Three Rivers (No 5): Time for reconsideration?

Much ink has
been spilled by commentators
over the years analysing the controversial decision of the Court of Appeal in Three Rivers District Council v the Bank of England (No 5) [2003] EWCA Civ 474 and its narrow view as to who constituted the 'client' for the purposes of legal advice privilege.

In the context of a company, which can only act through its agents, the decision came as an unpleasant surprise.

Considerable debate followed as to whether companies should, at the outset, define which employees were to be regarded as the 'client' for legal advice privilege purposes, and how wide a group could be included without a court subsequently denouncing the extent of the group as artificial. Many people predicted that the decision would not survive scrutiny by the House of Lords.

They were mistaken. Despite the lack of enthusiasm for the decision displayed in Three
Rivers (No 6) [2004] UKHL 48,
Lord Carswell in particular, the decision remains good law
in England and Wales and has never been revisited. Nor did
the predicted corporate Armageddon occur. However, in other common law jurisdictions, notably in Australia and Singapore, its reasoning was rejected. This division between common law jurisdictions has been intensified by the recent decision of the Court of Appeal in Hong Kong in Citic Pacific Limited v Secretary for Justice and Commissioner of Police (CACV7/2012).

In that case, in the first instance, Mr Justice Wright
had followed and applied the decision in Three Rivers (No 5).
In the context of the facts in Citic, he restricted the 'client' to the group's legal department (consisting of two employees) and the board of directors. Accordingly, communications
to the legal department by employees were not protected by legal advice privilege, even
if the dominant purpose of
the communication was the obtaining of legal advice. These employees were to be regarded as third parties and so those communications fell outside the scope of legal advice privilege.

On appeal, the Hong Kong Court of Appeal decisively rejected this narrow view of what constituted the client. They regarded it as inconsistent with the accepted rationale for legal professional privilege as a necessary incident of the rule of law. It was meaningless to have a right to confidential legal advice if relevant facts on which the advice was based were not too protected by privilege.

Accordingly, the client was
the corporation (Citic), and
the real question was which employees were to be regarded as authorised to act for it in the process of obtaining legal advice. They followed the dominant purpose test for the privilege enunciated by Mr Justice Tomlinson in Three Rivers No (5) at first instance.

This decision, and its rationale, plainly suggests that the time may be ripe for reconsideration of Three Rivers (No 5) by the Supreme Court. SJ

Collingwood Thompson QC is head of chambers at 7BR. He was instructed by Citic Pacific in Citic Pacific Ltd v Secretary for Justice and Commissioner of Police (CACV7/2012)