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A High Court decision yesterday potentially expands the basis on which legal advice privilege will be applied by the English courts. It finds that legal advice privilege applies to "intra-client" communications – ie internal communications between members of the client group and/or documents created by members of that group – so long as they are prepared for the dominant purpose of seeking legal advice: Aabar SARL v Glencore Plc [2026] EWHC 877 (Comm).
In the Court of Appeal's landmark decision in 2003 in Three Rivers No 5 (outlined here), and various decisions following it, legal advice privilege has been described as applying to communications between lawyer and client (and drafts of such communications) – with "client" interpreted narrowly to include only those within the client organisation who are responsible for seeking or obtaining legal advice on its behalf (and not those who simply have information that the lawyers need in order to advise). Other communications or documents, including those between individuals who form part of the "client", have been thought to fall outside the scope of legal advice privilege – save to the extent that they evidence the content of the legal advice or the issues on which the lawyer is advising.
In the present decision, Mr Justice Picken departs from that view, finding that "intra-client" communications are covered by the privilege. The decisiondoes not, however, affect the narrow definition of the "client", which has been confirmed at Court of Appeal level (in SFO v ENRC, outlined here) and therefore can only be overturned by the Supreme Court.
The decision represents a helpful, though limited, expansion of the scope of legal advice privilege beyond how it was previously understood. However, as a first instance decision it will not be binding on other courts, and it arguably runs counter to various statements in appellate authorities which describe legal advice privilege as being limited to lawyer/client communications – though Picken J considered that those statements were not intended as exhaustive statements of the scope of legal advice privilege.
Pending any consideration of the point by a higher court, it would be prudent for clients to take a cautious approach to creating documents in circumstances where they may later wish to assert privilege. In particular, where there is no litigation in prospect, those within the "client" group should continue to assume that only their communications with a lawyer, and not "intra-client" communications, will be protected by privilege.
It is worth noting that, in a previous decision in the same case, Picken J held that the so-called "shareholder rule" – ie that a company could not generally assert privilege against its shareholders – did not exist in English law, despite it having been applied or at least recognised in various higher court authorities. The Privy Council later reached the same conclusion, though it commented that Picken J's decision had probably come as a "considerable surprise" in light of those authorities.
The decision is also of interest for Picken J's strong view that a lawyer's working papers are privileged – which he described as "obviously the case" and "not in dispute". There has been some uncertainty as to the application of this principle following the High Court decision in the RBS Rights Issue Litigation (considered here) which suggested that working papers are privileged only to the extent that their disclosure would betray the trend of the legal advice – though that aspect of RBS has generally been narrowly interpreted as applying only to lawyers' notes of non-privileged interviews or discussions rather than working papers more generally. The present decision helpfully lends support to a broader application of the working papers principle.
Background
The decision arose in the context of a securities class action against Glencore Plc and certain of its former directors.
When giving its final tranche of disclosure, Glencore informed the claimants that it had been approaching its disclosure obligations in previous tranches on the basis that Three Rivers No 5 was wrongly decided, and accordingly that legal advice privilege should apply to all communications made for the dominant purpose of seeking or receiving legal advice.
Following the claimants' objections, Glencore said it would no longer maintain its contention that every employee should be treated as the "client” for the purposes of legal advice privilege – ie it would accept the narrow "client" definition referred to above. However, it maintained that it was entitled to assert privilege over communications which were not between lawyer and client but were between members of the “client" group, in that narrow sense.
The claimants sought an order that Glencore disclose such documents, other than those which evidenced the substance of privileged communications. They argued that it was a "basic tenet" of legal advice privilege that it applies to communications between lawyer and client, highlighting (among other judicial statements) Longmore LJ's conclusion in Three Rivers No 5 [2003] EWCA Civ 474 that the authorities established that legal advice privilege:
“could not be claimed for documents other than those passing between the client and his legal advisers and evidence of the contents of such communications”.
Decision
The High Court (Picken J) declined to make the order sought. He concluded that the true position, on the authorities, is that legal advice privilege applies to any intra-client document which is sent between or created by members of the client group for the dominant purpose of seeking legal advice.
Picken J explained that, in Three Rivers No 5, the Court of Appeal held that a committee of three officials within the Bank of England known as the "BIU" was the client for the purposes of legal advice privilege, rather than all Bank employees. It followed that documents prepared by other employees were not privileged, even if they were prepared for the purpose of obtaining legal advice.
In the present case, Picken J accepted Glencore's submission that Three Rivers No 5 should therefore be treated as concerned only with "non-client" documents – ie documents created by individuals who did not form part of the client group. It was not concerned with the issue considered in this case, relating to intra-client documents. Longmore LJ's comment quoted above had to be seen in that light. As Picken J put it:
"In my view, Longmore LJ was not meaning to set out an exhaustive statement as to the scope of legal advice privilege, specifically that it is only available in relation to lawyer/client communications. That cannot have been what Longmore LJ intended to be taken as saying, given that he himself recognised two major exceptions to the principle as stated, namely lawyers’ working papers and documents created with the intention of being sent to a lawyer even if not sent. Rather than setting out an exhaustive statement as to the applicability of legal advice privilege, what Longmore LJ was doing was stating what is not within the ambit of this form of privilege in response to the Bank’s submission that third party communications are included."
Picken J acknowledged that the disclosure order subsequently made in Three Rivers (which was upheld by the Court of Appeal) included some "intra-client" documents in the sense that they were internal to the BIU. He noted, however, that there was no argument either before the judge or the Court of Appeal addressing that category. Accordingly, he concluded that it would be wrong to take Three Rivers No 5 as authority in respect of intra-client documents.
Picken J considered a number of subsequent authorities relied on by the claimants as limiting legal advice privilege to lawyer/client communications, including Natwest v Rabobank [2006] EWHC 2332 (Comm) (considered here), SFO v ENRC [2018] EWCA Civ 2006 and the RBS Rights Issue Litigation [2016] EWHC 3161 (Ch) (both referred to above). In each case, Picken J considered that the decision did not concern, and had no bearing on, intra-client documents. Accordingly, he concluded that there is no authority which prevents the assertion of a claim to legal advice privilege over intra-client documents.
Approaching the issue as a matter of principle, therefore, Picken J commented that it would make no sense to deny legal advice privilege for intra-client documents whose dominant purpose is to identify an issue on which the client proposes to seek legal advice or the facts the client proposes to communicate to the lawyer for that purpose. As Picken J explained:
"An example might be a client, the day before he or she is due to meet his lawyer for the first time, writing himself or herself a memorandum with notes for the meeting. Another example might be one member of the client group, who will not be attending the meeting with the lawyer, emailing another member of the client group with information or thoughts in preparation for the meeting."
In both cases, Picken J held, the document should be privileged regardless of whether it was itself sent, or intended to be sent, to the lawyer.
Picken J added that if, as he said was "obviously the case" and was "not in dispute", a lawyer's working papers are the subject of legal advice privilege, it is difficult to see why what are in effect a client's working papers should not equally be privileged.
Finally, Picken J noted that support for his conclusion could be found in the Court of Appeal's decision in Jet2.com [2020] EWCA Civ 35 (considered here).
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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