The Legal Spotlight: A Question Of Privilege

Authored by Charles Hollander QC

In the context of a proliferation of litigation funders and funded cases, Brick Court Chamber's Charles Hollander QC considers the often thorny issue of privilege

Once upon a time, litigation funding was champertous and unlawful. We are living in a brave new world where litigation funding creates new opportunities and new risks. The law of legal professional privilege is an area which has to adapt to the relationship between funder and litigant.

The funders will want to see advice from lawyers who have conduct of the potential litigation. The lawyers will not in such circumstances act for the funders: on the contrary, there will be a potential conflict between the interests of the funders (getting objective advice which will enable them to decide whether to fund on the best terms available) and the client's lawyers (whose duty is, within the limit of their professional obligations, to further the interests of the client).

Client privilege

So if the lawyers do not act for the funder but the client, there is no relationship between the client's lawyer and the funder, which creates privilege. The lawyer is not giving the funder legal advice or litigating on the funder's behalf. The privilege is that of the client.

The client will authorise the lawyers to provide an opinion to the funders. It should be an opinion addressed to the client which represents the legal advice given to the client. This is logical, because the funder will want to know what legal advice is being given to the client by the lawyers. The opinion when sent will be the confidential legal advice given to the client, sent to the funder with a view to satisfying the funder that the case is strong enough to justify funding. Whether by means of the principle of common interest privilege, or the principle of limited waiver, there should be no difficulty in claiming privilege for that legal advice in the hands of the funder. If A shows the confidential legal advice which he has received to B, so long as the advice is shown in confidence, there is no difficulty in both A and B claiming privilege. Only the client can waive that privilege. Similarly where other materials prepared for the client and privileged through the client's litigation privilege are sent to the funders, no problem arises.

It is to be emphasised that, in relation to communications between the client's solicitors and the funders, the funders do not have any relevant privilege of...