Legal and professional privilege
Information on the principles of legal and professional privilege.
The principles are set out in Three Rivers District Council v Governor and Company of the Bank of England (No 6) [2004] UKHL 48, [50].
Legal advice privilege attaches to all communications made in confidence between solicitors and their clients for the purposes of giving or obtaining legal advice, even at a stage when litigation is not in contemplation.
Lawyer
A lawyer is a legally qualified person acting in a professional capacity. Where advice is provided by a lawyer who is qualified in another jurisdiction, communications will attract legal advice or litigation privilege provided the adviser is acting in the capacity of a lawyer. What matters is the existence of a genuine professional lawyer client relationship and the lawyer acting in a legal professional capacity (RBS Rights Issue Litigation [2016] EWHC 3161 (Ch)).
Legal advice privilege does not extend to communications in connection with advice given by professional people other than lawyers, even where that advice is legal advice which that professional person is qualified to give (on the application of Prudential plc and Prudential (Gibraltar) Ltd) v Special Commissioner of Income Tax and another [2013] UKSC 1), [51]. However, such advice may attract litigation privilege.
Communication
Legal advice privilege is concerned with protecting the confidence in communications made between client and lawyer. A communication is any means by which instructions are communicated by the client to the lawyer or advice is given from the lawyer to the client. The communication can be written, oral or recorded and can include a letter, fax, email, formal instructions to counsel, a face to face discussion, telephone conversation, text message, internet based messaging service, or other electronic mode of communication.
Legal advice privilege will also extend to the working papers that were created in the process of creating the privileged communication.
Client
The client is the person seeking legal advice from the lawyer. Where the client is a corporate entity the leading authority Three Rivers District Council v Governor and Company of the Bank of England (No 5) [2003] EWCA Civ 474 restricts the definition of ‘client’ to a narrow group of individuals authorised to seek and receive legal advice on behalf of the entity. Communications between the lawyer and other employees, even if senior, will not be covered by legal advice privilege, as those employees are not regarded as the ‘client’, unless these communications are client working papers created as part of the process of seeking legal advice (Aabar Holdings SARL v Glencore Plc [2026] EWHC 877, [60] [61]).
Dominant purpose
To attract legal advice privilege, the dominant purpose of the communication must be connected to the obtaining or giving of legal advice to the client by the lawyer. The test of privilege must be applied document by document based on the dominant purpose for which the communication was created (Jet2.com Ltd v Civil Aviation Authority [2019] EWHC 336).
Legal advice privilege does not apply to documents communicated by a third party to a client or his solicitor for advice to be taken upon them, such as a surveyor’s report to a solicitor administering an estate (Brett L.J. in Wheeler v Le Marchant (1881) 17 Ch. D. 675).
Copying a lawyer into a communication does not render a communication privileged. To attract legal advice privilege the communication would need to be for the dominant purpose of seeking or giving legal advice (Jet2.com Ltd v Civil Aviation Authority [2019] EWHC 336).
Similarly, communications providing billing information or a lawyer’s terms of business may not be subject to legal advice privilege as the dominant purpose is not to give or obtain legal advice (R v Manchester Crown Court [1992] Cr.App. R 267).
Giving or obtaining of legal advice
Legal advice is not confined to telling the client the law; it must include advice as to what should prudently and sensibly be done in the relevant legal context (Balabel v India [1988] 1 CH 317 at page 330 G).
However, a communication that is for the dominant purpose of seeking purely commercial advice lacking a legal context will not attract legal advice privilege.
Litigation privilege attaches to communications between parties or their solicitors and third parties for the purpose of obtaining information or advice in connection with existing or contemplated litigation. But only when the following conditions are satisfied:
- litigation must be in progress or in contemplation
- the communications must have been made for the sole or dominant purpose of conducting that litigation
- the litigation must be adversarial, not investigative or inquisitorial
Three Rivers District Council and Others v Governor and Company of the Bank of England (No 6) [2004] UKHL 48, [101].
Lawyer
As with legal advice privilege, a lawyer is a legally qualified person acting in a professional capacity.
