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Insurance and common interest legal professional privilege

28 November 2022 Donald Dinnie, Norton Rose Fulbright
Donald Dinnie, Norton Rose Fulbright

Donald Dinnie, Norton Rose Fulbright

A party may claim legal advice privilege or litigation privilege.

Legal advice privilege requires that the information is legal advice, given by a legal advisor in confidence to a client and in respect of which privilege is claimed.

Litigation privilege protects communication between co-litigants or their legal advisors and third parties where the communication is made for the purposes of pending or contemplated litigation. The relevant document must have been obtained or brought into existence for the purposes of a litigant’s submission to a legal advisor for legal advice and litigation must be pending or contemplated as likely at the time. On the requirement that litigation must be reasonably contemplated see the discussion in this judgment.

Legal professional privilege extends to what is known as common interest privilege.  Common interest privilege entails the preservation of legal professional privilege where the third party, recipient or creator of a communication has a common interest in the subject of the privilege with the primary holder of the privilege.

Common interest privilege would apply to communication for example from an insurer to its reinsurer in dealing with an underlying liability claim which they insure and reinsure; the sharing of information by an insured to its insurer, or as confirmed by our courts most recently here in respect of the sharing of privileged communications with a third-party litigation funder. All of those entities have a shared interest in the outcome of the litigation and all have a common interest in ensuring the confidentiality of their communications.

Privilege is not lost where there is limited disclosure for a private particular purpose or to parties with a common interest.

Our courts have held that joint and common interest privilege forms part of South African law by virtue of section 42 of the Civil Proceedings Evidence Act.  Even if it did not our courts have held that common interest privilege would be an appropriate development to the common law because it gives effect to the underlying public policy of legal privilege to encourage and promote full and factual disclosure by clients to their legal advisors when seeking legal advice and to support the functioning of the adversarial system of litigation.

First published by: Financial Institutions Legal Snapshot

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