UK Businesses Mull Implications Of Law Lords' Privilege Ruling

by Robin Pilgrim, LawAndTax-News.com, London

16 November 2004

Although the UK's business community welcomed the announcement last week that Law Lords had decided to effectively maintain the status quo with regard to legal advice privilege, the ruling may have the consequence of increasing costs, according to reports.

Overturning an Appeals Court ruling in the dispute between Three Rivers Council and the Bank of England over the collapse of BCCI, the Law Lords supported the Bank of England's claim that documents requested by the Council were legally privileged.

However, Lords Brown, Carswell and Rodger, and Lady Hale also limited the number of people within a business that can claim such privilege to the senior executives and in-house counsel who deal directly with the external lawyers.

Speaking to the London Evening Standard this week, Lovells partner Christopher Grierson, who led the action against the Bank of England, predicted that the Lords' decision "could be a trigger for a greater amount of outsourcing for the provision of legal services to ensure the preservation of privilege".

Industry observers have also suggested that the ruling is likely to restrict communication between the upper and lower echelons of businesses in the UK, in order to prevent the dissemination of sensitive information.

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