With government intelligence agencies and tax authorities coming under a spotlight in recent weeks over the sourcing of legally privileged documentation, justification and potential implications for such action has increasingly generated cause for concern among City lawyers.
It emerged in November that the Investigatory Powers Tribunal had discovered that legally privileged documents may have been targeted by British intelligence agencies MI5, MI6 and GCHQ.
Extracts of the agencies’ policies stated that GCHQ may ‘in principle target the communications of lawyers’, while MI5 told its intelligence officers that ‘legal professional privilege material may be used just like any other item of intelligence’.
In response, Signature Litigation’s Graham Huntley, said: ‘Great care needs to be exercised before undermining the fundamental constitutional right of privilege, which makes our legal environment one of the most trusted in the world.’
Tax authorities have also come under the spotlight. HM Revenue & Customs is increasingly requiring legal and accountancy firms to hand over documents relating to clients who are subject to criminal tax investigations – more than 1,500 were issued in the last year, according to research by City firm RPC. This creates a ‘legal minefield’ for lawyers and accountants who receive them, as they can provide too much documentation to the government, putting the firm at risk of a legal claim from its client, or too little, which could lead to criminal liability for failure to comply.
DLA Piper disputes partner Nick Marsh said: ‘Generally speaking, privilege is respected with exceptions, but those exceptions are being chiselled away at and lawyers are understandably nervous about this and tend to feel that their (or better, put, their clients’) privileges are sacrosanct.’
Marsh added: ‘There is a fundamental tension here. On one hand, English law wants to respect the right of a client to go to a lawyer and to say everything without fear of it being published. But you also want to give the courts as much evidence as possible to reach a fair result.’
sarah.downey@legalease.co.uk