Article by Sylvia Elwes FTII, Barrister, published in the May 2001 issue of Tax Adviser.
Legal professional privilege means that all communications between a client and his legal adviser for the purpose of claiming legal advice are protected from disclosure in the course of later legal proceedings. It exists whether litigation is pending or not.
The reason for the rule is that it is in the interests of justice and the administration of justice that communications between client and legal adviser should be confidential.
Stevenson J explained the rationale for the rule in Hobbs v Hobbs and Cousens  3 All ER 827 at p. 829:
‘[Privilege] exists for the purpose of ensuring that there shall be complete and unqualified confidence in the mind of a client when he goes to his solicitor or when he goes to his counsel that that which he there divulges will never be disclosed to anybody else. It is only if the client feels safe in making a clean breast of his troubles to his advisers that litigation and the business of the law can be carried on satisfactorily … There is … an abundance of authority in support of the proposition that once legal professional privilege attaches to a document … that privilege attaches for all time and in all circumstances.’
However, it could be argued that it is also in the public interest that all relevant material should be available to a court when it is deciding a case. There is, therefore, a conflict between two matters in the public interest. Certainly, this has been the view of the court on more than one occasion. See R v Barton  2 All ER 1192, R v Ataou  2 All ER 321.The attitude of the Court of Appeal in R v Ataou was that where a client has a recognisable interest in asserting the privilege, the court has to balance his interest with the public interest that relevant and admissible documents should be available to the defence in criminal proceedings. In a later House of Lords judgment in R v Derby Magistrates’ Court, ex parte B  4 All ER 526 this view was disapproved of, and the absolute nature of legal professional privilege was re-asserted. To allow any exception to the rule might mean that clients in the future would be deterred from telling the whole truth to their solicitors. The client in this instance had a legitimate interest in maintaining confidentiality as in the subsequent legal proceedings against his stepfather for murder, the client was likely to be accused of committing a crime of which he had been publicly acquitted. His interest was therefore protected even though, in the extreme circumstances of the case, disclosure of the material might have ensured that the accused stepfather was found not guilty of murder.
Lord Nicholls of Birkenhead in this case went on to consider, obiter, whether, in the case where the client no longer has an interest to protect, legal professional privilege could be regarded as spent. This principle has been upheld in R v Dunbar & Logan (1982) 138 DLR at p. 252 in which Martin JA said there was no rule of policy that required the continuing existence of privilege when the person claiming the privilege had no interest to protect any longer.
The difficulty here is that it is for the judiciary to determine at what time the privilege is spent rather than the client whose right it is to waive the privilege. However, his lordship expressed the view that the law should not protect the right of confidentiality of a client who no longer had an interest in asserting the right, where the right of confidentiality would seriously prejudice another.
The term ‘professional privilege’ is a misnomer as the privilege is that of the client rather that that of the professional legal adviser. A client may waive the privilege as in Minter v Priest  AC 558 at p. 579 but the legal adviser cannot as in Anderson v Bank of British Colombia (1876) 2 ChD 644.
One clear common law exception has been established to the rule. A communication between a solicitor and client is not privileged where the client has sought professional legal advice on committing a fraud or crime. This was established in R v Cox & Railton (1884) 14 QBD. This is because any assistance to wrongfully evade the law is not part of the duty of a legal adviser to his client.
Furthermore, it has been held in Parry-Jones v The Law Society  1 Ch 1968 that a solicitor cannot rely on professional privilege to prevent the Law Society from inspecting his accounts and other documents under the Solicitors’ Accounts Rules. Lord Diplock said that the privilege refers to the right to withhold from a court or tribunal exercising judicial functions material that would otherwise be admissible in evidence. However, an inspection of documents under the Solicitors’ Accounts Rules was not in the nature of judicial proceedings, though it might lead to subsequent judicial proceedings. It was similar to the inspection of a factory by a factory inspector under the Factories Acts.
The rule of professional legal privilege is more than a rule of evidence. It is a fundamental rule of law. This raises the question whether such a rule can be done away with by statute. Certainly, Lord Taylor of Gosworth said in R v Derby Magistrates’ Court, ex parte B (see above) that ‘nobody doubted that legal privilege could be modified or even abrogated by Parliament’. Parliament can always legislate contrary to fundamental rights because of the sovereignty of Parliament. Thus, for example, s. 93A and 93B of the Criminal Justice Act 1988 and s. 50–52 of the Drug Trafficking Act 1994 specifically provide that disclosure under the acts ‘shall not be treated as a breach of any restriction upon the disclosure of information imposed by Statute or otherwise’. Thus, the rule of professional legal privilege is removed by statute in certain narrowly defined cases. However, fundamental rights cannot be overridden by general or ambiguous words. Lord Hoffmann said in R v Secretary of State for the Home Department, ex parte Simms  3 WLR 328 at p. 341:
‘In the absence of express language or necessary implication to the contrary, the courts presume that even the most general words were intended to be subject to the basic rights of the individual. In this way, the courts of the United Kingdom, though acknowledging the sovereignty of Parliament, apply principles of constitutionality little different from those which exist in countries where the power of the legislature is limited by a constitutional document.’
