One step closer – English Court of Appeal aligns itself with other common law jurisdictions to find legal advice privilege subject to a “dominant purpose” test

Clients and legal practitioners often come across a fairly common question during the course of discovery/disclosure in litigation or arbitration: is the document privileged? Legal professional privilege is a fundamental and constitutionally guaranteed right in Hong Kong and, generally speaking, can be split into two branches: litigation privilege and legal advice privilege.  Legal advice privilege (LAP) offers broad protection to documents prepared by a client or its lawyers for the purpose of obtaining legal advice. In practice, however, clients and practitioners need to carefully consider what documents specifically, amongst all those prepared for seeking legal advice, would attract LAP. A related and important question is, who qualifies as the “client”.

The Hong Kong Court of Appeal (HKCA) in Citic Pacific Limited v Secretary for Justice and Commissioner of Police (unrep, 29/06/2015, CACV 7/2012) adopted the “dominant purpose” test for LAP, a broader one than had been previously applied. LAP now covers an internal confidential document of a client organisation which is produced or brought into existence with the dominant purpose that the document or its contents be used to obtain legal advice. In essence, this can include background documents or communications prepared by the client for use in instructions to the lawyers. The HKCA also took a liberal approach in interpreting the “client”. In a corporate context, the HKCA held that the client is the corporation itself and the question is to ascertain which employees are authorised to act for it to obtain legal advice. With that, Hong Kong courts moved away from the English Court of Appeal’s (English CA) narrow definition of “client” in Three Rivers No 5 [2003] QB 1556 (i.e. documents did not attract LAP unless the employee was tasked with seeking and receiving such advice on behalf of the company).  Similarly, other common law jurisdictions such as Australia and Singapore, too, chose to depart from English case law in this area.

The latest English CA decision on the scope and test of LAP aligns with Citic Pacific and has expressly taken Hong Kong authorities into consideration. We welcome this development. In The Civil Aviation Authority v The Queen on the application of Jet2.com Ltd [2020] EWCA Civ 35, the English CA found that LAP was subject to a “dominant purpose” test. The English CA held that in order to benefit from LAP, it is necessary to show that the dominant purpose of a communication was to give or obtain legal advice. The finding was based on two grounds. First, both litigation privilege and LAP are limbs of legal professional privilege and there is no compelling rationale for differentiating between limbs of the same privilege in this context. Second, in addition to Hong Kong, the English CA considered the position in other common law jurisdictions such as Singapore and Australia, and recognised that not only is the “dominant purpose” test able to work in practice but also that there is an advantage in the common law adopting similar principles.  As to the meaning of “client”, the English law position remains unchanged and is out of step with other common law jurisdictions. Any change to the law on that point will have to await a Supreme Court decision.  We hope to see in the future that the Supreme Court will steer the law on this point to align with Hong Kong and other common law jurisdictions.

For more details, please see our blog posts on the latest EWCA judgment here and the HKCA judgment reported in June and August 2015.

 

Gareth Thomas

Gareth Thomas
Partner, Head of Commercial Litigation, Hong Kong
+852 2101 4025

Dominic Geiser

Dominic Geiser
Partner, Hong Kong
+852 2101 4629

Jojo Fan

Jojo Fan
Senior Consultant, Hong Kong
+852 2101 4254

Priya Aswani

Priya Aswani
Professional Support Lawyer
+65 6868 8077

Launch of Asia Pacific Guide to Privilege 2019

Please click here to access a preview of the Guide.

We are pleased to launch the 2019 edition of our Asia Pacific Guide to Privilege.

Businesses are increasingly faced with multi-jurisdictional disputes where evidence rarely falls within the borders of a single country and complex legal privilege issues often surface when dealing with communications across multiple jurisdictions.

Compiled by our network of Herbert Smith Freehills lawyers and trusted local counsel, the updated Guide takes account of the latest developments across Asia Pacific and covers 21 jurisdictions.

Many enforcement actions either emanate from or involve long-arm jurisdictions outside Asia and span across many jurisdictions in Asia. Given for example the English Bribery Act’s broad jurisdiction and extra-territorial reach coupled with aggressive enforcement agencies, clients around Asia ought to understand how the authorities in England will apply the law of privilege, in addition to how the law is applied across Asia. Moreover, although English case law is persuasive in most common law jurisdictions, legal advice privilege is an area in which a number of common law jurisdictions, such as Australia, Hong Kong and Singapore, have chosen to depart from English case law. Given the spotlight on these issues, we have added a new chapter on England & Wales and a related comparative question in each of the other 20 chapters across Asia-Pacific.

