Legal Advice Privilege provides confidentiality of communications between lawyers and clients.
Whether it extends to Claims Consultants was considered in the case of Walter Lilley & Co Ltd v (1) DMW Developments (2) Mackay.
Mr Mackay, a director of DMW, procured the construction of a substantial house for him and his wife to live in. DMW engaged WL&Co as the contractor and also engaged an architect/contract administrator and a QS.
WL&Co made various applications for EOTs, and Mr Mackay became concerned with the architect’s performance. He therefore retained Knowles to provide “contractual and adjudication advice”.
In the ensuing litigation DMW disclosed some of the Knowles correspondence, but later claimed that it was privileged and should be returned. WL&Co argued it was not privileged. DMW then disclosed further Knowles documents but maintained privilege over the balance on the basis that Knowles had been retained to provide legal advice which had been provided by 2 legally qualified individuals.
The Court held that Knowles had not been retained as solicitors or barristers but as an organisation providing claims advice. The decision was made on the basis that:
• Knowles did not hold itself as a practice of solicitors of barristers
• It was retained to provide “contractual and adjudication advice”
• No rates were provided for solicitors of barristers
• The retainer provided a mechanism for the separate appointment of solicitors
• It was immaterial that Mr Mackay honestly thought that the 2 individuals were qualified barristers
Legal Advice Privilege therefore did not apply and DMW/Mr Mackay was ordered to disclose the balance of the Knowles documents.
COMMENT: This judgment is a word of warning to clients and claims consultants alike as correspondence and advice passing between them will not be privileged and may have to be disclosed. Interestingly the Judge did not deal with the issue of litigation privilege (which extends to documents passing between clients, lawyers and third parties for the purposes of or in contemplation of litigation) or whether privilege would extend to claims consultants specifically engaged on adjudication business.
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