February 23 2010
A recent case examines the extent to which annotations made by legal counsel on documents furnished for the purpose of providing legal advice (or for litigation) attract legal professional privilege.(1)
The case concerned the interpretation and application of a disclosure order that had been negotiated and agreed between the parties to an ongoing commercial dispute. The defendants had agreed to provide the claimant with copies of documents relating to the litigation through their solicitors. The terms of the order included a specific exception for "material subject to the legal professional privilege"; such material was to be destroyed, deleted or delivered to the defendants' solicitors for retention in secure storage. There followed detailed provisions for the service of information, confirming the steps taken in satisfaction of the order.
The claimant applied for an 'unless' order against the defendants following their alleged failure to comply with the terms of the order on delivery of documents. In response, the defendants advanced a number of reasons for their failure to deliver the documents in question, including one relating to the application of legal professional privilege.
The defendants claimed that the hard-copy documents which counsel had returned to them attracted privilege because (i) they had originally been provided to counsel as part of their instructions, and (ii) counsel had marked and annotated the papers.
It was accepted that annotations by counsel (or an expert consulted by them) could be classified as subject to the privilege proviso. However, the claimant argued that the defendants had misunderstood the scope of legal professional privilege and the extent to which the proviso could exempt such documents from disclosure or delivery.
The judge confirmed the well-established principle that "pre-existing documents do not become privileged just because they are submitted to lawyers for the purposes of advice or litigation". He was satisfied that pre-existing documents should be returned to the claimant with annotations by counsel redacted. The judge took the opportunity to clarify when annotations or markings attract privilege.
The judge considered that mere underlining or highlighting in documents does not give rise to privilege. The appropriate test, derived from Lyell v Kennedy, is "whether or not the markings in question would 'give a clue' to the trend of advice being proffered to the clients by the lawyers".(2) He reasoned that:
"[there are] all sorts of reasons why solicitors or counsel might underline or highlight a document, and, save in very specific circumstances, one would not be able to draw any inference as to the trend of the advice being proffered."
The judge rejected the defendants' argument that because some of the pages had been annotated by counsel, it would be possible to infer that unannotated pages were considered insignificant, thereby giving a clue to the nature of the advice being given or the strategy being recommended. He considered that "an unmarked page cannot reveal anything to a reader apart from its contents".
For completeness, the judge examined the application of the selection doctrine, as developed by the Court of Appeal in Lyell v Kennedy. That case concerned the privilege afforded to certain extracts copied from public registers. It was accepted that the act of selecting such extracts could be taken to indicate the trend of legal advice. However, such circumstances did not arise on the facts in this case and the defendants were unable to rely on the doctrine. The documents in question were pre-existing documents - that is, they were not in the defendants' possession by virtue of an act or process of selection or rejection.
Litigators engaged in time-consuming and costly disclosure exercises will welcome the judge's clarification of the extent to which lawyers' markings will be protected by legal professional privilege. Following this clear and helpful exposition of the principles involved, the courts will not allow the cloak of privilege to be overstretched. The fact that a document has been received or reviewed by a lawyer does not suffice; rather, there must be a solid, substantive justification - relevant to the nature and substance of the legal advice and offering something akin to a clue - before pre-existing documents will be deemed to attract privilege.
Mere underlining and highlighting will not attract privilege - a significant consideration for lawyers and experts when reviewing documents provided by clients. Where annotations are at issue, the appropriate procedure (where possible) is for documents to be returned with the legal team's annotations redacted. Practitioners should also note the court's stern direction that the selection doctrine must be interpreted narrowly.
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