Aabar v Glencore: Legal advice privilege and intra‑client communications

In Aabar Holdings S.A.R.L and others v Glencore Plc and others¹, the English High Court has held that legal advice privilege (LAP) can apply to communications or documents created by or passing between members of a "client" group not including a lawyer (so called "intra-client documents"), as long as the dominant purpose of such communications is to seek or receive legal advice.

This is the second significant privilege decision given by Mr Justice Picken in the Aabar proceedings. In 2024², the judge held that the so-called "Shareholder Rule" should no longer apply as a matter of English law – a position which the Privy Council subsequently endorsed.³

Our previous client alerts on this issue are here: Privilege in company/shareholder disputes: Aabar Holdings S.A.R.L v Glencore Plc and others | DLA Piper and Privy Council declares the Shareholder Rule “altogether unclothed” and no longer good law in England and Wales | DLA Piper).

 

What led to the dispute over privilege?

During extended disclosure in the underlying proceedings, the First Defendant informed the Claimants that it had approached its disclosure exercise on the basis that the Court of Appeal's decision in Three Rivers (No 5) was wrongly decided, and had applied LAP more widely to all communications made for the dominant purpose of seeking or receiving legal advice.⁴ The First Defendant subsequently changed its position, no longer relying on Three Rivers (No 5) being wrongly decided, but maintaining that LAP could be asserted over communications within the client group not involving a lawyer – ie intra-client communications.

The Claimants applied for an order requiring the First Defendant to produce all documents withheld on the basis of LAP where such communications were intra-client communications rather than communications between the client group and their lawyers, so-called "inchoate" communications (ie materials otherwise protected by LAP which were intended to be – but were never in fact – communicated between a lawyer and their client), or secondary evidence of privileged communications.

 

The decision

Considering the existing authorities on LAP, Picken J found in favour of the First Defendants.

The Claimants relied on Three Rivers (No 5) to argue that it was a "basic tenet" of LAP that it only applied to communications between a lawyer and their client.⁵ However, Picken J concluded that "Three Rivers (No 5) was not concerned with […] the extent to which legal advice privilege applies to internal communications between members of a client group and/or documents created by a member of the client group" as opposed to documents or communications between members of the client group and third parties.⁶

Picken J also concluded that the earlier authorities relied on by the Court of Appeal in Three Rivers (No 5) failed to address intra-group communications.⁷ References to "lawyer-client" communications in the authorities should not be taken as justification for treating intra-client communications as not attracting LAP where all other aspects of the test are met.⁸

Picken J held that the Claimants' approach could not be justified for the following reasons:

1. The Claimants conceded that LAP extended to two categories of intra-client communications; namely those that contain secondary evidence of a privileged communication and inchoate communications. The relevant question was the extent to which LAP can attach to intra-client communications, as opposed to whether it could attach at all (which it clearly did).⁹

2. It was "illogical" for LAP to attach to documents such as engagement or instruction letters, but not to a document created by the client that identifies the same issues set out in those letters. Such a distinction was arbitrary in circumstances where the two documents were materially the same.¹⁰

3. It was inconsistent to deny LAP to a memorandum prepared by a member of the client group before a meeting with their lawyer, or to an email between client group members in preparation for such a meeting. Such documents would "inevitably" evidence the substance of any later communication. Picken J relied on textbook authority on the secondary evidence principle to support the proposition that LAP can extend to documents which are anterior to a privileged communication.¹¹

4. In circumstances where a lawyer's working papers are protected by LAP, it was difficult to see why a client's working papers should not also attract LAP, as they are a "mirror image" of each other and should be treated the same way.¹²

 

Why is the decision significant?

The decision is further good news for companies with multiple employees or directors in a "client" group involved in obtaining legal advice and reflects the commercial reality of the often complex decision-making and preparatory processes behind seeking legal advice. Provided individuals are part of a defined client group and their confidential communications are for the dominant purpose of obtaining legal advice, they should be able to communicate among themselves – independently of a lawyer – without compromising LAP protection.

The decision does not, however, expand the definition of the ultimate corporate client as set out in Three Rivers (No 5) and confirmed by the Court of Appeal in SFO v ENRC¹³, being those employees or officers expressly charged with seeking legal advice on behalf of the corporate client.¹⁴ For LAP to extend to intra-client communications, those individuals must still be within the client group and communicate for the dominant purpose of seeking or receiving legal advice.

In conclusion, Picken J’s decision is another welcome example of the English Court adopting a more commercial and practical approach to LAP. However, it is a first instance decision and it remains to be seen how it will be treated by higher courts.