THE THREE RIVERS DISTRICT COUNCIL SAGA: NEW ISSUES OF PROFESSIONAL PRIVILEGE FOR A SINGAPORE COURT TO DECIDE

Published date01 December 2005
Date01 December 2005

Recent case law in England raises deep concerns about the scope of legal professional privilege in two main respects: first, whether communications (pertaining to legal advice) between a company’s employees (on behalf of the company) and its lawyers are protected in favour of the company and second, whether communications between the company and its lawyers must have a specific legal consequence (as opposed to merely broad legal advice) in order justify the operation of the privilege. These issues will also be examined in the context of s 128 of the Evidence Act which, being a vestige of the 19th century, falls short of the demands of the modern commercial environment.

I. Introduction

1 Recent statements in England about the fundamental importance of the privilege which attaches to confidential communications between a client and his lawyer1 (commonly termed as “legal advice privilege”) have not been matched by the certainty one would expect for such a hallowed doctrine. Indeed, the anxiety has been such that an unsuccessful attempt was made in one recent case before the House of Lords to raise an unrelated decision of the Court of Appeal for clarification.2 The controversy concerns the scope of legal advice privilege and, in particular, whether the involvement of employees of a company in the process of providing confidential information so that the company can be properly advised, justifies the application of the privilege. As a company can only

act through its employees, the view might be taken that some measure of protection of an employee’s communications is necessary to ensure the company’s proper operation as a commercial entity. This is also a vital issue for the Singapore courts who, if in the very likely event that the issues arise here, would have to grapple with the 19th century concept of privilege formulated in the Evidence Act3 and relate it to the modern context of legal practice.

II. Three Rivers District Council v Governor and Company of the Bank of England (No 5)[2003] QB 1556
A. Facts and issues

2 The liquidators and creditors (“the claimants”) of the former Bank of Credit and Commerce International SA (“BCCI”) (which had collapsed) instituted legal proceedings against the Bank of England (“BoE”) for “misfeasance in public office” in respect of its supervision of BCCI before the collapse. The claimants sought discovery of a variety of documents which had been provided to a non-statutory inquiry (“the Inquiry”) conducted by Bingham LJ into the collapse of BCCI. For the purpose of the Inquiry, the BoE set up a unit within itself, the Bingham Inquiry Unit (“the BIU”), in order to deal with all matters relating to the Inquiry and to receive legal advice4 concerning its communications with the Inquiry including the preparation and presentation of the BoE’s evidence and submissions to the Inquiry.5

3 The claimants accepted that the documents passing between the BIU (which the claimants contended, and the court accepted, was the true client in this situation6) and its lawyers and the documents evidencing those communications (such as the lawyers’ internal memoranda and drafts) could not be disclosed because they were protected by legal advice privilege.7 Instead, they applied for disclosure of four categories of documents emanating from the employees of the BoE:

(a) Documents intended to be sent, and which were sent, to the lawyers. These documents were prepared or commissioned

for the dominant purpose of obtaining legal advice from the lawyers, (or pursuant to the retainer between the BoE and its lawyers).8

(b) Documents prepared or commissioned for the dominant purpose of obtaining legal advice (or pursuant to the retainer between the BoE and its lawyers) but which were not sent to the lawyers.9

(c) Documents sent to the lawyers although there was no indication that they were prepared or commissioned for the dominant purpose of obtaining legal advice (or pursuant to the retainer between the BoE and its lawyers).10

(d) Documents within the first three categories sent by employees at the time but who had since left their employment.11

The BoE contended that these documents were protected by legal advice privilege and, consequently, not disclosable.12

B. Decision of the High Court and Court of Appeal

4 In the High Court,13 Tomlinson J ruled that all the documents were privileged on the basis that they were brought into existence for the purpose of obtaining legal advice in relation to the Inquiry:14

In my judgment an internal confidential document, not being a communication with a third party, which was produced or brought into existence with the dominant purpose that it or its contents be used to obtain legal advice is privileged from production. The purpose must be that of the author, or of the person or authority under whose direction,

whether particular or general, it was produced or brought into existence.