In General Mediterranean Holdings SA v Patel  3 All ER 673 the question at issue was the extent to which Civil Procedure Rules could abrogate or limit a person’s right to legal confidentiality. They were issued under the Civil Procedure Act 1997 which provided that ‘Civil Procedure Rules may modify the rules of evidence as they apply to proceedings in any court within their scope’.
The High Court held that legal professional privilege was more than a rule of evidence. It was a fundamental condition on which the administration of justice depended. It could not be overridden by general or ambiguous statutory words. General words were subject to the basic rights of the individual. This was particularly so where the general words delegated a power to legislate. In this particular case, the language and structure of the 1997 Act did not suggest that Parliament intended to abolish or limit the right to confidence. So much then for express provision by statute excluding the privilege. The courts have also considered when there is a necessary implication that the privilege be excluded. Lord Nicholls said in B (a minor) v DPP  2 WLR 452:
‘Necessary implication connotes an implication that is compellingly clear. Such an implication can be found in the language used, the nature of the offence, the mischief sought to be prevented and any other circumstances which may assist in determining what intention is properly to be attributed to Parliament when creating the offence. Necessary implication may arise from not only the statutory provision under review but also from the rules governing that provision to be deduced from other provisions.’
In the case in point, it was argued that the fundamental principle that no crime has been committed without mens rea being present should not apply to a statutory crime under the Children Act 1960. This was because under the Sexual Offences Act 1956 certain offences were crimes, even though it was not necessary to prove mens rea. As the Children Act 1960 was part of that scheme of legislation, the inference was that an offence was committed under this act too even though there was no mens rea. This argument was rejected by the court as the legislative provisions did not reveal any sufficiently general rule. ‘If the Act of 1956 is to impress a particular meaning on the 1960 Act, it must be that its concrete terms provide a consistency of theme.’
Necessary implication has recently been considered by the courts in the context of a taxing statute in R (on the application of Morgan Grenfell & Co Ltd ) v Special Commr of Income Tax  STC 965. A merchant bank devised a scheme for clients to obtain low-cost funding, the terms of which minimised the tax burden. It discussed the scheme with the Revenue which expressed concern about aspects of it. The Inspector of Taxes wanted certain documents from the bank under Taxes Management Act 1970, s. 20 in order to investigate the scheme further. The documents included the bank’s instructions and the advice received from counsel on the scheme. He applied to the Special Commissioner for his consent to this course of action, as required by the statute, but the bank made written submissions that the documents were protected by legal professional privilege.
The Revenue, however, argued that there was a necessary implication that legal privilege was excluded from TMA 1970, s. 20. The relevant 1970 Act provisions were a single code. Certain provisions of that code specifically stated that legal professional privilege applied to them and by necessary implication where other provisions were silent about legal privilege, it did not apply. Thus, for example, TMA 1970, s. 20B(8) provides that, ‘A notice under Section 20(3) or 8A or Section 20A(1) does not oblige a barrister or advocate or a solicitor to deliver or make available without his client’s consent any document with respect for which a claim to professional privilege could be maintained’. If there was a general rule that material subject to professional privilege was protected, then this provision would not be necessary.
Moreover, TMA 1970, s. 20C and Sch. 1AA, para. 5 both specifically do not apply to items covered by legal professional privilege. Thus, taken as a whole and as a matter of construction, the Taxes Management Act 1970 showed that legal professional privilege is excluded except where it is expressly incorporated. It is a necessary implication from this that arguments based on legal professional privilege cannot be used to resist disclosure under s. 20(1). The Divisional Court accepted this argument and dismissed the bank’s application.
Finally in this case, the court considered the fundamental nature of the right of legal professional privilege and whether it was a fundamental right covered by art. 8(1) of the European Convention on Human Rights (now Human Rights Act 1998, Pt. 1, Sch. 1). This provides for the right to respect for private and family life, home and correspondence but with interference by a public authority with those rights permissible in set circumstances. The merchant bank cited Niemietz v Germany (1992) 16 EHRR 97 where the search of a lawyer’s office was found to be in breach of art. 8(1).
The Divisional Court found, however, that this case was not analogous to the case before them. Firstly, it was concerned with the privacy of a lawyer and not that of a client. Secondly, the confidential nature of the lawyer’s relations with his client was only one element in the private life of a practising lawyer.
There was no other authority cited to show that legal professional privilege was a human right. While in principle any material which is covered by professional legal privilege may be covered by the Human Rights legislation, it will not be covered when the interference by the public authority is for the permissible reasons and on the legal grounds of the case under consideration.
In summary, the court found that Parliament intended that the rule of non-disclosure of communications between legal adviser and client was not absolute and there were instances where in the public interest the rule could be abrogated. Taxes Management Act 1970, s. 20(1) was one of them. The significance of this case is that advice given by legal professional advisers to their clients is now open to inspection by the Revenue and that attention should be paid to the way in which such advice is drafted.
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May 2001 by