Advice by Claims Consultant not protected by Legal Professional / Advice Privilege

A recent English High Court decision in the case of Walter Lilly & Company Ltd v Mackay & Anor [2012] EWHC 649 (TCC), has reaffirmed the proposition that legal professional privilege does not apply, at common law, in relation to any professional other than a qualified lawyer, that is, a solicitor or barrister, or an appropriately qualified foreign lawyer. The advice rendered by a claims consultant firm, though legal in nature and having legally trained staff, is not protected by legal advice privilege.

Our sister blog, Constructive, has a post detailing the facts as well as the High Court’s reasoning on the matter and is worth repeating here.

In the case of Walter Lilley & Company Limited v (1) Giles Patrick Cyril Mackay and (2) DMW Developments Limited, Walter Lilly (“WLC”) made an application in relation to claims by DMW Developments Limited (“DMW”) that certain documents provided to DMW by a claims consultant attracted legal advice privilege and had been mistakenly disclosed to WLC. The application was heard by Mr Justice Akenhead in the TCC and his decision provides clarification on the circumstances in which documentation produced by claims consultants may attract legal advice privilege where it provides advice about a client’s legal position.

Legal advice privilege protects advice given by a practising qualified solicitor or barrister to a client from disclosure to the opposing party or to the court and it applies whether or not litigation is pending or contemplated. Litigation privilege is another type of privilege but it only applies where litigation is pending or contemplated, however, unlike legal advice privilege, litigation privilege can also apply to communication by a client or his lawyer and a third party. Litigation privilege was not addressed in this application.

DMW as developer had employed WLC to construct a house inLondon. Mr Mackay and his wife were to be the owners and occupiers of the house. Following a number of delays to the works, WLC put in claims for extensions of time and related loss and expense. Mr Mackay and DMW engaged Knowles Limited (“Knowles”) as claims consultants to provide “contractual and adjudication advice” in relation to those claims. The retainer also included services of a “Legal Qualified Person”. Mr Mackay’s witness statement stated that they “needed … a lawyer” and that “the questions posed to Knowles were of a legal nature and it was very clear … that the advice … received was both legal in nature and from people who held themselves out to be lawyers”.  The correspondence to and from Knowles had been disclosed in the trial bundles.  DMW argued that the documentation attracted legal advice privilege and should not have been included in the bundles.

In considering the application, Akenhead J suggested that “the primary argument revolves around whether or not Knowles were engaged as Solicitors or Barristers”. The Court ultimately concluded that Knowles’ advice did not attract legal advice privilege and did not, therefore, benefit from protection from disclosure. The court based its decision on the following factors:

  • Knowles is known for its provision of claims consultancy services and does not hold itself out as a certified firm of practising solicitors or qualified group of practising barristers, despite certain employees holding professional legal qualifications. Knowles’ primary professional role in this project appears to have been to provide consultancy services and Akenhead J found that it was not retained to provide legal advice as such.
  • Whilst Mr Mackay may have understood in good faith, albeit mistakenly, his principal contacts at Knowles to be practising solicitors or barristers (and therefore that any advice provided by these individuals attracted legal advice privilege), Akenhead J considered this to be “immaterial because their employer was not retained by the Defendants to provide the services of barristers or solicitors”.

This judgment highlights that legal advice privilege does not operate to protect a party which believes that it is receiving legal advice from a qualified and practising solicitor or barrister, where the individuals or companies providing the advice have not held themselves out as qualified practising solicitors or barristers or been retained to provide services as such.

Whilst the decision in this application does not address litigation privilege, Akenhead J concludes his judgment with speculation as to whether advice or communications produced by claims consultants in relation to adjudication proceedings may be considered privileged. In any event, parties to construction disputes need to exercise care and attention when appointing and communicating with claims consultants as their advice is not likely to benefit from legal advice privilege.

It should be noted that this decision followed the English Court of Appeal decision in Prudential Plc & Anor, R (on the application of) v Special Commissioner of Income Tax & Ors [2010] EWCA Civ 1094 which held that an accountant’s advice similarly did not attract the privilege protection as an accountant was not a qualified lawyer.

The take-away point is this: Parties who wish to obtain legal advice and be certain that they do not have to disclose such advice, documents and correspondence to the other party in adversarial proceedings (whether it be litigation, arbitration, adjudication or even expert determination) should make sure that they consult practising qualified lawyers, not anyone else.

About Shaun Lee

International Dispute Resolution and Arbitration lawyer. Fellow of the Chartered Institute of Arbitration. Panel of Arbitrators and Panelist for Domain Name Dispute Resolution at the KLRCA.
This entry was posted in Arbitration and tagged , , , , , , , , . Bookmark the permalink.

One Response to Advice by Claims Consultant not protected by Legal Professional / Advice Privilege

  1. Pingback: Case Update: Accountants not entitled to assert legal advice privilege | Singapore International Arbitration Blog

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