Today’s ruling by the Court of Appeal in Director of the Serious Fraud Office v Eurasian Natural Resources Corporation will be welcomed with open arms by both the legal sector and their clients. In a time when we are seeing a rise in challenges by regulators in respect of the claim to privilege over documents, the ruling provides much needed reassurance that advice between a client and their lawyer, and other material prepared in respect of potential litigation, even where that litigation has not formally commenced, need not be disclosed.
That said, we can expect that the SFO will give serious consideration to an appeal to the Supreme Court and as such, this may not be the end of the matter. Further the ruling, whilst upholding the fundamental principle that parties should be able to seek legal advice in confidence, has affirmed the narrow definition of client applied in the case Three Rivers District Council and others v Governor and Company of the Bank of England (No 5)  (which held that the “client” for the purposes of legal advice privilege was a three-man team set up to deal with certain legal issues; information obtained from employees outside of this was said to be no different than information obtained from third parties). It is reported that the Court of Appeal saw merit in the argument to depart from this, but felt bound by precedent.
Therefore whilst lawyers and clients alike can breathe a sigh of relief that their communications are protected, they should be mindful of the possibility of an appeal on the horizon and that for the present time at least, who is a “client” for legal advice privilege purposes remains very limited.
This response has been provided by BLM Partners James Varney and Natalie Puce.