Milton McIntosh warns that many surveyors misunderstand the rules on disclosure
There is a tendency to assume that, when a dispute arises in a property context, say, regarding dilapidations or a rent review, all communications between the client and the surveyor advisers will be protected from disclosure – “They are privileged, aren’t they?” is the common refrain. However, they may well not be. The scope of privilege is much more limited than most surveyors believe.
So what is ‘privilege’? Privilege is concerned with the entitlement of a party to litigation to withhold relevant evidence from production or disclosure to another party to the dispute or to the court. In litigation, the starting point is that all documents relevant to the issues in dispute should be disclosed. This applies not only to documents that help the disclosing party’s case, but also those that help the opposing party. It can be a very inconvenient rule for the party having to give up a damaging document.
For example, if, after proceedings have commenced in a boundary dispute, a party comes across a deed establishing that the opposing party is correct in their claims about the true position of the boundary, the finder is duty bound to disclose it to opposing party.
All relevant documents should be included in the list that a party compiles at the disclosure stage of proceedings or, subsequently if documents are created or located at a later stage.
However, certain documents are protected from disclosure, i.e. they are ‘privileged’. One type of privilege is ‘legal professional privilege’, which includes legal advice and litigation privilege.
Legal advice privilege
Legal advice privilege attaches to confidential communications between a lawyer and their client for the purpose of seeking and receiving legal advice. It can apply at any time, whether or not litigation is pending or contemplated. The word ‘lawyer’ includes solicitors, barristers, in-house lawyers and foreign lawyers. In the recent decision of R (on the application of Prudential plc) v Special Commissioner of Income Tax  the Supreme Court refused to extend the scope of legal advice privilege to specialist accountants who give tax advice to clients.
Without question, legal advice privilege does not apply to surveyors giving advice direct to clients outside the context of a dispute regardless of the legal content of that advice, which in certain specialist areas may be very significant.
For example, if, ahead of serving a substantial service charge demand that is likely to be disputed by tenants, the landlord’s surveyor writes to advise their client of a possible unfavourable interpretation of the service charge clause, that advice will not be privileged.
Surveyors should also be aware that, in the context of Licensed Access (formerly Direct Professional Access) to barristers, the fact that they have taken on the role as professional instructing counsel does not change the privilege rule. Surveyors are best advised to ensure that counsel’s advice is addressed to the client direct, to avoid any issue about the transmission of that advice through the surveyor.
It is usually the scope of litigation privilege that is widely misunderstood and narrower than is generally believed.
This privilege protects from disclosure confidential communications between a client and their lawyer, a client and third parties and a client’s lawyer and third parties. Thus a surveyor’s communications with their client and their client’s lawyer may be protected under the rule.
The communication must be for the dominant purpose of litigation that is either pending, reasonably contemplated or existing. This includes tribunal hearings and arbitrations. The emphasis is on ‘dominant’; it does not have to be the ‘exclusive’ purpose and a document prepared for a number of purposes, one of which is litigation, may be protected.
Thus, in the context of a rent review dispute, a valuation undertaken by a landlord’s valuers for mortgage purposes may be disclosable, but advice from the same valuers as to the approach the arbitrator may take to the valuation of the property for the purposes of making a settlement offer to the tenant would not. Similarly, in a dilapidations dispute, discussions between the landlord and its letting agents about the effect the condition of the property may have on its lettability may not be protected, while discussions with building surveyors on the effect of undertaking different schemes of repair works may have on the claim against the old tenant may be protected.
Litigation, if not already existing, must be ‘pending or reasonably contemplated’. It is not sufficient to show that there is a mere possibility of litigation, or that there is a distinct possibility that someone might at some stage bring proceedings, or a general apprehension of future litigation. This does not require the prospect of litigation to be greater than 50%, but a possibility that, sooner or later, someone may make a claim. A general expectation of future litigation is not enough.
The point at which litigation privilege is triggered in any particular case depends very much on the specific facts. If there is any doubt on the matter, it may be sought to bring the communication within the scope of legal advice privilege. The communication should be directed via the client’s solicitors and headed ‘Confidential and privileged – communication for the purpose of legal advice’. However, it should be noted that the heading used is not decisive. It is content that matters, and in at least one court decision, a very restrictive view of the word ‘client‘ for the purposes of litigation advice privilege was taken.
Ultimately, the safest course for a surveyor to take prior to litigation being pending or contemplated is not to commit to writing anything where disclosure to the other side would be a concern; instead, hold a meeting or telecon.
Milton McIntosh is a Consultant Solicitor at Excello Law and is a member of the RICS Dispute Resolution Professional Group Board – firstname.lastname@example.org