Three Rivers District Council & Ors v The Governor & Company of the Bank of England Rev 1

Legal advice privilege protects confidential communications between a client and its legal advisers, and evidence of their contents. It does not protect an employee’s internal notes or factual material merely because it was prepared for, or sent to, solicitors to obtain advice.

For a corporate client, the relevant client comprises those authorised to seek and receive the advice. The privilege does not extend to communications between other employees and that group. The broader protection available for material prepared for litigation does not apply to a non-adversarial inquiry.

The appellants, liquidators and creditors of BCCI, brought proceedings for misfeasance in public office against the Bank of England. During disclosure, the Bank claimed legal advice privilege for documents created after BCCI’s collapse and during the Bingham Inquiry.

Tomlinson J held that an internal confidential document was privileged if it was created with the dominant purpose of using it or its contents to obtain legal advice. The claimants appealed. They accepted that the Bingham Inquiry Unit was the Bank’s client for communications with Freshfields, but contended that factual material supplied by other employees and former employees was not privileged.

The central issue was the extent of legal advice privilege where litigation privilege could not arise because the inquiry was non-adversarial.

1. Appeal allowed. The court held that the Bank could not claim legal advice privilege for the four disputed categories of documents. Subject to argument on detailed wording, it would grant the claimants’ proposed declaration and require a further and better list of documents.

2. Legal advice privilege is a distinct category of legal professional privilege. It protects confidential communications between client and legal adviser, including evidence of their contents. It does not protect documents merely because they contain information sought for legal advice, are prepared for a solicitor, or are sent to one.

3. The nineteenth-century authorities, particularly Anderson v Bank of British Columbia (1876) 2 Ch.D. 644 and Wheeler v Le Marchant (1881) 17 Ch.D. 675, established that wider protection for material gathered from agents or third parties belongs to litigation privilege. It does not form part of legal advice privilege where litigation is neither pending nor contemplated.

4. The relevant client was the Bingham Inquiry Unit, which had been appointed to seek and receive Freshfields’ advice. Other Bank employees and former employees did not become the client merely by supplying factual material to that unit or directly to Freshfields. Their material was raw material for the Bank’s submissions to the inquiry.

5. The court also held that, had dominant purpose been decisive, the material was prepared principally to place relevant facts before the inquiry in an orderly and favourable form, rather than to obtain legal advice. That conclusion was not necessary because the documents lay outside the proper scope of legal advice privilege in any event.

6. Litigation privilege was unavailable because, under Re L [1997] 1 AC 16, it is confined to adversarial proceedings and the Bingham Inquiry was non-adversarial. Leave to appeal to the House of Lords was refused, with the order suspended pending any petition for leave.

• Court of Appeal (Civil Division): Allowed the claimants’ interlocutory appeal and reversed Tomlinson J’s conclusion that the Bank’s internal documents could attract legal advice privilege on a dominant-purpose basis.

• High Court, Queen’s Bench Division, Commercial Court (Tomlinson J): Held that an internal confidential document, not involving a third party, was privileged if created with the dominant purpose that it or its contents be used to obtain legal advice.