18 May 2021 | By Marten Männis
Legal Privilege
Foreign in-house lawyers enjoy legal advice privilege under English law
In September 2020 the High Court of Justice Business and Property Courts of England and Wales Commercial Court (QBD) clarified the applicability of legal professional privilege for communication with foreign in-house counsel. The core issue in Bogolyubov & Ors [2020] EWHC 2437 concerned that the Russian legal system draws a legal distinction between officially registered advocates and in-house lawyers, similar to some other European jurisdictions.
Pursuant to Russian legislation, the Ministry of Justice of the Russian Federation maintains a registry of advocates, who are admitted to the Russian legal bar. In-house lawyers do not have the opportunity to gain this distinction. Furthermore, the concept of legal professional privilege, termed advocates secrecy does not apply to in-house counsel.
By extension, the argument before the Court concerned that foreign in-house lawyers are not “appropriately qualified” to enjoy legal advice privilege under English law. As under English law, legal advice privilege applies to three types of lawyers: professional lawyers, i.e. legal advisers who are professionally qualified and are members of a professional body; in-house lawyers if they are admitted to practice and regulated; and foreign lawyers if they are “appropriately qualified.”
The counterargument stresses that pursuant to English law, as legal advice privilege applies for correspondence between a company and their in-house legal department, legal advice privilege thus applies also to advice obtained from foreign lawyers, regardless of whether they work in-house or externally.
The court highlights Three Rivers District Council and others (Respondents) v. Governor and Company of the Bank of England (Appellants) [2004] UKHL 48 in concluding that giving legal advice is in the public interest and it is vital that such communications are secure against the possibility of any scrutiny from others. The court followed with Prudential at [29], which stresses that legal advice privilege applies to communications in connection with advice given by members of the legal profession, which by extension includes foreign lawyers.
Prudential at [45] and at [126] also emphasises that any restrictions as to the foreign national standards or rules would further undermine legal advice privilege under English and Welsh law and thus would not need to be taken into consideration. The argument for extending legal advice privilege, pursuant to Prudential at [73] concerns fairness, comity.
Furthermore, when assessing whether foreign lawyers qualify for legal advice privilege under English and Welsh law, the function, rather than the status of the lawyer is relevant for the assessment. The status of the lawyer was the main argument for the defendants, as under Russian law, lawyers who are not Advocates and not registered with the legal Bar cannot enjoy local legal privilege rules. In the Court’s view, it is irrelevant, and one should only assess whether the foreign lawyer acts in a legal capacity when giving advice. The Court also stresses that if local rules were taken into account in assessing legal advice privilege, in-house lawyers in jurisdictions such as the Russian legal system could never enjoy legal advice privilege, as they cannot be Advocates.
The court concludes that the only requirement in order for legal advice privilege to attach is that they should be acting in the capacity or function of a lawyer, as expressed in Prudential at [19], specifically: “communications passing between a client and its lawyers, acting in their professional capacity, in connection with the provision of legal advice.”
The conclusion by the English court provides clarity for jurisdictions that draw a distinction between in-house lawyers and independent lawyers and the rules and regulations that separate the two professions, such as the obligation or inability to join a professional bar association. The judgment disregards specific rules that govern lawyers in other jurisdictions, which provides clarity in the applicability of English law and avoids any case-by-case exceptions to be developed.
