The ultimate beneficiaries of the Court of Appeal’s landmark judgment in Citic Pacific Ltd v Secretary for Justice (No. 2)  4 HKLRD 20 are corporations and their in-house lawyers. While the judgment should not be taken for granted and the proper parameters of legal advice privilege should be respected, one could be forgiven for thinking that the outcome in Citic Pacific (No. 2) is something of a “corporate charter” for legal advice privilege.
This is important in Hong Kong, where approximately 25 percent of locally qualified solicitors holding practising certificates are not in private practice; most of them are likely to be working in industry and commerce*.
For the purposes of Hong Kong common law, corporations and their in-house lawyers no longer need to worry about a narrow meaning of “client” when determining whether a communication attracts legal advice privilege. Citic Pacific (No. 2) disapproves of the application of a restrictive meaning of client in this context – it confirms that the client is simply the corporation and it can obtain legal advice through those employees authorised to act for it in the process of obtaining legal advice. More importantly, that “process” includes confidential internal communications created within a corporation provided they are created for the dominant (or sole) purpose of obtaining legal advice.
Citic Pacific (No. 2) particularly assists in-house lawyers because it recognises that legal advice privilege extends to confidential documents created as part of the process of gathering information within a corporation in order to obtain legal advice (whether internally or externally).
“Legal advice” in this context has a wide meaning. Following Citic Pacific (No. 2), the “dominant purpose” test is (for now) paramount.
In-house lawyers are unlikely to change the manner in which they instruct external legal advisers as a result of Citic Pacific (No. 2). They will still seek to give instructions and obtain legal advice in accordance with internal protocols that aim to ensure that confidentiality is preserved. Those protocols (and the good practices that follow) should provide for the flow of instructions and legal advice within a corporate entity.
Legal advice privilege extends to confidential internal communications with in-house lawyers, provided the in-house lawyer is:
- professionally qualified;
- being asked to give legal advice (as properly understood); and
- clear as to who his or her “client(s)” is/are with respect to the different matters they handle.
Provided in-house lawyers working in Hong Kong are professionally qualified as lawyers and are acting as such, legal advice privilege should apply to their confidential communications within the corporation(s) in respect of which they are employed.
With respect to matters involving other jurisdictions, in-house lawyers (like their colleagues in private practice) need to be aware that foreign laws may differ in significant or subtle respects as regards legal advice privilege.
In-house lawyers should also strive to maintain the indicia associated with being an independent professional; for example, membership of their professional body, a current practising certificate, continuing professional training and development and the like.
* See Hong Kong Lawyer column – “From the Secretariat (Monthly Statistics on the Profession)”. Such members are shown in “The Law List” as – “Holding Current Practising Certificate / Solicitor Not in Private Practice in Hong Kong”.