Legal advice privilege: here to stay

Implement systems to establish what documents are being produced and develop a coherent retention and disposal policy. Ascertain exactly what material the company produces (for example, hard copy documents, e-mails, tapes of telephone calls) and what is retained before isolating areas of potential risk and determining appropriate steps.

Educate staff on the risks inherent in document creation. Communications should be drafted keeping in mind the possibility that they may be used in court. As e-mail is used as an informal communication method that carries the inherent risk of indiscreet remarks being made, there should be a formal policy on the permitted use of e-mail or other instant messaging services.

Keep privileged documents in separate files marked "privileged and confidential". This reduces the risk that privileged material may be inadvertently disclosed and, in the context of dawn raids, may buy time in which the status of the document can be assessed. Explore IT solutions such as the automatic diversion of e-mail from lawyers into separate folders.

Establish steps to restrict circulation of documents. Inadvertent or unduly wide circulation of documents (for example, by accidental use of the "reply to all" command in e-mail) may raise issues of loss of privilege and, where information concerns individuals, defamation and data protection. Educate staff on the methods by which documents can be easily circulated and consider IT solutions, such as an automatic message to confirm whether the "reply to all" was intentional, before it is actioned.

Attempt to define the client widely in, for example, the terms of engagement letter or through the setting up of a broad team receiving assistance from the lawyers. However, the courts may be prepared to look through any scheme that purports artificially to widen the client entity.

Ensure documents created internally are created within the client and not by third party employees, and that communications from lawyers go only to the client entity.

Consider the use of lawyers (external or in-house) to conduct any necessary fact-finding and interviews into the client's internal defaults (however, if there is an EU aspect to the matter, external lawyers should always be used as privilege for in-house lawyers is not currently recognised at an EU level). The lawyers' notes should include opinion and advice to help maintain a claim for privilege.

Consider how to instruct experts and third parties. If litigation privilege is not available, then communications with third parties are not privileged. Possible solutions are to have a lawyer prepare the report or to have the third party report orally to a lawyer who then builds that into advice.

Ensure that circulation of documents to third parties does not lead to waiver or loss of privilege. Any proposed disclosure by the client (for example, to other professional advisers) should be carefully analysed in terms of whether it is truly necessary and whether there is a basis such as common interest privilege on which to retain a claim for privilege.

Three Rivers No 5 did not address whether its concept of client applies such that circulation of privileged material internally but beyond the client entity is to be regarded as circulation to third parties. This is a danger.

If privilege does not apply consider whether the information can be given orally rather than in writing. Where written advice is given, head work "privileged and confidential" to guard against inadvertent disclosure.