We hope that this comprehensive Guide will be useful particularly to multinational companies who operate numerous subsidiaries across borders.

Please email asia.publications@hsf.com to request a hard copy of the Guide.

 

Peter Godwin

Peter Godwin
Regional Head of Practice - Dispute Resolution, Asia, Managing Partner - Kuala Lumpur
+60 3 2777 5104

Gareth Thomas

Gareth Thomas
Partner, Head of Commercial Litigation, Hong Kong
+852 2101 4025

Alastair Henderson

Alastair Henderson
Managing Partner - Southeast Asia
+65 6868 8058

May Tai

May Tai
Managing Partner - Greater China
+852 2101 4031

Dominic Geiser

Dominic Geiser
Partner, Hong Kong
+852 2101 4629

Peter Butler

Peter Butler
Partner, Sydney
+61 2 9225 5686

Helen Tang

Helen Tang
Partner, Shanghai
+86 21 2322 2160

Julian Copeman

Julian Copeman
Partner, London
+44 20 7466 2168

Narendra Adiyasa

Narendra Adiyasa
Partner, Jakarta
+62 21 3973 6108

David Gilmore

David Gilmore
Partner, Tokyo
+81 3 5412 5415

Mike McClure

Mike McClure
Partner, Seoul
+82 2 6321 5701

Chinnawat Thongpakdee

Chinnawat Thongpakdee
Partner, Bangkok
+66 2 857 3829

 

 

LEGAL ADVICE PRIVILEGE: WHY HK LAWYERS AND BUSINESSES NEED TO KNOW ABOUT THE NARROW POSITION UNDER ENGLISH LAW

Hong Kong law and English law have over recent years diverged on the meaning of “client” for the purposes of asserting legal advice privilege. Practitioners and businesses in Hong Kong need to be aware that communications involving an in-house lawyer and their “client” may not be privileged under English law as it currently stands, whereas they would be privileged under Hong Kong law. While the narrow English interpretation has not been adopted by the Hong Kong Courts, any Hong Kong based client who could potentially become involved in English litigation (whether through an English business/subsidiary or in relation to an English law governed contract) should be aware of the developments on legal advice privilege in the English Courts. Privilege is determined by the law of the forum of the litigation under both English and Hong Kong law.

The recent English High Court decision in Glaxo Wellcome UK Ltd v Sandoz Ltd [2018] EWHC 2747 (Ch) shows the potential holes in what businesses would usually consider to be privileged in-house communications. The English Court held that an in-house lawyer’s communications with an employee of the business, who was accepted to be her in-house “client” in these circumstances, were not protected by legal advice privilege where the purpose of those communications was to seek and obtain information to provide to external lawyers in order to obtain their legal advice. In doing so, the English Court applied the narrow interpretation of “client” established in the notorious Three Rivers No 5 decision, as recently confirmed by the English Court of Appeal in the ENRC case (see here).

This decision confirms that (under English law) an individual may be a lawyer’s “client” and therefore entitled to communicate information to the lawyer under the protection of privilege for one purpose but not for others. In equivalent circumstances in Hong Kong, the broader meaning of “client” would potentially make all such communications privileged. Continue reading

Wikileaked? Singapore Court upholds privilege over hacked documents

In the recent decision of Wee Shuo Woon v HT S.R.L [2017] SGCA 23, the Court of Appeal considered whether evidence which had been made available on WikiLeaks as a result of the Respondent's ("HT S.R.L."') computer systems being hacked had lost its confidential and legally privileged status. 

The decision, which has taken on added significance in the wake of recent global cyber-attacks, indicates that the Singapore courts will be slow to admit evidence obtained as a result of such incidents.  In particular, the Court held that the equity in favour of restraining the use of privileged documents was even stronger in the case of documents obtained in a cyber-attack than in the case of those obtained by virtue of a party's innocent mistake.  The order to exclude such evidence was upheld.

Continue reading

Herbert Smith Freehills Singapore hosts round table discussion on “preserving privilege: practical issues in the context of disputes and investigations”

On Wednesday 13 January 2016, a cross section of our clients based in Singapore joined our Disputes and Corporate Crime & Investigations teams and Bankim Thanki QC, a leading commercial advocate and litigator who has practised extensively in the region and the editor of The Law of Privilege (Oxford), for a roundtable discussion on the preservation of privilege.

