The Court ruled on the “dominant purpose” test and offered guidance on the status of multiparty emails, and attachments.
By Oliver Browne and Clare Nida
Two recent Court of Appeal judgments have sought to clarify, and offer practical guidance relating to, legal professional privilege.
In Civil Aviation Authority v. R (on behalf of the application of Jet2.com Ltd)  EWCA Civ 35, the Court considered first whether the “dominant purpose” test still applies in order for a communication to fall within the scope of legal advice privilege. Second, in light of its consideration of this issue, the Court examined the proper approach to determining the status of communications among multiple recipients, and whether emails and attachments hold the same status.
Soon after, in Sports Direct International plc v. The Financial Reporting Council  EWCA Civ 177, the Court overturned a first instance decision that the production of the client’s privileged documents to the regulator would not infringe the legal professional privilege belonging to the client.
Jet2.com Ltd (Jet2) brought judicial review proceedings against the Civil Aviation Authority (CAA), which had issued a press release identifying Jet2 as not having signed up to a voluntary dispute resolution scheme intended to deal with disputes between airlines and consumers. The CAA provided correspondence between the parties to the Daily Mail. Jet2 claimed the CAA had acted ultra vires in issuing the press release and publishing the correspondence, and argued that the CAA’s actions were for an improper purpose (namely, punishing Jet2 for not signing up to the scheme, and to force it to sign up in future).
Jet2 sought specific disclosure of the drafts and discussions surrounding the published correspondence, but the CAA claimed these were privileged as their in-house lawyers had reviewed the letters. The first instance court found that the drafts and discussions were not protected by legal advice privilege, and the CAA appealed.
Dominant Purpose in Legal Advice Privilege
Legal advice privilege applies to confidential communications that pass between a client and the client’s lawyer and that have come into existence for the dominant purpose of giving or receiving legal advice.
The first issue was whether the dominant purpose test still applies in the context of legal advice privilege. Citing the numerous authorities that stated that it was necessary for the legal advice to be the dominant purpose of the relevant communication, the Court also considered the more recent judgment of Serious Fraud Office v. Eurasian Natural Resources Corporation Limited  EWCA Civ 2006, which suggested (obiter) that “dominant purpose” was tautologous (See Internal Investigations Protected By Privilege Once More?). In Jet2, the Court rejected this approach and confirmed that establishing the dominant purpose was still a requirement.
Having established that the dominant test is required, the Court considered circumstances where a communication is sent simultaneously to lawyers and non-lawyers. It was found that the dominant purpose test applies to each communication. Multi-party emails should be considered as separate communications between the sender and each recipient, and should be considered as part of a “continuum of communications”, i.e., if the email is part of a chain, whether the dominant purpose of the series of communications is legal or commercial. As a general rule, a response from a lawyer that contains legal advice will almost certainly be privileged (even when the advice is copied to more than one addressee).
The Court was clear that the same rule applies to meetings, including minutes of meetings, where lawyers and non-lawyers are present. If the dominant purpose of the meeting is commercial, with a lawyer present just to add legal input as and when required, then the meeting will generally not be privileged, save for any legal advice given. If the dominant purpose of the meeting is to obtain legal advice, then the whole contents of the meeting will be privileged.
Emails and Attachments
The Court made clear that emails and attachments need to be considered separately in the context of legal advice privilege. A document that is not privileged does not become so simply because it was sent to lawyers. However, if a cover email explains that a document is attached, and that the document is privileged, then the cover email may well be privileged if it discloses or reveals the legal advice received or sought.
The Financial Reporting Council (FRC) is currently investigating Grant Thornton regarding the audit of Sports Direct’s 2016 financial statements. The FRC issued a notice to Sports Direct seeking certain categories of documents under the provisions of the Statutory Auditors and Third Country Auditors Regulations 2016 (SATCAR). Sports Direct provided the FRC around 2,000 documents but withheld 40 documents on grounds of legal professional privilege.
The FRC did not accept that Sports Direct was entitled to withhold those 40 documents and won at first instance on two grounds: (i) that the production of documents to a regulator by a regulated person does not infringe any legal professional privilege of clients of the regulated person in respect of those documents and (ii) in the alternative, some of the attachments to emails were pre-existing documents and were not protected by privilege simply by being attached to privileged emails. Sports Direct brought an appeal on both grounds.
The Court of Appeal overturned the decision regarding the infringement of privilege. Lady Justice Rose stressed that privilege is a fundamental human right and that, other than waiver by the client, there are only two exceptions: (i) the iniquity principle (the “crime-fraud exception”) and (ii) where the right has been expressly modified or abrogated by statute. SATCAR does not contain an express provision overriding legal professional privilege. Therefore, there was no justification for the FRC’s argument that its request did not infringe legal professional privilege.
Emails and Attachments
Following Jet2, the Court upheld the decision that emails and attachments should be considered separately for privilege. Interestingly, though, the Court also rejected Sports Direct’s alternative argument that if the attachments were to be regarded as separate documents, then they should also individually meet the criteria set out in the request for documents. The Court found that an attachment meets the criteria and falls within the scope of the relevant requests simply by being attached to a relevant email, regardless of whether that email is privileged.
The FRC has sought permission to appeal to the Supreme Court on the first issue, and Sports Direct has sought permission on the second issue.
What’s Next for Privilege
In summary, the dominant purpose test applies to legal advice privilege even when there are multiple recipients to an email or meetings. However, in-house lawyers and clients would be prudent to keep emails and meetings relating to legal advice separate to commercial discussions, if practical.
Future cases will likely seek to refine the rules regarding legal professional privilege. The judges in Jet2 were troubled by the narrow interpretation of “client” in Three Rivers (i.e., that only the employees tasked with speaking to lawyers count as the client for purposes of privilege). This issue remains ripe for consideration at the Supreme Court.
Whilst Sports Direct was clear, affirming that attachments to emails need to be separately assessed for privilege in document reviews, the judgment raises the issue of whether the attachment needs to respond to the disclosure obligations on its own merit.
This post was prepared with the assistance of Callum Rodgers in the London office of Latham & Watkins.
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