Three Rivers No. 5

A marked man, since the Court of Appeals happy decision in SFO v ENRC, Three Rivers District Council v Bank of England (No. 5) [2003] EWHC 2565 is a controversial decision of the UK Court of Appeal about legal privilege.

It has been criticised as creating a risk of restricting the "client" to some limited group of employees, so that communications or documents prepared by anyone else in the organisation would not be privileged, unless prepared for the purposes of contemplated litigation. That is because, unlike litigation privilege, legal advice privilege does not apply to communications with third parties; it only covers lawyer-client communications.

Although followed in RBS Rights Issue Litigationand at first instance in Serious Fraud Office v Eurasian Natural Resources Corporation, Three Rivers No. 5 is basically a dead man walking since the Court of Appeal overturned the High Court decision's decision in SFO v ENRC and more or less invited ENRC to appeal to the Supreme Court so they could overrule Three Rivers No. 1 for good measure.

The inhouse cousel of the English common law world will not be sad to see it go.

See also

Judgment

Facts

The Bank of England claimed legal professional privilege for documents created between BCCI’s collapse and the Bank’s final submissions to the Bingham Inquiry, claiming simple “legal advice privilege” — privilege relating to legal advice not provided in contemplation of litigation.

The issue boiled down to whether communications between employees in order to legal advice from a solicitor (but not specifically in contemplation of litigation) would be covered by the general legal advice privilege. Per general case law, the starting proposition was no: information given by one employee to another stands in the same condition as ’matters known to the client and does not, of itself, attract general solicitor/client privilege.

The proposition argued for the claimants was that a corporate defendant was different as it only could act through its employees. A good argument, but one that did not wash with the Court of Appeal then (though, per the judgment in SFO v ENRC apparently does now).

The lower court had held: “... an internal confidential document, not being a communication with a third party, which was produced or brought into existence with the dominant purpose that it or its contents be used to obtain legal advice is privileged from production...”

The Court of Appeal went through the whole history of legal professional privilege. Highlights:

• Para. 14: per Anderson v Bank of British Columbia (1876) 2 Ch.D. 644 per Melish J:
  • To be privileged a communication must come within one of two classes of privilege:
    • one is not bound to disclose his confidential communications with his solicitor, directly, or through an agent who is to communicate them to the solicitor;
    • one is not bound to communicate evidence which one has obtained for the purpose of litigation
  • information given by one employee to another, or information given by an agent to a principal, stands in the same condition as matters known to the client and does not, of itself, attract general solicitor client privilege, even though it is intended that it be shown to a solicitor unless it was intended to be shown to a solicitor in the context of existing or contemplated litigation.