Disputes Quick Read: Privilege lost in the EU post-Brexit (with exceptions)

Quick read

With the Brexit transition period ending on 31 December 2020, you'll need to understand the impact the UK's departure from the European Union will have on your ability to assert privilege over your communications with your lawyers.

If you operate in Europe

If your organisation operates in Europe, it's important to note that – as there's no agreement currently in place regarding legal professional privilege – from 1 January 2021, solicitors qualified in the UK and not within a European jurisdiction will likely be treated as third-party lawyers.

As such, they won't attract privilege in matters before the European Commission such as competition investigations and related proceedings.

Moreover, communications between an organisation and its internal legal teams do not generally attract privilege in such matters, as in-house lawyers aren't considered to be sufficiently independent.

What about the English courts?

Back at home, the English court has provided helpful guidance in PJSC Tatneft v Bogolyubov & Ors, as to how the English courts will determine whether privilege applies to communications between an organisation and its internal legal teams, which may be internationally qualified.

In that case, the court held that legal advice privilege applied to communications between a client and its Russian in-house legal team, despite the fact that those communications would not attract privilege under Russian law.

If your business is currently in (or becomes involved in) court proceedings in England and Wales, the laws and procedural rules of England and Wales will govern issues of privilege – not the laws of the location in which the lawyers are practising.

Legal advice privilege

Under English law, legal advice privilege (LAP) entitles a person to withhold from disclosing confidential communications which pass between an individual and their lawyer, which have been created for the dominant purpose of giving or receiving legal advice.

LAP also applies to communications between the client and solicitors acting in private practice, as well as those that are employed by organisations as lawyers (ie in-house lawyers). Save for a few limited exceptions, in-house solicitors will, however, still need to maintain their regulatory status.

Under English law, LAP will also extend to communications between a client and its foreign lawyers.

In this case, the applicant sought to rely on the fact in Russia in-house lawyers – ie those employed by organisations – don't meet the regulatory requirements imposed on in-house lawyers under English law.

This is because there is a distinction in Russia between "Advocates" who are considered to be independent professional lawyers (who are members of the Russian bar and regulated by Russian Federal Law) and other lawyers (such as those working within the claimant's legal department) who are not Advocates.

Additionally, under Russian law, the concept of Advocate's secrecy (the closest equivalent to LAP) only applies to Advocates. On that basis, the applicant sought to argue that LAP should only extend to communications between a client and its Advocate, and not to those with the legal advisers working within its own legal department.

The court's decision

In finding that the communications in question were covered by LAP under English court, the court held as follows:

LAP will apply to foreign lawyers in the same way that it applies to lawyers qualified in England and Wales provided that those lawyers are carrying out "the role of lawyer".
It's the function of the lawyer that's relevant, not whether they have the same regulatory qualifications and requirements as solicitors and barristers qualified in this jurisdiction.
There's no additional requirement that foreign lawyers be "appropriately qualified" or regulated as "professional lawyers".
As a result, the English court won't investigate the regulatory requirements of the jurisdiction in which foreign lawyers are qualified or practising as a lawyer in determining whether privilege applies.

Whether the same documents would be disclosable in any proceedings in Russia would be determined by the procedural rules in Russia.

Here to help

This case serves as an important reminder that where legal advice is being sought from either internal legal teams or external firms of solicitors outside of the UK, the application and any limitations of privilege should be considered at the outset.

Please get in touch with a member of our Disputes & Investigations team if you'd like to discuss how we can assist you with this.

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