Inner House finds SLCC unable to recover privileged documents from solicitors in context of service complaint

About this case:

• Citation:
  [2022] CSIH 46
• Judgment:
  External link
• Court:
  Court of Session Inner House
• Judge:
  Lady Dorrian

The matter arose following a third-party complaint to the SLCC against work undertaken by respondents Donald Murray and James McCusker during divorce proceedings. The petitioner had requested production or delivery of the business file in relation to the complaint, which the respondents maintained was protected by legal professional privilege.

The petition was heard by the Lord Justice Clerk, Lady Dorrian, alongside Lord Malcolm and Lord Turnbull. C O’Neill KC appeared for the petitioner and Whyte, advocate, for the respondents. Interventions in the case were made by the Faculty of Advocates and the Law Society of Scotland, who were represented by the Dean of Faculty, Roddy Dunlop KC.

No express override

Following the making of the complaint, the petitioner served notice under section 17(1) of the 2007 Act to the respondents requiring production or delivery of the business file in relation to the complaint within 14 days. The file was not produced. The client in the proceedings had since instructed another firm, which held the majority of the case papers, however it was accepted that some potentially relevant files were retained by the respondents.

The respondents did not release the material on the advice of the Law Society of Scotland. They maintained they were incapable of disclosing the relevant documents to the SLCC because of LPP. While the petitioner considered it had enough information to investigate three of the four complaints raised by the client with the material available to them, it maintained that it required the file held by the respondents to address complaint 4, namely that the first respondent had failed to act with competence and diligence in not providing all necessary vouching to the client’s new solicitor since September 2018.

It was agreed by the parties that LPP could only be overridden in certain limited circumstances and that there was no express statutory override in this case. However, the petitioners argued that there was a valid exception arising for non-infringement, which had been recognised by the English courts, or alternatively that LPP was impliedly overridden by necessary implication of statute.

Counsel for the respondents submitted that confidentiality survived the termination of the solicitor-client relationship and could only be discharged by waiver of the client, not by the solicitor. Without a clear or direct limitation on the part of the Act, LPP was protected. For the interveners it was submitted that reading the provisions of the Act as subject to LPP would not stultify or frustrate any part of its purpose since it would have no impact in the majority of complaints in which waiver would have operated.

Fundamental stumbling block

Lady Dorrian, delivering the opinion of the court, first observed: “No issues arise at the present stage of these proceedings as to whether the communications or documents in question are indeed such as fall within the scope of LPP. The arguments proceed at a level of principle, and by assuming, for these purposes, that this is so.”

She continued: “There is a general duty of confidence which requires a solicitor to keep his client’s affairs confidential, which duty may be overridden in the public interest. To discuss a client’s affairs in breach even of this general duty of confidence would be a grave breach of the duty; to answer legitimate questions in the course of a litigation, or in response to a relevant inquiry from the regulator, in respect of non-privileged communications, would not be.”

Examining whether the statute allowed for a no infringement exception, Lady Dorrian explained: “The argument that there was no infringement arose from efforts to explain the decision in Parry-Jones v The Law Society (1969), and from obiter comments by Lord Hoffman in Morgan Grenfell v Special Commissioner of Income Taxes (2003). It seems to us to be a somewhat fruitless task to seek to elucidate the rationale of Parry-Jones. The distinction between general duties of confidence as opposed to LPP, as developed in a modern understanding of the issues, may lie at the heart of it.”

Turning to the argument of necessary implication, she said: “There is a significant and fundamental stumbling block in the way of the petitioner’s argument, in the terms of para 1 of schedule 3 to the Act. The effect of this is that an individual who presents a complaint may only pursue that complaint if he waives any right of confidentiality on his own part (the emphasis is ours). That must include the right to assert LPP. The choice is left to the complainant: they may assert the privilege, although if they do so the complaint cannot progress.”

Lady Dorrian concluded: “We are not satisfied that a statutory override must be read into the Act as a matter of necessary implication. The client is entitled to assert his privilege and the solicitors may not disclose to the petitioner any communications or documents within the scope of that privilege. Parties raised the possibility that it might be necessary for there to be further proceedings, including the appointment of a commissioner, to resolve any further issues. We will therefore put the case out By Order in case further discussion of these matters is required in light of this opinion.”