In this e-bulletin, Alastair Henderson, Pamela Kiesselbach and Daniel Waldek summarise some of the key issues discussed in relation to privilege and its preservation, and practical suggestions coming out of those discussions.  The ebulletin looks at internal investigations, internal information gathering for the purpose of obtaining legal advice, and waiver of privilege as a result of disseminating legal advice internally or sharing it with third parties.

For more information, please contact the authors or your usual Herbert Smith Freehills contact.

Alastair Henderson

Alastair Henderson
Managing partner, Singapore, Head of international arbitration practice, Southeast Asia
+65 6868 8058

Pamela Kiesselbach

Pamela Kiesselbach
Senior Consultant
+65 6868 9826

Daniel Waldek

Daniel Waldek
Senior Associate
+65 6868 8068

 

 

Legal advice privilege only covers advice from lawyers, says the Hong Kong Court of Appeal

In the recent case of Super Worth International Ltd & Ors v Commissioner of the ICAC & another (CACV 168/2015), the Hong Kong Court of Appeal (the "Court") adopted the UK Supreme Court's reasoning in R (on the application of Prudential plc and another) v Special Commissioner of Income Tax and another [2013] UKSC 1, and held that legal advice privilege ("LAP"), a limb of legal professional privilege ("LPP"), does not extend to legal advice given by non-lawyers such as accountants.

Continue reading

Legal advice privilege – taking a closer look at the Hong Kong Court of Appeal judgment in adopting a wider test

The judgment recently delivered by the Hong Kong Court of Appeal (CA) in Citic Pacific Limited v Secretary for Justice and Commissioner of Police (unrep, 29/06/2015, CACV 7/2012) sets a new precedent in Hong Kong for legal advice privilege. In its decision, the CA expressly disagreed with the restrictive definition of a ‘client’ adopted by the English Court of Appeal in Three Rivers District Council v Bank of England (No 5) [2003] EWCA Civ 474 and decided to take a more liberal approach in interpreting who the ‘client’ is for the purpose of legal advice privilege. According to the CA’s judgment, the client is simply the corporation and the question is which employees should be regarded as being authorised to act for it in the process of obtaining legal advice. In addition, and importantly, the CA has adopted a broader test for legal advice privilege than had previously applied. As a result of the decision, legal advice privilege is no longer restricted to communications between a lawyer and a client, but now extends to cover an internal confidential document of a client organisation which is produced or brought into existence with the dominant purpose that the document or its contents be used to obtain legal advice.

Click here to access our recent ebulletin in which Gareth Thomas, Julian Copeman and Dominic Geiser take a closer look at the expanded test for legal advice privilege, the new definition of ‘client’ and its application, procedures to be adopted when privilege is in dispute including the CA’s recommendation of instructing an independent lawyer to deal with privilege materials and some salient take away points.

For more information or if you wish to discuss any matters, please contact the authors or your usual Herbert Smith Freehills contact.

Hong Kong Court of Appeal rejects the narrow interpretation of “client” and adopts a broader test for legal advice privilege

The Court of Appeal has handed down its much-awaited judgment in Citic Pacific Limited v Secretary for Justice and Commissioner of Police (unrep, 29/06/2015, CACV 7/2012), a copy of which was made available today and can be accessed here. In a joint judgment, three judges have rejected the Hong Kong Court of First Instance’s (CFI) narrow view of who from within a client organisation constitutes the “client” for the purposes of considering whether legal advice privilege applies. In the Court of Appeal’s judgment, the client is simply the corporation and the question is which employees should be regarded as being authorised to act for it in the process of obtaining legal advice. Continue reading

Hong Kong Court of Final Appeal upholds legal professional privilege as an absolute right

The Court of Final Appeal  has, again, reminded us in the recent high profile case of Secretary for Justice v Florence Tsang & others that legal professional privilege is an absolute right that is constitutionally enshrined. As noted in Akai Holdings Ltd v Ernst & Young (a Hong Kong firm), which was applied in this case, Article 35 of the Basic Law provides the constitutional basis for LPP in Hong Kong. This decision should provide welcome reassurance to clients obtaining or receiving confidential legal advice from their lawyers in Hong Kong. Click here to read more.