Legal advice privilege applies to internal client communications within a corporate group
In a recent ruling, the Commercial Court has held that internal communications between members of a corporate client group can attract legal advice privilege, provided they were created for the dominant purpose of seeking legal advice, regardless of whether a lawyer was directly involved in the communication.
The decision provides clarity for large organisations navigating disclosure obligations, however the ruling does not alter the narrow definition of the “client” for the purposes of claiming legal advice privilege, which was confirmed in SFO v ENRC following the well-known Court of Appeal judgment in Three Rivers (No.5).
Background
Aabar Holdings S.À.R.L. & Ors v Glencore PLC & Ors [2026] EWHC 877 arose following multiple claims which were brought against Glencore by groups of investors. During the disclosure process, Glencore initially took a broad approach to asserting legal advice privilege, treating all employees as part of “the client” and withholding all communications made for the dominant purpose of seeking or receiving legal advice. After the claimants challenged this stance, Glencore altered its approach and disclosed around 885 previously withheld documents. However, it continued to withhold certain documents on a narrower basis: that privilege attached to communications between members of the designated “client group”, irrespective of whether a lawyer was a party to the communication.
The claimants argued that, under the Court of Appeal’s decision in Three Rivers (No.5), legal advice privilege is confined to communications between the client and their lawyer, or documents that directly evidence, or were intended to be such communications. They applied for a court order requiring Glencore to produce all withheld intra-client documents that did not fall within those narrow categories.
Issues before the Commercial Court
The court had to decide:
- Whether Three Rivers (No.5) is binding authority preventing the assertion of legal advice privilege over internal client group documents, that is, communications between members of the client group where no lawyer is a party.
- If not, whether, as a matter of principle, legal advice privilege can extend to such documents.
The Commercial Court’s decision
Three Rivers (No.5) does not address internal client group documents
Mr Justice Picken conducted a detailed review of Three Rivers (No.5) and concluded that the case was concerned only with documents from outside the client group, that is, communications involving individuals outside the designated client group. The reasoning in Three Rivers (No.5) did not address what happens when both parties to a communication are within the client group.
The judge found that none of the subsequent authorities relied on by the claimants, including Three Rivers (No.6), SFO v ENRC, and In re RBS Rights Litigation, altered this analysis.
Privilege extends to internal client group documents as a matter of principle
Having concluded that no binding authority prevented it, the court went on to hold that, as a matter of principle, legal advice privilege should extend to internal client group documents created for the dominant purpose of seeking legal advice.
The judge identified a number of reasons why, in his view, a more restrictive position would be illogical:
- There is no principled distinction between an engagement letter sent to a lawyer identifying the issue on which advice is sought, and an internal document identifying that same issue before the lawyer has been consulted.
- An internal note made in preparation for a meeting with a lawyer will inevitably evidence the substance of a later privileged communication between a lawyer and their client. Therefore, denying such a document protection would be difficult to justify.
- If lawyers’ working papers attract privilege, there is no reason why the equivalent “client’s working papers” should not also be protected, provided they are sufficiently connected with the process of seeking legal advice.
The judge found further support in the Court of Appeal’s decision in Jet2.com v CAA, which confirmed that privilege can attach where the dominant purpose of a communication to people other than lawyers is to settle instructions for a lawyer.
Comment
This welcome decision has potential practical implications for businesses, particularly large organisations with complex internal structures. For example, companies may not need to ensure a lawyer is copied into every internal communication relating to the process of seeking legal advice, in order to preserve privilege over that communication. When deciding whether a document is privileged, the key consideration is the main purpose of the document, not whether a lawyer was directly involved. Nevertheless, given that this is high court authority, it is possible that this decision may be considered at appellate level.
The ruling does not, however, attempt to alter the fundamental principle of Three Rivers (No.5), which the Court of Appeal in SFO v ENRC and Jet2.com, that communications between a company's lawyers and employees outside the designated client group do not attract legal advice privilege. An appeal to the Supreme Court would be required to change that position.
The use of AI by organisations did not fall to be considered by the court in this case. However, in light of this decision, the use of AI, which is increasingly embedded in working practices, to prepare working papers raises an interesting question. Picken J agreed that information or thoughts prepared by a member of the client group, even though they would not be attending the meeting with the lawyer, and shared with another client group member for the purposes of seeking legal advice, would attract privilege. But does this remain the case if that client group member uses AI to generate that information? Or as a drafting partner to develop and refine their thoughts? Would it matter whether the client group member used a closed- or open-source AI tool? In particular, might the use of an open-source AI tool inadvertently send the information in question outside the client group? There is recent Upper Tribunal authority (albeit in the context of legal representatives putting client confidential information into AI tools) to suggest that putting confidential information into an open-source AI tool is tantamount to putting it in the public domain, whereby the information loses confidentiality and legal privilege is waived[1]. Of course, this is an Upper Tribunal decision and may be challenged in due course. However, while the law is developing in this area, it makes sense to exercise caution, including as to whether confidentiality remains intact when using open-source AI tools.
In practical terms, organisations should continue to consider taking the following steps to attract and preserve legal advice privilege:
- Review privilege protocols: Legal and compliance teams should revisit how they identify and protect internal communications within the client group made in the course of seeking legal advice, including preparatory emails, internal briefing notes, and working documents.
- Maintain the dominant purpose test: The protection only applies where the dominant purpose of the document is to seek legal advice. Documents created primarily for commercial or operational purposes will not qualify, even if shared within the client group.
- Define the client group clearly: Organisations should ensure they have a clearly defined and documented client group, being the individuals tasked with seeking and receiving legal advice, as this boundary remains central to privilege analysis.
- Keep records: Where internal documents are created in preparation for seeking legal advice, it is good practice to record that purpose contemporaneously, as this will assist in any subsequent privilege challenge.
- Open-source AI: Organisations should consider the AI tools at the disposal of their employees, and put in place policies and guidance to protect the confidentiality of their information when such tools are used.
[1]UK v Secretary of State for the Home Department (AI hallucinations; supervision; Hamid) [2026] UKUT 81 (IAC) paragraph 60
For further information, please email the authors or your usual CMS contact.
This article was co-authored by Hannah Forbes, Trainee Solicitor at CMS
