse Cooper (PwC) were appointed administrators.

Unknown to the executives, the FSA used its statutory powers to compel PwC to provide an electronic copy of the claimant's email records. The FSA was subsequently provided with the emails and attachments by PwC, who waived Keydata's privilege. The FSA relied upon the content of those emails and attachments in formal investigation reports and warning notices served on the executives pursuant to the statutory regulatory scheme.

PwC explicitly did not, indeed could not, waive any privilege in the documents attaching to the executives. The FSA did not investigate with the executives whether they had privilege in the documents before they were used to inform the investigation reports and warning notices. In those circumstances, the claimant and the first interested party contended that the FSA had acted unlawfully in using material that was in fact subject to legal professional privilege. The claimant applied for judicial review.

There were eight e-mails, together with their attachments, from Irwin Mitchell addressed to the executives at their Keydata e-mail addresses which were in dispute (see [2] of the judgment).

The main issue was whether the claimant and interested parties could assert joint interest legal privilege over eight emails and their attachments. The claimant submitted, inter alia, that he was entitled to claim privilege because he believed on reasonable grounds that in giving the advice, Irwin Mitchell were acting for both him and the company.

The court ruled: For legal advice privilege to be established the person claiming privilege had to have the relationship of client with the lawyer concerned, the communications claimed as privileged had to be confidential and the question of privilege had to be determined by reference to the circumstances which obtained at the time of the communication.

Assuming the relationship to be confidential, the question was whether the person concerned was the client of the lawyer at the time. If the relationship of lawyer and client was established, the legal advice given would be privileged and inviolate from disclosure in the absence of waiver, or attenuation by statute.

The same principles applied to joint legal privilege but because the interests of persons other than the individual claiming privilege were in play their position had to be taken into account. In searching for the true factual position at the time that the contentious communication was made, it was necessary to distinguish between advice being given to an individual as client from advice which was being given to another, but in which the first individual was interested because it impacted upon his personal position. It was the former that supported a claim for joint privilege, not the latter.

If joint privilege existed it affected the rights of all those who shared that joint privilege and also the professional obligations of the lawyers. For joint privilege to arise it was necessary for the facts to demonstrate that all those sharing the privilege and the lawyers concerned knew, or from the objective evidence ought to have known, that they enjoyed legal professional privilege with the others.

Apart from those cases in which there was no legal distinction between those claiming joint privilege an individual claiming joint privilege with others in a communication with a lawyer, when there was no joint retainer, would need to establish the following facts by evidence; (i) that he communicated with the lawyer for the purpose of seeking advice in an individual capacity; (ii) that he made clear to the lawyer that he was seeking legal advice in an individual capacity, rather than only as a representative of a corporate body; (iii) that those with whom the joint privilege was claimed knew or ought to have appreciated the legal position; (iv) that the lawyer knew or ought to have appreciated that he was communicating with the individual in that individual capacity; (v) that the communication with the lawyer was confidential (see [37]-[40] of the judgment).

In the instant case, on the evidence in relation to the email containing advice dated 7 February 2008 and the email dated 18 April 2008 it was clear that the executives had communicated in a clear manner with Irwin Mitchell that they were seeking legal advice in an individual capacity, rather than only as a representative of a corporate body. Irwin Mitchell knew or ought to have appreciated that fact. The claimant had established by evidence that he enjoyed joint legal advice privilege with Keydata in respect of those two communications.

As PwC’s waiver of privilege on behalf of the company did not impact upon the claimant’s privilege, it followed that the FSA could not rely upon the content of those communications in the regulatory proceedings against Keydata or the executives (see [63] of the judgment). The claimant’s application for judicial review in relation to an email dated 7 February 2008 and the email dated 18 April 2008 was granted (see [1] of the order).

Three Rivers District Council v Governor and Company of the Bank of England [2004] All ER (D) 176 (Nov) applied; Farrow Mortgage Services Pty Ltd v Webb [1996] 39 NSWLR 601 considered; Pioneer Concrete v Webb (1995) ACSR 418 considered.

Per curiam: 'Questions relating to joint interest privilege are likely to arise commonly in connection with relatively tightly controlled companies where the directors and the company are in reality one and the same. It is desirable that any potential dispute about privilege should be resolved before the material is considered by investigators and relied upon in the course of regulatory activity. For that reason the FSA might usefully review what is done by the Serious Fraud Office and Police to deal with potentially legally privileged material to determine whether similar practices might be adopted' (see [13] of the judgment).

Hodge Malek QC and Saima Hanif (instructed by Withers LLP) for the claimant; Bankim Thanki QC and Andrew George (instructed by the FSA) for the defendant; The interested parties appeared in person.