Alert: Privilege – Important Judgment for Corporate Clients

Smyth & Co in association with RPC

Citic Pacific Ltd v Secretary for Justice, CACV No. 7 of 2012, 29 June 2015 is an important judgment in which the Hong Kong Court of Appeal considered (among other things) the ambit of legal advice privilege insofar as internal communications between a company's employees are concerned (para. 28 of the judgment). Such communications can attract legal advice privilege where they are created for the sole or dominant purpose of obtaining legal advice.

The Court of Appeal disagreed with the English Court of Appeal judgment in Three Rivers District Council & Ors (No. 5) [2003] Q.B. 1556, which took a restrictive approach to the meaning of corporate client in this context; namely, restricting legal advice privilege to communications by employees directly tasked with instructing a company's external lawyers.

The "dominant purpose" test focuses more on the substance and context of a communication in determining whether it attracts legal advice privilege. While legal advice privilege does not protect a client's raw data or material generated during the course of a "transaction or event" (paras. 42 and 52 of the judgment), it can protect documents prepared by employees where the sole or dominant purpose of their production is to obtain legal advice.

The judgment of the Court of Appeal in Citic Pacific is required reading for all practitioners. It should be of considerable interest to in-house lawyers in Hong Kong when acting in their capacity as legal advisers within a corporation.



* Editorial Note - Watch out for more on this subject in forthcoming "Industry Insights" and "Features".