Russian legal profession and legal professional privilege in the eyes of the High Court

[commentary to PJSC Tatneft v Bogolyubov & Ors [2020] EWHC 2437 (Comm)]

 

The judgment arises from a claim brought by PJSC Tatneft (“Tatneft”), one of the biggest Russian oil companies, against four individuals for their alleged involvement in a well-organised fraudulent scheme. The submission is governed by Russian law.

The Second Defendant in the proceeding challenged Tatneft’s claim to privilege over a bunch of its internal communications. Tatneft gave standard disclosure and asserted legal advice privilege over several categories of its internal documents, withholding them from inspection.

The Claimant insisted that its claim to legal advice privilege covered communications between its managers and members of its in-house legal department. It was also confirmed that the employees of legal department were qualified Russian lawyers but did hold status of “Advocate” in the Russian Federation.

The Defendant submitted that the Court should be concerned with the official “status” of the “lawyer,” not just their formal function. Under the current English law, legal advice privilege only applies to:

  • “Professional lawyers,” i.e., legal advisers who are professionally qualified and members of various registered and recognised professional bodies.
  • In-house lawyers if the in-house lawyers are regulated and admitted to practice.
  • Foreign lawyers if they are “appropriately qualified.”

The Defendant argued that Russian in-house lawyers did not meet the above criteria on the basis that:

  • An advocate is an independent legal professional (advisor) admitted to the Russian bar (regional advocate chambers), and there is an official Register of advocates maintained by the Ministry of Justice of the Russian Federation.
  • In-house lawyers are employed by a particular company and do not hold the advocate status.

The judge, citing Three Rivers (No 6) [2005] 1 AC 610, considered the rationale underpinning legal advice privilege, namely that it is in the public interest that clients can obtain legal advice and that those communications be kept confidential. Consistent with this approach, the English Court had extended legal advice privilege to foreign lawyers. The judge also mentioned R (on the application of Prudential plc and another) v Special Commissioner of Income Tax [2013] UKSC 1, which endorsed a broad application of legal advice privilege to foreign lawyers. It was noted that that the law of legal advice privilege had been extended to foreign lawyers without regard to their national standards or regulations. The extension of legal advice privilege to foreign lawyers was “based on fairness, comity and convenience.”

The judge concluded that legal advice privilege extends to communications with foreign lawyers whether they are “in-house”. Courts will not enquire into how or why the foreign lawyers are regulated. The only requirement is that the foreign lawyers “should be acting in the capacity or function of a lawyer.” There is no requirement that foreign lawyers must be “appropriately qualified” or regulated as “professional lawyers.”

This judgment may have significant implications for other Russia and CIS-related cases in English courts, taking into consideration that the Russian majors use mostly their own in-house legal departments to cut down the costs. It is also relevant to the large group of domestic lawyers employed by international law firms operating in Russia who are hired under employment contracts and do not hold advocate status. Thus, international business should not have concerns regarding confidentiality of communications when they retain Russian lawyers without advocate status.

If you would like to discuss any issues regarding CIS practice that your business might be facing, then please contact our consultant Dmitry Gololobov on 07921 160 108 or at dmitry.gololobov@ilaw.co.uk.