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13th June 2012

Keeping advice confidential...

A party in civil court proceedings is obliged to show to the other parties to the proceedings all relevant documents in its possession, even if they may damage its own case.

However, there are exceptions to this rule where the documents include communications between a lawyer, in his professional capacity, and his client, for the purposes of giving or seeking legal advice or, where legal proceedings have been commenced or contemplated, communications between a lawyer or his client and third parties for the purposes of those proceedings. These exceptions are called, respectively, legal advice and litigation privilege.

It is common in the construction industry for parties to obtain advice from consultancies - even those employing lawyers - who advise on disputes relating to construction projects and, in a recent case in the Technology and Construction Court, the court was asked to consider whether communications between an employer and its construction consultant are privileged from production. In this instance the advice was even being given by a non-practising barrister.

Walter Lilly & Company Ltd ("WLC") were employed by DMW Developments Ltd ("DMW") to build a house for Mr MacKay. Mr MacKay had engaged claims consultants, Knowles Ltd, to provide "contractual and adjudication advice" on the project. WLC brought a claim against Mr Mackay and DMW and, when the defendants withheld some material from inspection, WLC issued an application for disclosure of all correspondence with or documents created by Knowles.

The judge held that legal advice privilege did not apply to the documents and that they must be shown to the other party. Knowles did not hold themselves out as lawyers, nor were they retained as lawyers or to provide legal advice. Whether Mr MacKay's contacts at Knowles were lawyers was immaterial. The judge considered that, save in exceptional circumstances, privilege is not intended to extend to a client's relationship with someone other than a qualified and practising lawyer.

The judge recognised that he had not addressed litigation privilege or whether advice and communications by claims consultants in connection with adjudication proceedings are privileged. In particular he noted that there is very little authority on the point and public policy requirements might lead to a different conclusion.

In summary, for now at least, parties need to be careful when relying on advice from such consultancies and, if you don't want others to see your communications with them, you should make sure that they are made with or through your lawyers.

For further information on dealing with construction disputes, please contact Tim Richards on timrichards@hewitsons.com or on 01908 247011.

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