In what circumstances will a party waive privilege over legal advice by referring to it in evidence?
Reference to the fact of the advice may not be sufficient but reliance upon that advice is likely to be. Also, a limited waiver of privilege over certain documents did not mean that those documents were irrelevant from a privilege point of view thereafter and that their subsequent deployment could not result in collateral waiver. These issues are explored in PCP Capital Partners v Barclays Bank.(1)
Barclays Bank PLC needed to raise at least £6.5 billion in funding back in 2008; PCP Capital Partners LLP agreed to contribute £3.25 billion. A disagreement followed as PCP alleges that Barclays had represented at the time that PCP would receive “the same deal” as the state of Qatar, which also invested. PCP brought a High Court claim challenging the advisory services agreements entered into by Barclays and the Qataris. PCP is claiming losses of up to £1.6 billion.
Meanwhile, in 2016 during a set of criminal proceedings brought by the Serious Fraud Office (SFO) against Barclays and four of its former executives, Barclays provided certain privileged documents to the SFO under what was described as a “limited waiver of privilege”. Some of these documents were referred to in open court and were provided to PCP in these proceedings.
PCP clearly believed that it had an incomplete picture of the circumstances around the advisory agreements and in May 2020, it applied to the High Court for disclosure of documents that Barclays were withholding on the grounds of privilege, no doubt in the expectation that they might shed further light. The backbone of their claim was that Barclays had waived privilege over these documents by referring in witness statements to relevant legal advice obtained and therefore all the otherwise privileged documents relating to the advisory services agreements should be disclosed.
How did Barclays resist the application?
Barclays relied on four grounds:
- There had been no waiver of privilege;
- Even if there had been, the references only related to the documents previously provided to and deployed by the SFO; and PCP already possessed these documents. Once SFO deployed these documents in open court, these documents were no longer privileged documents so to deploy them in these High Court proceedings could not amount to a further waiver.
- The scope of the documents sought was too wide.
- The order sought by PCP was disproportionate and unduly burdensome on Barclays as trial was due to begin in a week.
The Court rejected Barclays’ submissions and made the disclosure order sought by PCP.
What amounts to waiver of privilege?
A succinct and clear definition of when a waiver arises is not easy to find. However, the judge noted that at its core was the following:
- A sufficient reference to the legal advice; and
- the waiving party must be relying on that reference to support their case.
When is meant by “reliance”?
A mention of giving of legal advice would not constitute a waiver because that alone does not amount to reliance. Contrast “My solicitor gave me detailed advice. The following day I entered into the contract”, with “I entered into the contract as a result of that legal advice”. The difference between the two statements being that the former does not express reliance on the advice whilst the latter does.
Distinction between “effect” and “contents” of advice
Prior case law had drawn a distinction between the “effect” of the legal and its “contents”; the judge noted that there was no mechanical way to apply this distinction.
Detailed references in Barclays’ witness statements to the involvement of lawyers and to taking comfort from their advice amounted to more than simply referring to the fact of the advice. Despite acknowledging that the references were to the effect rather than the contents of advice, he determined that they amounted to waivers of privilege when the aforementioned factors were applied in context; the witnesses were relying on the advice to improve Barclays’ case on the issues surrounding the advisory service agreements.
Collateral waiver and reliance on once-privileged documents
Barclays submitted that all of the references to legal advice concern the once-privileged documents which have already been disclosed to PCP on the basis that the SFO referred to those documents in open court; Barclays argued that deploying those documents in the High Court proceedings cannot therefore lead to any collateral waiver, as those documents were no longer privileged. The judge rejected this submission, stating that it cannot be the case that a once-privileged document which has lost that status because it has been deployed on one occasion becomes irrelevant from a privilege point of view thereafter and for all purposes, because that would allow a party to avoid the consequences of any waiver by intentionally making open the documents to which that waiver relates.
The judge also rejected Barclays’ factual submissions on this issue, finding that: 1) Barclays was involved in the deployment of the once-privileged documents and therefore, it could not argue that it was the SFO and not Barclays that deployed those documents; and 2) disclosure of those documents could not be withheld on the basis that the SFO had sight of all the privileged documents and would have deployed in the criminal proceedings any other adverse documents if such documents existed – PCP should not be bound by the actions of the SFO.
Was it necessary to explore each individual reference?
Barclays had asked the judge to consider each individual reference to legal advice which was deemed a waiver in order to determine the particular transaction to which it related. The judge decided this was unnecessary as the truth was that Barclays was relying on all the references to legal advice (to make its point that the advisory services agreements were lawful) and it would not be possible to question the witnesses about their belief that their legal advisors approved all of the transactions without full disclosure of all of the legal advice. Legal advice was not produced in a vacuum and it would have been based on the entirety of the instructions received.
Additional disclosure and proportionality
The judge dismissed Barclays’ argument on proportionality on the basis that the additional disclosure exercise would be very modest in proportion to the value of the case. Barclays’ argument that the disclosure request was made too close to trial was also rejected on the grounds that it could not have been brought until witness statements were filed and that the documents to be provided would only be needed for cross-examination of witnesses which was weeks away.
The key question in determining if privilege has been lost is whether there has been any reliance on legal advice, irrespective of whether it is on the contents or merely the effect or conclusion of that advice. Therefore, any reference to legal advice could lead to privilege being lost over swathes of legal advice, even where the reference does not betray the content of any advice. For example, in this case, the witnesses’ reference to taking comfort in legal advice was considered to be a waiver of privilege even though there was no reference to the contents of the legal advice.
Therefore, parties should take great care when drafting statements to ensure that references to legal advice are only included if absolutely essential and where the risks of privilege being waived over the entirety of the legal advice has been carefully assessed.