Claims consultant’s documents and why you might have to disclose them

The use of claims consultants within the construction industry is not uncommon in particular when it comes to giving advice in relation to the overall progress of a contract or possible adjudication proceedings. However, any party who instructs a claims consultant needs to be aware that if there is a subsequent dispute, any advice provided by the consultant may have to be disclosed to the other side. 

This was confirmed in the recent decision of Walter Lilly & Company Limited v McKay and Another. In this case, the client, Mr McKay had engaged a developer, DMW to procure the construction of a house. They in turn instructed Walter Lilly, the contractor. 

Work started in 2004 but by June 2006 there were substantial delays. The architect granted an extension of time until February 2007 but before that had expired, the client engaged Knowles Limited, a claims consultant, to provide "contractual and adjudication advice." Walter Lilly subsequently issued proceedings against both the client and the developer. The Judgement does not set out the nature of the claim but it does deal with the issue of the whether the claims consultant`s document were privileged from disclosure on the grounds that they attracted legal advice privilege, which protects advice given by lawyers to clients 

At the outset of the proceedings some of the claims consultant's documents were provided to Walter Lilly and a further three folders were provided just before trial. However, on the first day of trial, Walter Lilly made an application requiring disclosure of all correspondence with or documents created by the claims consultant. The application was defended on the basis that these documents had the benefit of legal professional or legal advice privilege and were therefore not disclosable. The Judge did not agree and ordered disclosure of the documents.

When making that decision, the Court took into account a number of factors including the nature of the claims consultant`s retainer which had been to provide "contractual and adjudication advice", that the claims consultant had not held itself out as a firm of solicitors or group of barristers, that the claims consultant provided advice relating to the architect`s conduct and management of the project and that it was immaterial that the advice came from two people who had trained as barristers, there being no evidence at the present time that they were practising barristers. 

What is important to note from the decision is that the Judge did not consider whether litigation privilege applied i.e. documents prepared for the purposes of litigation, or whether the claims consultant`s documents in connection with adjudication proceedings were privileged. The Judge said this was for another day and it may be that a Judge would come to a different decision in respect of these types of documents. 

What is clear is that this decision is a stark reminder for those involved in the construction industry that claims consultant`s advice may subsequently have to be disclosed. To try and minimise this risk, you should consider carefully the terms of any retainer. Are they to be retained to provide legal advice or project management services? If in any doubt, you should consider the appointment of a practising solicitor or barrister though whom such advice can be sought. 

Posted on: 05/04/2012

This article is for general guidance only. It provides useful information in a concise form. Action should not be taken without obtaining specific legal advice.

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