Communication
Litigation privilege can extend to cover communications between lawyers on behalf of the same client, and between the client or lawyer and third parties. It can also cover certain confidential documents which strictly are not communications but are created to enable legal advice to be sought or given, or information or evidence to be prepared or gathered for the litigation. Such documents may include lawyers’ research notes, draft witness statements, draft expert reports, advice of non-lawyers such as accountants and tax professionals, and litigation strategy papers (Aabar Holdings SARL v Glencore Plc [2006] EWHC 877).
Client and third party
Litigation privilege extends to communications with third parties and all legal and natural persons come within the scope of that definition; it encompasses any legal or natural person who is not the client. It would include employees of the client, communication with whom fell outside the scope of legal advice privilege in application of the Three Rivers (No 5) principle because they were not authorised to seek or receive legal advice on behalf of the client (Al Sadeq v Dechert LPP [2024] EWCA Civ 28, [223]).
Dominant purpose of contemplated litigation
For litigation privilege to apply the communication must be made with the dominant purpose of being used in or in connection with litigation that is either ongoing or reasonably contemplated.
The fact that the person had in mind other uses of the document will not preclude that document being accorded privilege, if it were produced with the requisite dominant purpose (Waugh v British Railway Board Respondents [1980] A.C. 521, 544C).
The litigation in question must be adversarial, meaning that it involves opposing parties asserting conflicting claims or defences rather than an investigative or inquisitorial process. A tax enquiry is not adversarial and requires cooperation with HMRC and therefore does not fall within the definition of litigation, however, any preparation to contest the expected assessment will be covered by litigation privilege (Bilta (UK) Ltd (in liquidation) v Royal Bank of Scotland [2017] EWHC 3535 (Ch), [65]).
Where litigation has not been commenced at the time of the communication, there must be a real prospect of litigation as distinct from a mere possibility, but it does not have to be more likely than not. There does not have to be a greater than 50% chance of litigation (United States of America v Philip Morris Inc. (British American Tobacco (Investments) Ltd intervening) [2004] EWCA Civ 330; [2004] 1 C.L.C. 811, [25]).
Advice provided by tax advisers or accountants may attract litigation privilege if litigation was in contemplation when the advice was sought, such as where the advice is feeding into an expert witness statement or where the tax adviser is also representing, or is intending to represent in the future, the taxpayer before the first-tier tribunal.
However, as set out in Financial Reporting Council Ltd v Frasers Group PLC (formerly Sports Direct International PLC) [2020] EWHC 2607, [36] — a taxpayer who takes advice as to how to structure his affairs does not do so for litigation purposes. He does so because he wants to achieve a particular result for tax purposes. Even if it is contemplated that the particular structure will be likely to be attacked by the relevant tax authorities and that there will be litigation, the advice as to how to implement the new structure or, if this is preferred, how to revise or enhance an existing structure is not primarily advice as to the conduct of the future possible litigation.
Privilege belongs to the client, and not their legal representative. The client can voluntarily waive their right to privilege and provide this information to HMRC. A lawyer can only waive their client’s right to privilege with that client’s consent (R v Derby Magistrate’s Court, Ex P. B [1996] A.C. 487).
Waiver and loss of privilege can also occur through inadvertent disclosure. Inadvertent disclosure can take different forms, the disclosure could for instance:
- summarise legal advice actually provided
- refer indirectly to the substance of legal advice provided by others
- refer to the mere fact of legal advice having been received, possibly with details of the identity of the author of the advice or the topic covered and the circumstances in which it was provided
(Belhaj v DPP [2018] EWHC 514 (Admin), [6]).
Where privileged documents have been disclosed in obvious error, the recipient should act honestly and engage with the disclosing party to return the documents unread. This would not amount to a waiver of privilege (Atlantisrealm Ltd v Intelligent Land Investments (Renewable Energy) Ltd [2017] EWCA Civ 1029).
