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Legal professional privilege - blurred boundaries

Publication: 
Nigel Morris-Co...
chiefofficersnet

Legal professional privilege used to be simple: if a document or thing came to the attention of a lawyer in the course of, or in during preparation for, litigation it was privileged. That was it. Simple, clear and everyone knew where they stood. Then some twit decided to invent "legal advice privilege" which tends to the view that anything said between a lawyer and his client is privileged. Then no one knew where they stood because, in England and Wales and therefore in other jurisdictions following that, behind all of this lay two fundamental principles: a solicitor is an officer of the Court and must not mislead the Court and legal professional privilege breaks when a client attempts to involve the solicitor in the commission of a crime. Advocates of legal advice privilege were not supportive of that.

There is one more wrinkle: if a solicitor found out things that prejudiced his client's case, there was a circuit breaker: send Counsel (a barrister) to Court and don't tell him about the bad information. Gradually, however, the Rules of Court have eaten away at that by insisting on the filing of ever greater documentation setting out claims. In fact, the opportunity for advocacy is now hugely curtailed compared to, say, thirty years ago. Indeed, there are many cases, or stages in cases, decided on the papers without the attendance of advocates. Those papers are submitted by solicitors, even if they are drafted by Counsel and bear Counsel's name. The solicitor, therefore bears responsibility, as an Officer of the Court, not to mislead the Court.

That brings us to a case that is exercising the English Courts now.

In divorce and other family law cases, it has long been common for one party to lie about assets. For those that think "lie" is too strong a term, remember that the parties are required to disclose, in their statements of income, assets, outgoings and liabilities, all their financial affairs. When a party submits a statement omitting, say, assets and certifies it as true, that is a lie.

When that party tells the solicitor about assets which are not disclosed, then the solicitor is in a difficult position. The information has come into his possession in the course of, or in preparation for, litigation. It is therefore clearly within the scope of legal professional privilege. If his client says "but we aren't going to tell anyone about that," then the solicitor's position becomes untenable. His responsibility is simple - just as in a criminal trial where the accused says "I did it but I'm going to deny it when I give evidence," the solicitor must withdraw, i.e. sack the client.

In a divorce case, there is no right to simply sack the client without informing the court and this is, usually, done by the solicitor in person. But because of legal professional privilege, the solicitor cannot tell the court why. For this reason, there is a code: the solicitor says "I must withdraw for professional reasons." The Judge knows not to go behind that statement. He also knows, or strongly suspects, that the solicitor has been instructed to do something unprofessional and that, as a result, there is something that the Judge should dig around to find when the case restarts with new representation.

In a case that has rocketed through the Family Division, a conference with counsel, the husband client and the solicitor was characterised by information revealed by the client which was subsequently excluded from the documents and evidence. In divorce proceedings commenced in 2013, a consent order was made in 2014. In 2017, the wife applied to set aside the consent order and the application was dismissed. It was during those appeal proceedings that the conference took place. Subsequently, while reviewing the papers a clerk (in today's argot "a paralegal") found the notes of the conference and realised that the husband had not disclosed his true financial position. Without referring what she had found to a partner, the clerk sent the material directly to the Judge.

The Judge read it. That was an error of judgment: the Judge should have realised that the documents were prima facie privileged. There are procedures in place for what should happen in such circumstances. Having read it, the Judge withdrew, saying she was now unable to proceed. The case was transferred to Mr Justice Holman who promptly said he did not have all the necessary information and that, in any case, the issues of legal professional privilege were beyond his ken and he shunted it up to the President of the Family Division. The specific concern raised by Holman, J. was that now the wife had the information because it had been purposely sent to her by the Judge and this was a novel circumstance.

His reasoning is thus: "It is not difficult to see that if some employee of a firm of a solicitors can disclose what is otherwise prima facie privileged material, whether to the court or to the other side, the whole edifice of legal professional privilege might rapidly crumble. On the other hand fraud is fraud and my current understanding is that legal professional privilege cannot, in the end, withstand the unravelling of fraud or similar malpractices if (I stress if) they have taken place."

It is important to note that Holman, J is talking specifically about legal professional privilege, not the dodgy legal advice privilege concept.

And so the case stands: it will be listed before the President later this year and someone is going to have to come to a conclusion about what to do about the evidence which, seemingly, demonstrates a wilful misleading of the Court and, of course, the wife.

The next issue is that of professional conduct: all employees within a law firm are subject to the Code of Professional Conduct although it is certain that almost none receive any training on it, except to be told of the duty of confidentiality and then usually in simplistic terms. The so-called whistle-blowing here is interesting. Had the report that the solicitor knew of the lie and produced and filed and served documents containing it been sent to the Solicitors' Regulatory Authority, that would have been a proper course of action. However, sending it to the Court is more complicated. Ultimately, it is the Courts who regulate solicitors because they are Officers of the Court. In practice, they do so by making referrals to the SRA which then faffs about, decides in a black-bag whether to act and if it does decides whether to impose a penalty or to refer the case to the Solicitors' Disciplinary Tribunal.

Here, the passing of the information did not, it appears, directly refer to the conduct of the solicitor but to the false information provided to the Court, a falsity from which the husband benefited. The clerk may well find her career in law is over: passing the information to the Court is not protected whistle-blowing while a referral to the SRA, which would not have benefited the wife, is.

As Holman, J said: fraud is fraud and it should be possible for it to be disclosed. But the rules in civil cases and criminal cases are different. Legal Professional Privilege breaks if the client requires the solicitor to commit a crime. Contempt of Court and misleading the court are not crimes. So far as this author can recall, there is no clear authority that says that Legal Professional Privilege breaks in relation to conduct that is not criminal in nature. The question, then, is whether the concealing of assets in order to obtain a better settlement in divorce proceedings can be considered a criminal act. Logically, there is no reason why not.

Section 3 of The Fraud Act 2006 says
"Fraud by failing to disclose information

A person is in breach of this section if he—

(a) dishonestly fails to disclose to another person information which he is under a legal duty to disclose, and

(b) intends, by failing to disclose the information—

--(i) to make a gain for himself or another, or

--(ii) to cause loss to another or to expose another to a risk of loss.

On the face of it, then, there was a conspiracy to commit criminal, not only civil, fraud and therefore Legal Professional Privilege was not merely broken but shattered. In those circumstances, arguably, the clerk was no longer subject to the Rules and making the report to the Judge was not merely a protected disclosure but free of risk.

Sadly, it is unlikely that that is the decision that the Regulator will come to when, inevitably, she is the one who ends up before it.

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