Sarah Rees and Natalie Powers of Blake Morgan look at the findings of Moulder J in a recent application in PJSC Tatneft v Bogolyubov and others  EWHC 2437 (Comm).
In the recent case of PJSC Tatneft v Bogolyubov & others , the High Court has confirmed that legal advice privilege under English law extends to foreign lawyers working “in-house”, provided they were “acting in the capacity or function of a lawyer”.
The judgment comes in the run up to trial of a long-standing dispute between PJSC Tatneft (“Tatneft”), an oil company incorporated in the Russian Federation, and four individuals arising out of their alleged involvement in a fraudulent scheme. Tatneft had given standard disclosure and had asserted that certain communications with its employees, officers and members of its in-house legal department in Russia, were subject to legal advice privilege and were therefore withheld from inspection. Tatneft confirmed that its in-house advisers were qualified in Russian law and were entitled to practice law in Russia, but did not have the status of an “Advocate”.
The Second Defendant (Igor Komoloisky) made a standalone application for the disclosure of communications between Tatneft and its in-house Russian legal advisors on the basis that, as a matter of English law, legal advice privilege only applies to (1) “professional lawyers”, who are professionally qualified and a member of a professional body; (2) in-house lawyers that have been admitted to practice and are regulated; and (3) foreign lawyers if they are “appropriately qualified”.
Mr Komoloisky submitted that in-house lawyers in Russia were not members of the Russian Bar and their activity did not fall under the Russian regulations for Advocates. Further, in terms of Russian law, the concept of “Advocate’s secrecy”, which is the closest equivalent to legal advice privilege, does not apply to lawyers who are not Advocates. Tatneft contended that, as a matter of English law, legal advice privilege attaches to advice obtained from foreign lawyers, and that includes in-house lawyers. The Russian law of “Advocate’s secrecy” and the standards of regulation or training applying to Russian lawyers were therefore irrelevant.
Mrs Justice Moulder dismissed the application and held that legal advice privilege extends to communications with foreign lawyers, whether or not they are “in-house”, provided they are acting in the capacity or function of a lawyer. The court acknowledged that the seeking and giving of legal advice is in the public interest, and therefore it was “necessary” that communications between clients and their lawyers should be secure from the scrutiny of others.
Moulder J highlighted that legal advice privilege was extended to foreign lawyers in R (Prudential plc and another) v Special Commissioner of Income Tax , on grounds of “fairness, comity and convenience”. Further, it was not the “status” of a foreign lawyer which is relevant when determining the application of a legal advice privilege, but the “function” of the relationship, and there was no requirement under English law for the courts to enquire into how or why the foreign lawyer is regulated or registered, nor what standards apply to the foreign lawyer. The court further determined that there was no additional requirement for foreign lawyers to be “appropriately qualified” or recognised or regulated as “professional lawyers”.
The effect of the decision
The decision confirms that the English courts will take a pragmatic approach when determining the application of legal advice privilege, and will adequately protect communications between a client and its foreign legal advisers, irrespective of whether they are in-house or external. This should come as welcome reassurance to litigants who are involved in proceedings in front of the English courts seeking legal advice from international lawyers, who may ordinarily be subject to stricter local laws on privilege.
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