What it means for a UK law firm
Legal professional privilege in England and Wales has two heads, legal advice privilege and litigation privilege, as the Court of Appeal summarised in SFO v ENRC [2018] EWCA Civ 2006. Legal advice privilege protects confidential communications between a client and their lawyer made for the purpose of legal advice. Litigation privilege protects confidential communications with third parties made for the sole or dominant purpose of adversarial litigation that is in progress or reasonably in contemplation.
Legal professional privilege depends on confidentiality: privilege attaches only to confidential communications, and it can be lost if confidentiality is lost. That is why the use of AI tools raises privilege questions. A firm that puts privileged material into an AI tool needs to know whether the provider keeps it, who can see it and whether it is used to train models.
Legal professional privilege and AI were addressed in UK v Secretary of State for the Home Department (AI hallucinations; supervision; Hamid) [2026] UKUT 81 (IAC). The Upper Tribunal said that uploading confidential documents into “an open-source AI tool, such as ChatGPT” places the information in the public domain, breaching client confidentiality and waiving legal privilege. The Tribunal contrasted this with closed-source AI tools that do not place information in the public domain, naming Microsoft Copilot as an example. The remarks were made in a professional standards hearing rather than as a ruling on privilege law, but they show how the Tribunal views the risk.
Example
Illustrative scenario
A fee earner pastes counsel's advice on the merits of a claim into a free consumer chatbot to produce a summary for the client. The firm now has to consider whether the advice has been disclosed to a third party, whether privilege is at risk and whether the incident must be reported. Had the firm provided an approved tool on suitable contractual terms, the fee earner would have had no reason to use a consumer chatbot.
How Chancery handles it
Chancery only works with AI providers who guarantee that a firm's data is not used to train or improve their models and that messages sent to and returned from the AI are not retained; Part 1 of our series on using AI safely explains why. Each firm has its own separate database; see Security.