Edward Freeman of Clyde & Co points out that a recent case has highlighted that clients and their advisers need to give serious consideration as to how and by whom advice is given in adjudications and other forms of ADR.
The legal market that we are in produces the situation that whilst pretending to be qualified to act as a solicitor or barrister when not so qualified is a criminal offence, anyone can provide ‘advice’ in respect of contracts or claims, even if that involves consideration of the law.
A recent case has highlighted that such advice may involve a key (and often initially overlooked) difference depending on its source, with real implications for adjudication and other forms of ‘quasi judicial’ ADR. Any sensible adviser will impress upon a client early on that documents damaging to its case need to be disclosed to the other side in a dispute. Th e only real exception to this is where documents can be brought within the remit of ‘privilege’ whether (i) without prejudice privilege; or (ii) litigation privilege; or (iii) legal advice privilege, and it is the latter that the case in question primarily concerns.
The second defendant in the case appointed a wellknown firm of claims consultants to advise in relation to works being carried out by the claimant contractor, which were significantly delayed and subject to claims for loss and expense. The property was to be occupied by the second defendant (ironically a barrister) who appears to have acted on behalf of the first defendant in engaging the claims consultants. He gave evidence that both of his principal contacts at the consultancy ‘are understood to be qualified, practising, barristers or solicitors’ and that the advice received was ‘legal in nature’ and from ‘people who held themselves out to be Lawyers’.
The defendants thereby claimed that their correspondence with the claims consultants was subject to legal advice privilege. Akenhead J disagreed, referring to prior cases which emphasised that ‘privilege should be strictly confined to legal advisers such as solicitors and counsel, who are professionally qualified’ and describing a previous judgment to the contrary as an ‘exceptional case’. He examined the terms of the engagement was and concluded that the consultancy was retained ‘not as barristers but as an organisation to provide … claims and project handling advice’ and that they ‘were not retained to provide legal advice as such’. ‘In this respect’, he said of the defendants ‘their position is no different from the claimants in the Prudential v Special Comr of Income Tax case who employed accountants’.
Consequently, disclosure of the documents was ordered. The obvious question remains whether a claim for litigation privilege might be successful to protect the claims’ consultants’ correspondence, but the judgment clearly states that this issue was not dealt with. Perhaps most significantly, however, the judge stated:
‘that there remains an outstanding possible issue as to whether or not advice and other communications given by claims consultants in connection with adjudication are privileged … There is little authority on this latter issue and consideration might have to be given to issues of policy if and when this argument arises on another case.’
Given such ambiguity, those giving advice, other than solicitors and barristers practising as such, will need to give serious thought as to whether and when to involve solicitors or barristers. The terms of engagement in this case envisaged that the need to appoint solicitors or barristers might arise. Consultants are now on notice that not to advise the client of this might well be a breach of duty. In the meantime, expect some serious lobbying.