When a financial services company went into administration and came under investigation by the Financial Services Authority (FSA), the emails of one of its directors were copied by the FSA, which wished to use them in evidence.
The FSA sought to use eight emails, two of which contained advice from the director’s solicitors and six of which contained advice from a leading firm of accountants that had been sent to his solicitors and forwarded on to him by them.
The copying of his email account was undertaken without the director being informed.
The director argued that all eight emails were ‘privileged’ and could not therefore be used in evidence unless he voluntarily disclosed them. A legally privileged communication is one containing legal advice. Solicitors’ communications with their clients that contain advice are normally privileged.
The court agreed that the two emails from the director’s solicitors were privileged. However, the six that simply forwarded on advice given by the accountants were not necessarily subject to privilege.
Whether the six emails are considered to be protected by legal professional privilege will depend on a ruling of the Supreme Court. The decision, which is expected shortly, deals with whether or not professional advice on tax law matters given by a firm of chartered accountants qualifies as privileged information.
It is commonplace for a company that becomes insolvent to be investigated and the conduct of the directors considered. In this case, the investigation was by the FSA, but the Insolvency Service also instigates investigations.
If you are taking advice from a solicitor, you have a good chance of being able to claim that communications received from your solicitors are privileged and thus cannot be used in evidence against you. Advice from other professionals is not normally legally privileged.
If you are concerned about the ability of your business to avoid insolvency, we may be able to help protect your position: contact DFA Law’s Richard Forskitt for advice.