In PJSC Tatneft v Bogolyubov 1 the English High Court has recently confirmed that legal advice privilege extends to communications with foreign lawyers, including foreign in-house lawyers, provided they are acting in the capacity or function of a lawyer.
The High Court also confirmed that there is no requirement to establish that the foreign lawyer is "appropriately qualified" or recognised or regulated as a "professional lawyer" in order for legal advice privilege to apply.
The Claimant in the underlying dispute ("Tatneft") is an oil company incorporated in Tartarstan, one of the constituent members of the Russian Federation. The Defendants are four Ukrainian businessman. The underlying dispute concerns the Defendants' alleged involvement in an oil payment siphoning scheme2.
The High Court's most recent judgment in this action concerns an interim application issued by the Second Defendant concerning disclosure given by Tatneft in the underlying action. The issue before the Court was whether legal advice privilege had been properly asserted by Tatneft in relation to communications with members of its in-house legal department and documents prepared by that department.
As described in the evidence served in support of the application, under the Russian legal system "in-house" lawyers are not members of the Russian Bar and their activity does not fall under regulation provided under Russian Federal Law governing "advocates". An "advocate" is an independent legal advisor who has been admitted to the Russian Bar and recorded in a register of "advocates" which is maintained by the Russian Ministry of Justice of the Russian Federation.
The application was made on the basis that although communications with "advocates" are subject to the Russian legal concept of "advocates' secrecy" (which was said to be the equivalent to legal professional privilege in English law), the same concept does not apply to non-advocate in-house lawyers.
The parties' submissions
Both parties accepted that in proceedings before the English High Court, it was a question of English law (as the lexi fori) whether a document can be withheld on the basis of privilege.
Tatneft accepted that the relevant in-house lawyers were not "advocates" under Russian law, but submitted that as a matter of English law, legal advice privilege nevertheless applied. This was on the basis that the established position under English law is that legal advice privilege applies to advice obtained from foreign lawyers, and it submitted that this included foreign in-house lawyers. Tatneft submitted that, for the purpose of determining whether privilege applies under English law, the Russian law concept of "advocates' secrecy" was irrelevant and that the English court does not enquire into the standards of regulation or training applying to foreign lawyers.
The Second Defendant submitted that privilege could only apply to foreign in-house lawyers who were "appropriately qualified", by which it meant those who were regulated and admitted to practice – in order for legal advice privilege to exist, the court must be concerned with the status of the lawyer and not just his/her function.
Mrs Justice Moulder found that the communications with Tatneft's foreign in-house lawyers were privileged. In reaching her decision, Moulder J. considered the prior judicial authorities where the issue of legal advice privilege extending to foreign lawyers had been considered.
The judge took as her starting point the public interest in favour of clients being able to obtain legal advice and for those communications to be kept confidential. She held that it was consistent with the rationale for legal advice privilege that it has been held to extend to foreign lawyers.
The judge considered in particular the Supreme Court's decision in R (on the application of Prudential plc and another) v Special Commissioner of Income Tax3. In the context of considering whether legal advice privilege might extend to other professionals, the Supreme Court had noted that it had been extended to foreign lawyers without regard to their particular national standards, regulations or local rules on privilege; Lord Neuberger had concluded that this was based on "fairness, comity and convenience".
Moulder J. also adopted the approach in Re Duncan4 that it is the function of the relationship and not the status of the lawyer which is relevant in the case of foreign legal advisors, which she considered to be consistent with the rationale of protecting a party who wishes to take legal advice. Although the Supreme Court in Prudential had declined to extend legal advice privilege to communications with non-lawyer professionals, the judgment given in that case endorsed the broader approach which has been taken to foreign lawyers.
Although earlier cases had not specifically addressed the status of foreign in-house lawyers, Moulder J. held that:
- Once it is accepted that the court will not investigate whether a foreign lawyer is registered or regulated, it follows "as a matter of both logic and principle" that communications with foreign in-house lawyers (acting in that capacity) should likewise be privileged, it being well-established in English law that in-house lawyers are in the same position as those in private practice.
- If legal advice privilege did not extend to in-house lawyers in Russia on the basis that they were not regulated or qualified, this would have the unfair consequence that, as they cannot be "advocates" in Russia, legal advice privilege could never extend to communications with in-house legal advisers in Russia – even though legal advice privilege extends to in-house lawyers generally as a matter of English law.
Moulder J. concluded that provided that the lawyer is acting in the capacity or function as a lawyer (and the communications are of a type that can attract privilege), it was not necessary also to establish that the foreign lawyer is "appropriately qualified" or recognised or regulated as a "professional lawyer" in order for legal advice privilege to apply.
This judgment provides helpful clarification that the English law concept of legal advice privilege extends not only to foreign lawyers but also to foreign in-house lawyers, without needing to assess the type of qualification they possess in their jurisdiction or whether they are part of a regulated body.5 In short, the key determining factor is whether they are performing the function of a lawyer, rather than their technical status under local law.
This judgment is likely to be welcomed by those multinational companies which (for example) base their in-house legal team in one country but who advise UK-based business units. As privilege before the English courts is a matter of domestic law, this decision will not be affected by the end of the transition period following the UK's departure from the European Union.
However, it is important to bear in mind that other issues might arise regarding whether privilege can be asserted over communications with an in-house lawyer, including those qualified in this jurisdiction as well as foreign in-house lawyers. For example:
- Legal advice privilege will only apply to communications where the in-house lawyer is acting in that capacity (i.e., as a lawyer), rather than (for example) exercising an executive or other function, and where the dominant purpose is the giving or receiving of legal advice.
- The recent Court of Appeal decision in Civil Aviation Authority v Jet2.Com Ltd 6 addressed the difficulties that can arise with emails with multiple addressees and, in particular, the fact that such communications should be considered as separate bilateral communications between the sender and each recipient, when seeking to determine whether privilege applies.