Privilege

In the previous column, “Without prejudice”, we considered the purpose and effect of the “without prejudice” rule. This is sometimes referred to as “without prejudice privilege”. In this column, we will look at the type of privilege that is referred to as “legal professional privilege” and explore these questions:

• How does legal professional privilege operate in common law jurisdictions?
• Is legal professional privilege recognised in China?

Let’s start by considering the terminology used in English and Chinese. In English, a privilege is a right or immunity that often arises as a result of a special position, or special circumstances. It derives from the Latin word privilegium, which refers to a special law or a private law.

The Chinese word tequan means “special right” and matches the definition of the English word.

Legal professional privilege in common law jurisdictions

In common law jurisdictions, legal professional privilege – or attorney-client privilege, as it is called in the US – refers to the right of a client to prevent the disclosure of legal advice and legal communications, whether in the context of legal proceedings or otherwise, except where disclosure is required by statute.

The concept is based on public policy; namely, the need to ensure that the confidentiality of legal advice is maintained, and to achieve full and frank communication between a lawyer and a client (see the US case of Upjohn v United States (1981)).

Because legal privilege depends on confidentiality, it follows that it becomes ineffective if confidentiality is lost. There are several important principles that underpin the concept of legal professional privilege in common law jurisdictions. First, in order to claim privilege over legal advice or legal communications, the dominant purpose must be the obtaining of advice and assistance in relation to legal rights and obligations (see the English case of Three Rivers District Council v Governor and Company of Bank of England (No. 6) 2004).

Second, the concept does not extend to communications between a client and non-lawyers (e.g. accountants and tax advisers), except where the communications are made for the dominant purpose of adversarial proceedings such as court proceedings (known as “litigation privilege”). The question of whether this dominant purpose is satisfied is sometimes unclear in circumstances involving non-court proceedings such as regulatory investigations (e.g. merger investigations).

Third, in common law jurisdictions legal professional privilege extends to communications with in-house counsel only when they are acting in a legal capacity.

As privilege may be lost if legal advice is mixed with business and other advice, it is important for companies and other organisations to take care when communicating with general counsel and other in-house lawyers.

For example, it is commonly recommended that in-house counsel be included as addressees in email communication to make it clear that the communication is addressed to in-house counsel. In addition, the communication should state expressly that it is for the purpose of obtaining legal advice.

A former partner of Linklaters Shanghai, Andrew Godwin teaches law at Melbourne Law School in Australia, where he is an associate director of its Asian Law Centre. Andrew’s new book is a compilation of China Business Law Journal’s popular Lexicon series, entitled China Lexicon: Defining and translating legal terms. The book is published by Vantage Asia and available at law.asia.