5 Applying the terminology of the Court of Appeal in Balabel v Air India15 (a leading case on the scope of communications protected by legal advice privilege), Tomlinson J was of the view that the documents were prepared or commissioned pursuant to the retainer between the BoE and the legal advisers as part of the necessary “exchange of information” of which the object was the giving of legal advice.16

6 The Court of Appeal disagreed with the High Court and held that legal advice privilege only applied to communications between a client and his lawyer, documents evidencing such communications and to documents intended to be such communications (but which are not in fact communicated).17 As the BIU was regarded as the client by the court,18 none of the documents within the four categories19 were communications for the purpose of legal advice privilege. The Court of Appeal in Three Rivers (No 5) considered a series of authorities and also emphasised Taylor LJ’s judgment in Balabel, but to different effect. The Court of Appeal accepted that for legal advice privilege to apply, a document must be, in Taylor LJ’s words in Balabel, “part of that necessary exchange of information of which the object is the giving of legal advice as and when appropriate”.20 It ruled that the documents within the four categories could not be regarded as coming within this definition.21

7 In reaching its conclusion in Three Rivers (No 5) that legal advice privilege did not apply to the four categories of documents, the Court of

Appeal distinguished between information provided to a lawyer for the purpose of obtaining legal advice and information provided to a lawyer so that he can present the client’s case in “the most favourable light” (ie, for the purpose of presentation).22 In the court’s view, all four categories of documents — whether supplied at the outset by the employees and ex-employees to the BIU or subsequently supplied to the BIU in response to the Inquiry’s requests for information — were provided for the purpose of presentation to the Inquiry rather than for the purpose of legal advice. Accordingly, they were not privileged.23 In the case of documents supplied from the outset of the Inquiry, such information, in the view of the Court of Appeal, was merely “raw material for presentation to the [I]nquiry”.24 Pointing to Taylor LJ’s words in Balabel, the Court of Appeal in Three Rivers (No 5) determined that the “continuum of communication … as to what should prudently and sensibly be done in the relevant legal context” had not yet begun at that stage.25 Although the Court of Appeal was of the view that there was such a “continuum of communication” at the time that information was provided in response to requests from the Inquiry, again the dominant purpose was not to obtain legal advice but to put “relevant factual material before the [I]nquiry in an orderly and attractive fashion”.26 It will be argued that this approach of separating legal advice from presentational advice is contrary to the Balabel principle and the purport of s 128 of the EA.27

III. Legal position in Singapore
A. Applicable law

8 In order to determine how a Singapore court would resolve the

issues raised in Three Rivers (No 5), it is necessary to consider the approach of the EA towards communications between a client and his lawyer. Sections 128 and 131 are the principal provisions in this respect.

Section 128(1) imposes the obligation of non-disclosure of privileged communications in judicial proceedings28 on the advocate and solicitor:29

No advocate or solicitor shall at any time be permitted, unless with his client’s express consent, to disclose any communication made to him in the course and for the purpose of his employment as such advocate or solicitor by or on behalf of his client, or to state the contents or condition of any document with which he has become acquainted in the course and for the purpose of his professional employment, or to disclose any advice given by him to his client in the course and for the purpose of such employment.

9 Section 131, the counterpart of s 128, entitles the client (whose privilege it is) to refuse to answer questions which elicit privileged communications:

No one shall be compelled to disclose to the court any confidential communication which has taken place between him and his legal professional adviser unless he offers himself as a witness, in which case he may be compelled to disclose any such communications as may appear to the court necessary to be known in order to explain any evidence which he has given, but no others.

10 It is clear that s 128 sets out the legal elements of the privilege (because it is this section which creates the legal obligation of nondisclosure), while s 131 embraces those elements with the more generic terminology of “any confidential communication”. Therefore, where an issue of whether the client can refuse to answer a question on the basis of privilege arises, the court would make its...

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