In PCP Capital Partners LLP and another v Barclays Bank Plc [2020] EWHC 1393 (Comm), it was held that a purely narrative reference to the giving of legal advice does not constitute waiver. This is because, on any view, there is no reliance upon it in relation to an issue in the case. Waksman J went on to explain the application of the content or effect distinction, as a means of determining whether there has been a waiver or not, cannot be applied mechanistically. Its application has to be viewed and made through the prism of:
- whether there is any reliance on the privileged material adverted to
- what the purpose of that reliance is
- the particular context of the case in question
This is an acutely fact sensitive exercise. This means that in a particular case, the fact that only the conclusion of the legal advice referred to is stated as opposed to the detail of the contents may not prevent there being a waiver.
The concept of fairness underpins the rationale for having a concept of waiver which can then entail the production of further privileged documents. This is because if the party waiving is, by the waiver thereby creating a partial picture only of the relevant legal advice, it is unfair to the other party to allow him to ‘cherry pick’ in this way. It is also clear that the question of whether or not there has been a waiver is not to be decided simply by an appeal to broad considerations of fairness.
Gotha City v Sotheby’s and Another [1998] 1 W.L.R 114 [118-119] legal advice can be shared with others for a limited purpose and remain subject to legal advice privilege. If the document is read out on the television news or in open court then confidentiality is lost once and for all. No further question of privilege arises. It is important to understand that it is possible for a document to cease to be confidential as between some parties and not others.
If a person shows a privileged document to six friends, they will not be able to assert privilege if one of those friends sues them because the document is not confidential between the person and the friend. The fact six other people have seen it does not prevent them claiming privilege against the rest of the world.
If a lawyer is engaged by more than one client with similar interests for example, a company and its directors there may be joint legal privilege. For joint privilege to arise, it is 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 (R (Ford) v The Financial Services Authority and Others [2011] EWHC 2583, [40]).
Legal professional privilege does not exist in a document which comes into existence in relation to a fraud, crime or other iniquity. The iniquity or crime fraud exception (CFE) applies in both civil and criminal proceedings, and to both forms of legal professional privilege.
It is not necessary for the lawyer to have been complicit or aware of the iniquitous conduct for the exception to apply (Hotel Portfolio II Ltd v SMA Investments Holdings Ltd [2019] EWHC 1754 Comm).
The exception is not confined to fraudulent or criminal purposes, but extends to fraud or other equivalent underhand conduct which is in breach of a duty of good faith or contrary to public policy or the interests of justice (Al Sadeq v Dechert LLP [2024] EWCA Civ 28, [55]).
It is for HMRC to prove on the balance of probabilities that the iniquity exception applies. This means HMRC must show that it is more likely than not on the material available to the decision maker, whether that be the party or a party’s legal adviser when determining whether to give or withhold disclosure, or the court on any application in which the issue arises (Reid v HMRC [2025] EWCR 4, [29]).
The iniquity must be supported by admissible evidence, and not a mere allegation. There must also be a prima facie case that the document came into existence as part of the fraud (Hotel Portfolio II Ltd v SMA Investments Holdings Ltd [2019] EWHC 1754 (Comm)).
Documents which were brought into existence as part of or in furtherance of the iniquity includes documents brought into existence in preparation for the iniquity and documents revealing the iniquity which come into existence after it is complete. It is not enough that the document would not exist but for the iniquity. There must be a direct link between the creation of the document and the iniquity (see Reid v HMRC [2025] EWCR 4, [29]).
Legal advice given to a criminal following the commission of a crime about what the criminal should do in respect of the investigation of the crime and the defence of any criminal proceedings attracts legal advice privilege. Criminals are entitled to seek legal advice about their rights under the criminal law and laws of criminal evidence and procedure, and to seek that advice safe in the knowledge that what they say to their lawyer and the advice that they are given will remain confidential (R v Derby Magistrate’s Court, Ex P. B [1996] A.C. 487).
Where there is a dispute as to whether a document attracts legal professional privilege (LPP), HMRC will proceed in the spirit of the HMRC Charter and try to work with the person asserting privilege to resolve that dispute and get things right. One practical way in which to resolve this dispute would be for independent counsel to be instructed to advise as to whether in counsel’s opinion the document attracts privilege.
HMRC may issue a schedule 36 information notice, paving the way for the process in the information notice: resolution of disputes as to privileged communications regulations 2009 to be used so that the first tier tribunal can resolve the dispute.