Addlesee & Ors v Dentons Europe LLP

Legal advice privilege attaches when a lawyer-client communication is made for the purpose of giving or receiving legal advice, otherwise than for an iniquitous purpose. Once established, it remains absolute unless the person entitled to waive it does so, or legislation overrides it expressly or by necessary implication.

Dissolution of a corporate client does not end the privilege merely because nobody remains able to assert or waive it. The privilege inheres in the communication and its continuing protection serves the public interest in candid legal consultation. A disclaimer by the Crown of property passing as bona vacantia is not equivalent to waiver. The former lawyer must assert an arguable privilege and may contest disclosure proceedings for that purpose.

Investors alleged that a scheme marketed by the Cypriot company Anabus Holdings Ltd was fraudulent and claimed damages from its former English lawyers, now Dentons Europe LLP, for deceit or negligence. They sought disclosure of communications which were assumed to have attracted legal advice privilege when created. Anabus had been dissolved, and the Crown had disclaimed any interest in its former property without asserting or waiving privilege.

Master Clark refused disclosure. She distinguished Garvin Trustees Ltd v The Pensions Regulator, where the Upper Tribunal had held that privilege did not survive the dissolution of a corporate client, because Anabus could still legally be restored. The investors appealed and also challenged the costs order.

The central issue was whether privilege, once attached, continues until waived, or is lost when no person remains entitled to assert it when disclosure is sought.

1. Appeal dismissed unanimously. Legal advice privilege is established by the nature and purpose of the communication and the circumstances in which it was made. Its boundaries encompass confidential lawyer-client communications made in connection with giving or receiving legal advice, except communications made for an iniquitous purpose. The assumed communications therefore possessed an immune status from the time of their creation.

2. Once established, privilege remains unless waived by the client or another person entitled to waive it, or overridden by legislation. Its continued existence does not depend upon a living or extant client asserting it. Requiring an identifiable current right-holder would retrospectively alter the protection promised when the advice was sought and would undermine the public policy supporting candid consultation with lawyers.

3. Dissolution of a corporate client does not create an exception to the principle that privilege continues. The relevant question is not who can assert privilege, but who can waive it and whether waiver has occurred. It was immaterial whether nobody could now waive Anabus's privilege or whether the Crown possessed that power but had not exercised it. Garvin Trustees Ltd v The Pensions Regulator was overruled.

4. The court did not need to decide whether the power to waive privilege passed to the Crown as bona vacantia. If it did not pass, nobody could waive the privilege. If it did pass, the Crown's disclaimer expressly avoided waiver. Disclaimer renounces the disclaiming person's rights and liabilities but does not necessarily destroy the underlying subject matter; it could not be treated as voluntary disclosure or waiver.

5. A lawyer has no privilege of his own but must assert an arguable privilege belonging to a client or former client. Dentons was therefore entitled to resist the mandatory disclosure order. Master Clark was entitled to treat it as the successful party and award it 80 per cent of its costs. The costs appeal was also dismissed.

• Court of Appeal (Civil Division): Dismissed the investors' appeal, overruled Garvin Trustees Ltd v The Pensions Regulator, and upheld both Master Clark's refusal of disclosure and her costs order: [2019] EWCA Civ 1600.
• High Court, Business and Property Courts (Business Court, Chancery Division): Master Clark held that privilege subsisted. She distinguished Garvin because restoration of the dissolved company remained legally possible and ordered the investors to pay 80 per cent of Dentons' costs. No citation is stated in the judgment.