CH230320 - How to do a compliance check: information powers: rules that apply to all notices: resolving disputes about legal professional privilege: process when a notice is given at an inspection: the information notice
The person may consider that some or all of what you are asking for in your notice is privileged, see CH22240 about legal professional privilege. You can only see privileged material if the person chooses to waive their privilege and let you see it.
Where you are seeking documents or information that may include privileged items, the notice should contain paragraphs along the following lines.
You do not have to produce documents or provide information for which you can successfully claim legal professional privilege. You can choose to waive privilege and give me all the things in the notice. It will assist progress of the compliance check if you do but you would be giving up your right to keep the information or documents completely private.
Legal professional privilege is a complex area of the law which only properly applies in limited circumstances. I may wish to challenge any claim to legal professional privilege on the basis that I disagree that the documents or information being withheld properly fall within the scope of the privilege.
You should include the concept of waiver in your notice so that the person has a fuller explanation of their rights. You should not treat a refusal to provide privileged information as a lack of co-operation. However, the voluntary provision of such information could earn credit to be set against poor co-operation in another aspect of your compliance check. Where penalties are likely, you could encourage waiver by telling the person that it could increase the quality of disclosure reduction and lead to a lower penalty.
See CH230330 for guidance about the inspection.