Longmore J decided the matter correctly on the basis of precedent. As to Upjohn Co v United States 449 US 383, Burger CJ stated the rule as applying to employees and ex-employees. All subsequent lower court decisions in the United States have followed his lead.
Jonathan Crow for the Attorney General (written submissions). For the reasons given in the Bank's and the Law Society's cases, the correct test for the application of legal advice privilege is that set out in Balabel v Air India  Ch 317, in particular at pp 330-332. The Court of Appeal's judgment is wrong. In particular: (i) it is incompatible with the public policy on which legal professional privilege is based; (ii) it is based on too narrow a definition of "legal advice"; (iii) it introduces an unwarranted distinction between individual and corporate witnesses and (iv) it is inconsistent with previous authority.
As to public policy, and the statement in paragraph 39 of the Court of Appeal's judgment  QB 916, 935 that "it is not easy to see why communications with a solicitor should be privileged", the courts in the United Kingdom have for more than 150 years regarded legal advice privilege as being a fundamental right and an inviolable safeguard of the interests of justice: see per Lord Brougham LC in Greenough v Gaskell 1 M & K 98, 103 and Lord Hoffmann in R (Morgan Grenfell & Co Ltd) v Special Comr of Income Tax  1 AC 563, 606-607, para 7. The same public policy imperative requires that not only should any instructions from the client to the lawyer be protected but also any advice from the lawyer to the client. A similar approach has been taken in Scotland with regard to "confidentiality of communications": see per Lord Wood in McCowan v Wright (1852) 15 D 229, 237 (obiter). It is clear from these authorities that the policy basis for the privilege in relation to lawyerclient communications is exactly the same whether or not litigation is in progress or contemplation. Further, the policy basis for legal professional privilege is driven by entirely pragmatic considerations, namely the public benefits of clients having professional legal advice and assistance and the consequent need to ensure absolute candour and trust between lawyers and their clients. As a result, the rule must be clear in its application, so that an absolute assurance of confidentiality can be given to the client: see, e g, B v Auckland District Law Society  2 AC 736, 759, para 54. By contrast, the Court of Appeal's comments would, if adopted, introduce an undesirable element of uncertainty. It questions the need for legal professional privilege where "litigation is not anticipated" (see  QB 916, 935, para 39), but no one ever knows whether or when they may be sued, nor whether or when they may need to sue someone else.
The modern case law on legal professional privilege has divided the privilege into two categories, legal advice privilege and litigation privilege. Litigation privilege covers all documents brought into being for the purposes of litigation. Legal advice privilege covers communications between lawyers and their clients whereby legal advice is sought or given. In In re L (A Minor) (Police Investigation: Privilege)  AC 16, 26 Lord Jauncey of Tullichettle described litigation privilege as "essentially a creature of adversarial proceedings" and held that the privilege could not be claimed in order to protect from disclosure a report prepared for use in non-adversarial proceedings. Lord Lloyd of Berwick and Lord Steyn, at pp 30 and 37, expressed their agreement. The Bingham Inquiry could not have been described as adversarial. It was, as inquiries invariably are, an inquisitorial proceeding. It was no doubt with In re L in mind that the Bank did not claim that the documents of which disclosure was being sought were entitled to litigation privilege. The Bank took its stand on legal advice privilege. As to that, the Bank claimed privilege for all documents prepared for at least the dominant purpose of obtaining or recording legal advice from Freshfields or counsel. In para 30 of his judgment Tomlinson J accepted this claim. He said: "In my judgment an internal confidential document, not being a communication with a third party, which was produced or brought into existence with the dominant purpose that it or its contents be used to obtain legal advice is privileged from production." He therefore dismissed the 25 October 2002 discovery application.
None of these judicial dicta tie the justification for legal advice privilege to the conduct of litigation. They recognise that in the complex world in which we live there are a multitude of reasons why individuals, whether humble or powerful, or corporations, whether large or small, may need to seek the advice or assistance of lawyers in connection with their affairs; they recognise that the seeking and giving of this advice so that the clients may achieve an orderly arrangement of their affairs is strongly in the public interest; they recognise that in order for the advice to bring about that desirable result it is essential that the full and complete facts are placed before the lawyers who are to give it; and they recognise that unless the clients can be assured that what they tell their lawyers will not be disclosed by the lawyers without their (the clients') consent, there will be cases in which the requisite candour will be absent. It is obviously true that in very many cases clients would have no inhibitions in providing their lawyers with all the facts and information the lawyers might need whether or not there were the absolute assurance of non-disclosure that the present law of privilege provides. But the dicta to which I have referred all have in common the idea that it is necessary in our society, a society in which the restraining and controlling framework is built upon a belief in the rule of law, that 650 communications between clients and lawyers, whereby the clients are hoping for the assistance of the lawyers' legal skills in the management of their (the clients') affairs, should be secure against the possibility of any scrutiny from others, whether the police, the executive, business competitors, inquisitive busybodies or anyone else (see also paras 15.8 to 15.10 of Zuckerman's Civil Procedure (2003) where the author refers to the rationale underlying legal advice privilege as "the rule of law rationale"). I, for my part, subscribe to this idea. It justifies, in my opinion, the retention of legal advice privilege in our law, notwithstanding that as a result cases may sometimes have to be decided in ignorance of relevant probative material.