In-house Lawyers and Client Privilege

In the last year or so, a series of first instance English judgments have considered the application of legal advice privilege to communications to or from “in-house” lawyers within a corporate entity. These cases apply established legal principles, albeit to a different and sometimes more complicated context compared with that of communications between a client and a lawyer in private practice.

In Hong Kong, legal advice privilege extends to communications to or from in-house lawyers within a corporate entity, provided they are for the dominant or sole purpose of giving or receiving legal advice. This is likely to become an increasingly topical issue in Hong Kong, where approximately a quarter of solicitors with practising certificates do not work in private practice; a trend that is likely to increase over the longer term – reflecting a greater variety of employment opportunities available to solicitors today than in the past.

As things stand, there is no requirement for an in-house lawyer to have a practising certificate in order for their communications to attract legal advice privilege*. The in-house lawyer could be a foreign lawyer. That stated, in this context, a practising certificate helps give an in-house lawyer an appearance of more independence, which is likely to assist in asserting that they are acting in their professional capacity as a lawyer.

In order for a communication with an in-house lawyer to attract legal advice privilege the crucial thing is that the request for legal advice or the giving of legal advice must arise in the context of an in-house lawyer’s capacity as (for example) a “professional lawyer”, a “qualified lawyer” or a “member of the profession”. The dominant or sole purpose of the communication must also be for the giving or receiving of legal advice. “Legal advice” is interpreted widely but excludes commercial or business advice (not given in a legal context) or advice on management affairs.

In-house lawyers should have the following in mind (for example) in order to assist with claims to legal advice privilege:

  • protect the confidentiality of their communications by limiting the dissemination of legal advice, have protocols in place for such dissemination and adhere to them;
  • take care with regard to emails that disseminate legal advice – in particular, with “Reply All”;
  • separate legal advice from commercial or management advice. There can only be one “dominant purpose”;
  • label communications appropriately; for example, “Privileged & Confidential”, “Addressees Only”, “Co-Attorney Privileged”. Labels assist but substance trumps form;
  • consider who the client is within a corporate organisation;
  • be careful how legal advice is disseminated with respect to cross-border matters (where foreign laws may apply); in particular, with respect to matters such as partial waiver of privilege or EU competition (antitrust) investigations; and
  • ensure that they are involved at the outset as soon as legal advice is required within a corporate entity. If needs be, in-house lawyers should obtain the assistance of a lawyer in private practice from the outset.

The lead case law on point includes: Re Alfred Crompton Amusement Machines Ltd [1972] 2 Q.B. 102 (Court of Appeal, England and Wales – Lord Denning M.R.), Re Prudential Plc [2013] UKSC 1 (Lord Neuberger, leading the majority) and Re Citic Pacific (No. 2) [2015] 4 HKLRD 20 (a landmark judgment of the Court of Appeal in respect of legal professional privilege and, in particular, legal advice privilege in Hong Kong: see – “In-house Lawyers and Legal Advice Privilege”, Industry Insights, March 2016).

*Editorial Note: Note Practice Direction N (“Employed Solicitors”) – Paragraph 5 (summary only): An employed solicitor who acts as a solicitor for his or her employer, or a related body of his or her employer, in litigation or a conveyancing transaction, must have a current unconditional practising certificate or be supervised by a solicitor holding such a practising certificate.

Jurisdictions: 

Senior Consultant, RPC