Walter Lilly & Company Ltd v Mackay & Anor

Legal professional privilege generally applies only to communications with a qualified and practising lawyer acting in that professional capacity. The character of the retainer is decisive. A claims consultancy does not attract privilege merely because it employs legally qualified personnel or provides advice involving legal issues. A client’s honest but mistaken belief about an adviser’s status does not extend the privilege. Exceptional circumstances may arise where a solicitor has ceased practising but is held out as still practising, but that exception does not apply to a claims consultant retained for claims and project-handling advice.

The claimant, a building contractor, applied during the trial for disclosure of documents created by or sent to Knowles Ltd, a claims consultancy retained by the defendants during a delayed construction project. The defendants claimed legal advice privilege, relying partly on their belief that two Knowles employees were qualified lawyers who had provided legal advice.

The court had to determine whether the retainer and the relevant communications fell within legal professional privilege. It also considered the lateness and alleged burden of the disclosure application, while leaving litigation privilege for adjudication-related communications undecided.

1. The application succeeded. The defendants were ordered to provide the further disclosure under the procedure agreed between the parties.
2. The court applied the principle stated in R (Prudential plc and another) v Special Commissioner of Income Tax [2010] EWCA Civ 1094: at common law, legal professional privilege does not extend to professionals other than qualified lawyers. The privilege requires a clear and certain boundary.
3. The nature of the engagement was decisive. Knowles was retained as a claims consultancy to provide contractual, adjudication, claims and project-handling advice. It was not retained as solicitors or barristers. The retainer’s references to an “Advocate” and “Legally Qualified Person”, and its separate mechanism for retaining solicitors, supported that conclusion.
4. The defendants failed to establish that the relevant Knowles personnel were practising barristers or solicitors during the material period. In any event, the defendants’ honest belief that they were receiving advice from practising lawyers was immaterial because Knowles itself had not been retained to provide solicitor or barrister services.
5. The exceptional situation discussed in Calley v Richards (1854) 19 Beaver 401 was distinguishable. That case concerned a former solicitor held out by a solicitors’ firm as still being in practice. It did not extend privilege generally to non-lawyer advisers.
6. The lateness objection failed. The documents should have been disclosed originally, the documents were held electronically, and the further search and disclosure could be undertaken relatively easily.
7. The decision concerned legal professional and legal advice privilege only. It did not determine litigation privilege, including whether advice and communications by claims consultants connected with adjudication proceedings may attract that privilege.