Last year the Court of Appeal’s judgment in what is colloquially referred to as “ENRC II” clarified the scope of litigation privilege. The case also highlighted what a fraught area the question of protecting sensitive company documents can be for businesses.


Given that Courts generally attribute a lot of evidential value to a contemporaneous document, and rather less so to witness statements (which are often drafted by the legal adviser on a witness's behalf) obtaining a “killer” document can give one side a significant advantage in legal proceedings. As a result, companies and their legal advisers should always think carefully about what documents their opponent may have generated (for example documents created over the life of a commercial contract which has brought about the dispute) and then probe as aggressively as they can within the confines of the Civil Procedure Rules.

Organisations can be forgiven for thinking that communications with their legal advisers are always protected by legal advice privilege; similarly with any communication/document created when something has gone wrong internally.
To complicate matters further, too many employees are often unnecessarily drawn into sensitive investigations involving external lawyers (the weakness of the “cc” email facility perhaps) but in doing so they unwittingly fall outside the protection of legal advice privilege.

What is Legal Privilege?

Legal privilege covers two main areas. Firstly, there is “legal advice privilege”. As its title denotes, it usually covers all communications between a company and its legal advisers. Note that litigation doesn’t have to be contemplated.

Secondly there is “litigation privilege”. Litigation privilege also involves all communications between a company and its legal advisers if litigation has commenced or is contemplated, and provided its dominant purpose is for obtaining advice in connection with the litigation, or assisting with the litigation.

With regards to companies it's essential to make sure the legal adviser is only communicating with directors, or employees who have been properly authorised by the business to provide both confidential information and receive legal advice. If legal advice is disseminated beyond those who haven't been properly authorised then legal privilege over the communication in question will be lost.

As indicated above, in an age of email communications it's surprising how quickly a list of internal cc’d recipients can grow as a sensitive problem unfolds. More often than not individuals are included who add no value whatsoever to the advice being sought.

External Advisers as Investigators

A similar problem arises when companies ask their external legal advisers investigate a situation where there might be statutory and/or regulatory implications.

It's perfectly proper (and good governance) for an investigation to be seen to have some degree of independence by using external advisers to investigate and make findings. However, it's sometimes assumed that if an external lawyer interviews both existing and former employees then any interview notes will remain privileged.
Unfortunately, despite a number of court cases where this has been tested, the law still doesn't accept that, prima facie, interview notes can be covered by legal privilege. This is on the pretext that the interviewees are merely agents (or third parties) and are not the “client”.

Fortunately, the ENRC II judgment is helpful as it acknowledges that, in circumstances where interview notes were prepared in the contemplation of litigation, then litigation privilege could “bite” thereby maintaining confidentiality which might otherwise have been lost under legal privilege. Whether or not litigation is contemplated is extremely fact sensitive.


Particularly in the field of employment law there are huge numbers of HR consultants providing advice HR advice to businesses – most often to SME type businesses when there is no dedicated HR function. Arguably, a lot of that advice is quasi-legal. Whatever the nature of any advice is, however, it's likely to be extremely sensitive for the organisation.

Unless an HR consultant is a qualified solicitor or barrister any advice is not privileged. It means that switched-on claimant solicitors are more likely to aggressively pursue targeted disclosure requests from a defendant company, in circumstances where it's known the organisation uses an HR consultancy for its advice.


A 2013 Supreme Court case in R (Prudential PLC) v Special Commissioner of Income Tax had to address an appeal whereby Prudential argued that legal advice privilege should be extended to advice on tax law provided by the accountancy profession.

The Supreme Court held that it was not open to the courts to extend legal advice privilege further than its current limits.

A lot of commentators acknowledged (including the two dissenting Judges) that it makes practical sense for extending legal privilege to tax law advice given by accountants. Despite this, Lord Neuberger suggested it was up to Parliament to legislate for any changes.

Accountants are often used to help both before litigation, and/or forensically once proceedings have been issued. It's not unusual to see a company's own accountants providing some preliminary advice, despite the fact that once proceedings are issued the parties may still be required to instruct independent expert accountants.

Mindful of the limits with legal advice privilege, organisations should ensure that its legal advisers "manage" instructions and communications with accountants when that advice is integral to the legal advice also being sought. In short, any instructions should come direct from the legal adviser and not the company. The same principle applies to other professionals (e.g. chartered surveying firms).


An obvious point perhaps, but as soon as a problem starts to develop (e.g. commercial, employment, regulatory), then consider who internally is going to be authorised to manage both the provision of information, and the receiving of any legal advice. So apart from the directors who else is crucial to any decision-making process?

Don’t be tempted to communicate directly with any third-party professional advisers – instead channel it through the company's legal advisers.
CONTACT: Christopher Filor
EMAIL: cfilor@filorsolicitors.co.uk   TELEPHONE: 01647 231475
MOBILE: 07891 055856   www.filorsolicitors.co.uk
This publication is not intended to provide legal or other professional advice and should not be relied upon as such. Readers should take legal advice before applying the information contained in this briefing.
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