Legal privilege pitfalls: a lesson in how to avoid inadvertently waiving privilege

A Scottish case which was decided earlier this year, Bullough v the Royal Bank of Scotland PLC [2019] CSOH 24, provided some welcome clarity on the rules about waiver of legal professional privilege ("LPP").

In broad terms, LPP is a legal right to refuse the otherwise compulsory disclosure of information where that would reveal the content of legal advice between a solicitor and a client, or information or advice which has been prepared for the dominant purpose of conducting a litigation (for additional information on the criteria required to assert LPP, see our article "Confidence Restored: Internal Investigations and Legal Privilege" here).

What is waiver of legal professional privilege?

If you have waived LPP, you have given up the ability to resist disclosure of the information in question. LPP can be expressly waived or your waiver can be implied from the facts and circumstances of your case. Partial disclosure of legal advice (or even the gist of it) can be enough to waive LPP in the remainder.

If LPP has been waived, you could be compelled to disclose the information in various ways, including to a court, to a third party in a civil action or to a regulator in a regulatory investigation. But how can you tell whether your actions will amount to waiver when privileged and non-privileged information are contained in the same document?

What happened in this case?

In Bullough v RBS, the Pursuers, Mr and Mrs Bullough, raised a Court of Session action challenging the basis on which they had signed personal guarantees relating to RBS loans to their family business. Mr and Mrs Bullough's solicitor had been present at the signing of the guarantees and had taken a note of the proceedings, including confidential conversations which the solicitor had with Mr and Mrs Bullough. The note also contained a record of statements allegedly made by the Bulloughs' RBS Relationship Manager, which it appears were crucial to the Pursuers' claims.

In order to provide evidence of the Relationship Manager's statements, the Pursuers lodged the note taken by their solicitor, but redacted the sections noting the confidential conversations between the Bulloughs and their solicitor. On lodging the redacted note, the Pursuers explicitly stated that they were not waiving LPP in relation to the redacted sections.

One of those redacted sections recorded confidential legal advice on the personal guarantee, which was given to Mrs Bullough immediately prior to her signing the guarantee. The defenders claimed that this redacted section of the note could not be protected from disclosure using legal advice privilege, as that privilege had been waived by the pursuers when they produced the note in court and made averments about the advice.

What did the Court decide, and what are the key lessons from this case?

In upholding the Pursuer's claim to LPP over the redacted sections, the Court summarised the existing caselaw and confirmed some useful rules relating to waiver of LPP, as follows:

• Take care - it is possible to impliedly waive LPP, even where you specifically state that you are not waiving LPP.
• Whether or not you have impliedly waived LPP is not based entirely on what you intended but on an objective analysis of the whole circumstances, including your own conduct. Relevant circumstances include:
  • Whether the person expressly asserted LPP at the time of disclosure.
  • Whether the privileged information is distinct and severable from other information being disclosed in the same document.

In this case the Court found that the privileged information in the solicitor's attendance note was distinct and severable from the parts of the note that had been disclosed, and therefore LPP had not been waived. Whereas the defenders argued that the single subject matter of the note was the circumstances in which the personal guarantee had been signed, the Court held that the attendance note dealt with three separate subject matters: (i) what was said and done at the meeting in the presence of all attendees (not privileged); (ii) a note of the fact that confidential legal advice was given (not privileged); and (iii) a note of the contents of that legal advice (privileged).

• Whether in all the circumstances a person's conduct has been inconsistent with maintaining LPP, such that it would be unfair if LPP were to be upheld.

In this case the defenders argued that disclosing only part of the circumstances in which the guarantee was signed would be unfair. However, the Court considered that the note dealt with matters which were clearly distinct and severable and, as the pursuers were not relying on the legal advice in any arguments before the Court, unfairness was not an issue. If the disclosed information had not been distinct and severable from the connected privileged information, the disclosure could have meant that LPP was waived in the whole of the information due to the rule against "cherry-picking" (i.e. LPP will be waived where legal advice is deployed in a selective manner, as this could otherwise allow a party to disclose only samples of information that could be misleading if not viewed in their full context).

• Whether the person has elsewhere disclosed the contents, or even just the gist, of the legal advice over which LPP is being asserted.

In this case the Court held that disclosing the fact that the pursuers' solicitor had explained the guarantee to Mrs Bullough was not the same as disclosing the advice given by the solicitor. In other words, disclosing the existence of legal advice does not waive LPP over the contents of that advice.

• The purpose behind a waiver is important, and can limit the scope of any waiver. A party can therefore waive the right to rely on LPP in a particular context only, and still refuse to disclose (or allow someone else to rely on) the privileged information in another context. The extent of any waiver is decided by objective analysis of the circumstances surrounding the disclosure. For example, disclosing privileged information to a regulator for the limited purposes of a criminal or civil investigation does not necessarily mean that LPP could not then be relied upon to resist disclosure of the same information to an opposing party in a civil dispute.

Although the Bullough case mainly centred on potential waiver arising from the deployment of privileged information in court proceedings, it is important to note that conduct outside of court proceedings can also result in LPP being waived, or indeed lost altogether; for example, by summarising the terms of legal advice in a public statement. You must therefore exercise care in how you deal with privileged information in all circumstances.

Assessing whether information is privileged and what types of conduct might inadvertently waive that privilege is a difficult exercise. If you would like advice on legal professional privilege or how to build procedures within your organisation to protect it, please contact Charles Livingstone, Paul Marshall or your usual Brodies contact.