Dispute resolution: No Legal advice privilege for claims consultants.
Walter Lilly & Company Ltd v Mackay & Anor [2012] EWHC 649 (TCC)
The Claimant was employed by the second Defendant to construct a large house in London. Delay to the works caused the future property owners to instruct a claims consultant to provide “contractual and adjudication advice” to assist DMW. The Claimant issued proceedings.
As part of disclosure, disagreement arose between the parties as to whether the documents created by Knowles or its correspondence with the Defendants attracted legal professional privilege. In defending an application by the Claimant for all correspondence and documents created by Knowles relevant to the issues in the proceedings, the Defendants argued that the advice received from Knowles was both legal in nature and from people who held themselves out to be lawyers and as such was subject to legal professional or advice privilege.
The Court held that Knowles had not been retained as solicitors or barristers but as an organisation providing claims advice.
- Knowles were claims consultants and did not hold itself as a practice of solicitors or barristers.
- It was retained to provide “contractual and adjudication advice” not to provide legal advice.
- No rates were offered for solicitors or barristers.
- The retainer made it clear that a separate appointment of solicitors could be made.
- It was immaterial that Mr Mackay honestly thought that the two individuals were barristers as their employer was not retained to provide the service of barristers or solicitors.
The Defendants were ordered to disclose the Knowles documents.
Akenhead J. concluded that the decision only related to legal professional privilege or legal advice privilege and not litigation privilege and therefore an outstanding issue remained as to whether advice given by claim consultants in adjudication proceedings are privileged.
Litigation privilege only exists where the dominant purpose of the communication is made either for the purpose of obtaining or giving advice, or to aid in the conduct of the litigation. For these purposes, the litigation must have already commenced or a real likelihood of litigation at the time the communication is made.
Anybody instructing Claims consultants need to be very aware that communications between them are unlikely to be privileged from disclosure unless created in anticipation of proposed litigation.
A solution may be for advice given by the claims consultant to come from solicitors or barristers thereby ensuring that this type of communication remains privileged.
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