LPP applies to: (i) confidential information passed to a lawyer by a client or a potential court witness, to enable the lawyer to advise and act for the client (ii) the advice provided by the lawyer.
LPP has two limbs: legal advice privilege (LAP) and litigation privilege. LAP depends on there being a confidential relationship between a client and their lawyer. The overall justification for LPP is its importance to the proper administration of justice: it is in public interest that an individual should have the right (that is, not strictly a ‘privilege’) privately to ‘make a clean breast’ of a matter to a legal adviser. The resulting right to privacy is the right of the client, not of the lawyer.
Therefore, a lawyer must be able to give his client an unqualified assurance that whatever the client tells him in confidence will never be disclosed without his consent. That assurance is absolute, subject only to certain qualifications.
The ‘iniquity' or fraud exemption is one of those qualifications: for example, where a lawyer learns of an illegality or commission/possible commission of a criminal offence, he/she should report it to the appropriate public authorities.
If the ‘iniquity exception’ applies, the confidentiality of LAP cannot be used to enable a client to obtain a lawyer’s advice to further a dishonest intent. If documents show a dishonest intent, for example tax evasion, then LAP will not apply in the first place.
The question that arises from the leak of the Panama papers is the following: has the leaker of the information in any way validly breached the individual client’s confidentiality (whatever one may think of that individual’s tax affairs or other dealings)? What is the position if LAP documents are seen by a third party (such as family lawyers handling the Panama papers)?
Whatever the law may be on confidentiality in Panama, if stolen or leaked documents which in England would be covered by LAP were to come before an English court, the justification for referring to them is likely to be fraud. If the fraud allegation (as in the application to set aside a financial order in the English matrimonial proceedings in Sharland ) is based on another fraud – eg. the theft of confidential documents in Panama – the lawyers pleading the case will need to be very certain of the evidence of fraud in their client’s case.
Legal professional privilege (LPP) is in the news: there is talk of its definition being reviewed in the Investigatory Powers Bill (see clause 25); and its application to the Panama papers has raised questions of how it applies to leaked documents. On 7 April, the Gazette reported two family lawyers as saying that information from the Panama leaks could be used to set aside court orders (per Sharland v Sharland  UKSC 60). But to what extent are any of the leaked documents covered by LPP – in this case, its major branch, legal advice privilege (LAP)?