Advice From Claims Consultants Is Not Privileged

Parties involved in construction and engineering disputes, particularly contractors and subcontractors, are often advised and represented by claims consultants. There are many businesses operating in the UK and throughout the world who provide claims consulting services. Some people in these businesses are practising lawyers (solicitors or barristers), but many are not. They may provide legal or commercial advice, but will not usually do so in the capacity of a solicitor or barrister.

The capacity in which a claims consultant acts is significant insofar as legal privilege is concerned. Privileged communications are those between a solicitor or barrister and his or her client. The effect of a communication being privileged is that it does not have to be disclosed to an opponent or to the court (or tribunal). This may be critically important to the success of a party's case, because if the legal advice it receives is capable of being disclosed and used in court, its opponent may be able to weaken that party's case if the advice reveals perceived weaknesses in its legal position, or it gives away that party's strategy and objectives.

In a TCC judgment delivered yesterday, the court held that communications between a contractor and its claims consultant were not privileged. The communications in question concerned legal and commercial advice relating to a dispute over an extension of time / loss and expense claim for a project in London.

Commercial Implications

The implications of this case are serious for parties who use claims consultants and for claims consultants themselves. To ensure that privilege exists between a claims consultant and its client for commercial and legal advice given, it will be necessary to ensure that the claims consultant, or a person in the claims consultant's team giving the advice, is a practising solicitor or barrister. If this does not occur, privilege will not attach to the communications, and they will therefore in principle be disclosable (unless some other head of privilege exists, which it may not).

Note, however, that the rules concerning legal privilege in communications between clients and their non-legal advisors are under review, and a major case will be heard later this year by the Supreme Court on whether tax advice given by accountants attracts privilege. The result of this Supreme Court case will almost certainly have implications for claims advice given by non-lawyers to their construction clients.

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