Legal Advice Privilege and its Relevance to Corporations

Abstract

This article considers whether the rationale for legal advice privilege applies to corporations. It examines the rationale for legal advice privilege in the aftermath of the disagreement between the Court of Appeal and the House of Lords in the Three Rivers litigation, and argues that the rule of law rationale for advice privilege endorsed by the House of Lords is based largely on the needs and behavior of individuals. The paper examines the case for recognising advice privilege for corporations. Recent developments in corporate law and governance, especially in relation to directors' duties, have arguably reduced the need for a corporate privilege. Public and large private companies in particular already have sufficient incentives to obtain accurate legal advice about their affairs even without a privilege. There are also sound policy reasons for restricting the right of corporations to claim legal advice privilege given its costs to the administration of justice.