Client Communications Remain Subject to Legal Advice Privilege Notwithstanding Dissolution and Crown Disclaimer
The Court of Appeal’s recent decision in Addlesee & Ors v Dentons Europe LLP has confirmed that the documents of a dissolved company remain subject to legal advice privilege (“LAP“) even if there is no longer a benefitting client entitled to assert LAP.
Investors (“Claimants“) brought proceedings against Dentons Europe LLP (“Defendant“) who acted for an allegedly fraudulent investment scheme operated by a Cypriot company (“Company“). The Claimants alleged that the Defendant recklessly and/or negligently enabled the scheme and induced the Claimants to invest by endorsing it as the Company’s legal advisor.
The Company was dissolved in January 2016 and to the extent that any rights relating to the documents passed to the Crown as bona vacantia, the Crown disclaimed all interest in them “…without either asserting or waiving any legal professional privilege“.
In September 2018 the Claimants applied for a declaration that documents in the Defendant’s client files were not protected by LAP and an order for disclosure.
High Court Decision
The High Court considered Garvin Trustees Ltd v The Pensions Regulator  Pens LR 1 in which it was held that documents of a dissolved Northern Irish company were not subject to LAP. The High Court distinguished Garvin as the Company could be restored to the register under Cypriot law, whereas the Upper Tribunal in Garvin held that such restoration of the Northern Irish company was not possible. The High Court therefore concluded that LAP should be maintained until there is no prospect of privilege being enforced by the person entitled to it i.e. until there is no prospect of a dissolved company being restored to the register.
The Claimants appealed.
Court of Appeal Decision
The Court of Appeal dismissed the appeal, although on different grounds to the High Court’s judgment. The Court found that the principle applied in Garvin was incorrect as LAP would never expire, even if there was no legal possibility of a company being restored to the register.
The Court considered that leading authorities had established LAP as an absolute right which remains in place unless it is waived by a client. This was because LAP is a fundamental condition on which the administration of justice as a whole rests.
The Court confirmed that LAP is not merely a private right which must belong to someone. LAP attaches to and becomes an inherent characteristic of a document or communication. Therefore, LAP will still exist even if there is no one capable of asserting it. Lewison LJ stated “[i]t is not a question of who can assert privilege. It is a question of who can waive it; and if there is a person entitled to waive privilege, whether they have done so.”
It was further held that where the Crown disclaims an interest in documents passed to it following the dissolution of a company, this would not have the effect of waiving or destroying the privilege in those documents.
This judgment clearly enshrines the sacrosanct and interminable “human right” of clients to benefit from privilege in their communications with their lawyers, unless it is waived by a person entitled to do so. It is evident that the public policy for LAP was key to the Court’s decision, namely that a client should be able to consult its lawyer without fear of privileged communications being disclosed without its consent.