High Court finds no need to enquire into qualifications of foreign lawyer in applying English law privilege

In a judgment handed down last Friday, 11 September, the Commercial Court in London confirmed that communications with the claimant's Russian in-house lawyers were privileged as a matter of English law, and there was no need for the court to enquire into the applicable systems of regulation or professional standards under Russian law: PJSC Tatneft v Bogolyubov and others [2020] EWHC 2437 (Comm).

It has long been established that legal advice privilege under English law applies to advice from foreign lawyers, as well as English solicitors and barristers, so that such advice does not have to be disclosed in litigation before the English courts. What has been less clear to date, however, is whether there is any particular local standard of qualification or professional regulation a foreign lawyer must meet, such as admission to a local Bar, in order for their advice to benefit from the protection of privilege. The issue has been particularly acute for foreign in-house lawyers in jurisdictions where they cannot be members of the local Bar, as well as for lawyers working in private practice in jurisdictions where admission to the local Bar is not a prerequisite for legal practice.

The present decision helpfully confirms that advice from foreign lawyers, including foreign in-house lawyers, will be privileged as matter of English law, so long as the lawyer is acting in their professional capacity in connection with the provision of legal advice and irrespective of whether they are admitted to a local Bar or otherwise licenced.

Background

The dispute arose from a Russian law governed claim brought by PJSC Tatneft, one of the largest Russian oil companies, against four high-net worth Ukrainian businessmen for their alleged involvement in a fraudulent scheme.

Mr Igor Kolomoisky, the second defendant, challenged the claimant’s claim to legal advice privilege over communications between its officers or employees and members of its in-house legal department.

The individuals concerned were Russian lawyers, but they were not “Advocates” and the concept of “advocates’ secrecy” (which is the closest equivalent to legal professional privilege under Russian law) did not apply to them.

It is worth noting that it is not necessary to have a status of “Advocate” (ie be admitted to one of the Russian bar associations) to practice law in Russia. Anyone with a Russian law degree may appear in Russian courts on civil, commercial and administrative matters, or work as an in-house counsel or in a law firm under an employment contract. For some Russian civil courts of first instance (magistrate’s and district courts) even a law degree is not required to represent a client.

Decision

The Commercial Court (Moulder J) upheld the claim to legal advice privilege.

It was common ground between the parties that it was for the claimant to justify its claim to privilege, and that the question of whether the documents could be withheld on grounds of privilege was a matter to be determined under English law (and not Russian law), since the English courts treat questions of privilege as falling within the law of the forum ("lex fori").

Moulder J said the starting point for consideration of the issue was the rationale for legal advice privilege, namely that it is in the public interest that clients can obtain confidential legal advice. The extension of privilege to foreign lawyers is consistent with that rationale.

She rejected the defendants' submission that privilege extends only to foreign lawyers who are "appropriately qualified" in the sense of being regulated and admitted to practice in the relevant jurisdiction. She referred to Lord Neuberger's comments in R (on the application of Prudential plc and another) v Special Commissioner of Income Tax [2013] UKSC 1, in which he accepted that the courts had not had regard to national standards or regulations as a precondition to the recognition of privilege for foreign lawyers.

Although in Prudential, so far as lawyers in England and Wales are concerned, the Supreme Court limited legal advice privilege to "members of the legal profession", ie barristers and solicitors rather than other professionals, the judgments acknowledge and endorse the broader approach the courts have taken to foreign lawyers. Moulder J rejected the argument that this broader approach is "uncertain" in that it would be "self-defining" and lead to a "two tier" system. In her view, it would lead to uncertainty if the court had to examine particular national standards or regulations in order to determine whether, in a particular case, a party was protected from the disclosure of his communications with his lawyer. It would also raise issues of comity if the court were obliged to express views on the qualifications and regulation of foreign lawyers.

The judge noted that the consequences of the defendants' approach would be to exclude all in-house lawyers and a large proportion of other lawyers working in Russia from the protection of privilege under English law. She commented:

"In my view this would be unfair and inconvenient and illustrates why the courts have not been interested in the foreign lawyer's training or discipline ... and have taken the view that legal advice privilege extends to communications with all foreign lawyers regardless of their 'particular national standards, regulations or rules with regard to privilege'..."

The judge rejected the defendants' further submission that, regardless of the position for other foreign lawyers, privilege should not extend to foreign in-house lawyers. She said that, once it is accepted that the court will not investigate whether a foreign lawyer is regulated or registered, the inclusion of foreign in-house lawyers follows as a matter of logic and principle.

She concluded that legal advice privilege extends to communications with foreign lawyers, whether or not they are "in-house", and the court will not enquire into how or why the foreign lawyer is regulated or what standards apply to the foreign lawyer under the local law. The only requirement is that they should be acting in their professional capacity in connection with the provision of legal advice.

Comparison to US position

It is noteworthy that, while the US courts generally extend the concept of attorney-client privilege to foreign lawyers, the approach remains inconsistent as to whether or not communications with foreign lawyers not benefiting from privilege under local law are covered.

For instance, in Renfield Corp v E Remy Martin & Co SA, 98 F.R.D. 442, 444 (D. Del. 1982) the Delaware District Court applied the privilege under US law to French in-house counsel (though not members of a local Bar) because they were the “functional” equivalent of US lawyers, as they were competent to render legal advice and permitted by law to exercise such activities.

However, in Louis Vuitton Malletier v Dooney & Bourke, No 04 Civ 5316 (RMB)(MHD), 2006 WL 3476735, at *17-18 (S.D.N.Y. Nov. 30, 2006) the SDNY District Court ruled that communications with foreign in-house counsel are only privileged where the parties have a reasonable expectation of confidentiality under the foreign privilege laws. It refused to follow Renfield, concluding that no privilege could be invoked since French law did not provide privilege for French in-house counsel.