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Alex J.
Alex J., Solicitor
Category: Law
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Experience:  Solicitors 2 years plus PQE
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Does Litigation privilege extend to client payments into a

Customer Question

Does Litigation privilege extend to client payments into a third party tax consultants business account?
We are applying for finance and need to show business accounts which hold client names. Does Litigation privilege extend to names on a bank account?
Submitted: 2 years ago.
Category: Law
Expert:  Alex J. replied 2 years ago.
Hi,

Thank you for your question and welcome.

My name is AJ and I will assist you.

Litigation Privilege relates to the right of a client to obtain legal advice without being forced to disclose it. It must satisfy the following criteria:
- Be confidential;
- Is a correspondence between either the lawyer or the client and a third party, or be a document created by or on behalf of the client or his lawyer.
- Where the dominant purpose of litigation; and
- The litigation concerned must be pending, reasonably contemplated or existing.

From what you have described this does not sound like it would be covered by this type of privilege.

Do you have any further context you can provide to me?

I look forward to hearing from you.

Kind regards

AJ
Customer: replied 2 years ago.

I have a property investment company and am investing with a family member that is a self employed indirect tax consultant representing clients that are being investigated for not paying VAT etc.


 


The application for bridging finance to purchase a property is going in his name and hence the lender requires bank personal and business bank statements.


 


It is making applying for finance very difficult as we are unsure if showing bank statements showing client payments to the business (i.e. identifying that they are going through litigation) breaks litigation privilege.


 


My understanding was that it covers sensitive communications but was unsure if it extended to the fact that they are being represented.


 


Thanks for your help

Expert:  Alex J. replied 2 years ago.
Hi,

Thank you.

Does it actually have any relevance to the litigation in hand?

If this is happening after the litigation is contemplated then why would it even be relevant to this advisers litigation?

Kind regards

AJ
Customer: replied 2 years ago.

Hi,


 


Thanks Alex.


 


The payments are for litigation that is ongoing.


It has no details of the litigation, just the clients name showing on the bank statement that they are making payments to the business.


 


We tried sending statements with the names blanked out but this has raised questions and problems with the lenders.


 


Thanks again

Expert:  Alex J. replied 2 years ago.
Hi,

Thank you.

The client that is making the payment are they party to the litigation?

I would not say that payments made for funding litigation need to be disclosed but they are potentially champertous.

The payments you are making are funding property so these have no baring on the litigation?

Also what is the likelihood the bank will be dragged into the claim?

Kind regards

AJ
Customer: replied 2 years ago.

The client's making payments are party to litigation.


 


Could you just explain further what you mean by potentially champertous?


 


The statements are only being used to evidence income and mortgage payments out as with a normal mortgage application or loan. They have no relation to any litigation proceedings. The lender for the investment property who the application is going through has no or will never have any involvement with any litigation proceedings relating to the clients showing on the business account.


 


Thanks Alex

Expert:  Alex J. replied 2 years ago.
Hi,

Thank you.

Potentially funding some ones else's litigation falls under the law of Champerty, which can be illegal. However if they are party to it then it is probably not relevant.

If the statements have no relation to the litigation proceeding then they wont fall under the disclosure obligations of the disclosing party anyway - See the Civil Procedure Rules Part 31 - these clearly describe disclosure obligations. In any event it is not the bank that you need to censure them for it is the court.

I look forward to hearing from you.

Kind regards

AJ

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