Legal Professional Privilege

It is very common for parties involved in construction projects to engage the services of claims consultants. A number of such claims consultants employ legally qualified personnel who in turn provide legal advice. A recent case involving one such firm of claims consultants serves to highlight the care that should be taken when engaging their services.

In the case of Walter Lilly & Company Limited v Charles Mackay and DMW Developments Limited, the Defendants engaged the Claimant to build a large house in the Boltons in London. A firm of claims consultants known as Knowles were engaged to provide “contractual and adjudication advice”. During the course of their engagement, Knowles provided legal advice via two individuals employed by them who once qualified as barristers.

The question in the case revolved around whether or not Knowles were engaged as solicitors or barristers and whether documents generated by or towards them, even though they retained legally qualified personnel, attracted legal professional privilege.

The Defendants’ acknowledged that Knowles were not qualified to provide legal advice but they argued that if they, in good faith, instructed an organisation which they mistakenly believed contained qualified solicitors or barristers and then received legal advice from them, they are entitled to legal advice privilege.

The Judge in this case held that Knowles were not retained as solicitors or barristers even if the individuals working within the organisation were barristers or solicitors. It is quite common for such firms of claims consultants to engage non-practising barristers but the reality in this situation was that the Defendants retained Knowles as an organisation to provide them with claims and project handling advice rather than legal advice. As a result, legal professional or legal advice privilege does not apply as between the Defendants and their claims consultants. All documentation of a legal nature generated by and passing between the Defendants and the claims consultants was fully disclosable.
This case highlights the care that needs to be taken when engaging organisations that are not firms of solicitors or barristers that provide legal advice. The same applies to situations where, for example, accountants are engaged and provide tax law advice in respect of proposed transactions.

The Judge in this case was at pains to point out that this decision related only to legal professional or legal advice privilege. It did not deal with litigation privilege and there remains an outstanding issue as to whether or not advice or other communications given by claims consultants in connection with adjudication proceedings are privileged. It will not be long before such a case appears before the Courts.

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