- Everyone knows that the privilege of communications between client and lawyer is a fundamental principle of English Common Law. But there has been some uncertainty as to what happens if the privilege is waived for the purpose of some litigation. That, it seems to me, is clearly dealt with by the Court of Appeal in the recent case of Eurasian Natural Resources Corp Ltd v Dechert LLP  1WLR 5027.
- That case concerned the detailed assessment of bills which had been delivered to the Claimant Company by Dechert, its former solicitors. The primary issue was whether or not the hearing of the detailed assessment could properly be held in private. The general rule of course is that any hearing, even of such a matter as the assessment of costs, has to be in public. On the special facts of that case, the court ruled that the hearing of the assessment proceedings should be held in private. But the court was also concerned with the issue of the waiver of privilege which would be necessary if a client wished to challenge the costs claim by a solicitor in respect of the work done. The privilege of course is the client’s, but the client cannot stop the solicitor making disclosure of the matters which have been disclosed to the solicitor in the course of any proceedings or when the client was seeking advice or in any other circumstance where professional privilege would arise.
- The court on assessment therefore can recognise the need for the disclosure of documents relating to the conduct of the proceedings the subject of the assessment. However, as the Dechert case shows, whilst there has been a waiver of privilege for the purposes of the assessment proceedings, that waiver is limited and temporary and extends only to the opposing party and to the judge. It does not matter whether the assessment is an inter partes assessment or one as between solicitor and client. Doubts have been expressed whether the introduction of the Civil Procedure Rules in 1999 made a difference to the position. That is firmly rejected by the Court of Appeal.
- One therefore goes on to ask, what happens if the client sues the solicitor for negligence or breach of confidence? Can the solicitors use the fact that privilege has been waived in a detailed assessment to ensure that they then can use all the material used in the previous proceedings or indeed in connection with advice as part of their defence to a claim for negligence? That contention was rejected by Lindsay J in National Westminster Bank Plc v Bonas  EWHC 1821 and that decision was clearly approved by the Court of Appeal in the Dechert case.
- So in a case where the client sues the solicitor for negligence, perhaps in connection with a previous personal injury case, how does one draw the line between what may be disclosed and what may not? How far does the privilege run? Does the client by suing his solicitor open the stable door and let the horse run free? The Court of Appeal considered the observations of Lord Bingham CJ in Paragon Finance Plc v Freshfields  1WLR 1183. Although it appeared at first sight that Lord Bingham was saying that a claim in these circumstances involved the waiver of privilege, Lord Pannick QC submitted and the Court of Appeal agreed that what he had made clear was the right of the client to claim the protection of legal professional privilege in relation to any communication between them was only waived so far as necessary for the just determination of his claim. The client releases the solicitor only to that extent from the obligation of confidence by which he was formerly bound. Accordingly, in a claim for negligence against a solicitor, the parties must be careful not to extend the disclosure beyond the issues which have been raised in relation to the claim for negligence. Furthermore, it seems to me clear that that disclosure must be for the purposes of that litigation. The client can still claim that for all other purposes the privilege is not waived and therefore remains his privilege, so that the details cannot be disclosed to third parties.
- In my opinion, therefore, the stable door of privilege can be closed before the horse bolts.