Charities and internal investigations
A sound understanding of key legal professional privilege issues provides a strategic advantage allowing, if used adequately, a 'client' and its/his lawyer to refuse to disclose privileged documents and/or communications and/or to answer questions relating to their subject matter.
This almost absolute legal right applies for instance in the context of an existing, pending or reasonably contemplated litigation and/or a regulatory investigation.
Why understanding privilege issues matters
Different types of privilege apply to documents/communications in the UK, US, EU jurisdictions and elsewhere. Privileged documents should not be circulated to lawyers outside the company’s jurisdiction without first understanding the differences existing between these various concepts and ensuring that there are adequate privilege rules in force in that other jurisdiction.
Privilege does not protect all types of documents/information. It depends for instance on:
Privilege is not likely to apply to a whole company or department seeking legal advice. It may only apply to the defined 'client' team. Such client team needs to be clearly defined from the outset.
The privilege status may be easily waived or lost thus exposing weakness in a party’s case. It is therefore important to know how to retain it.
There are lots of practical tips that in-house lawyers can use to avoid losing privilege. In-house lawyers should for instance be aware of the best practice related to:
Given the increasing number of multi-jurisdictional litigation (including anti-trust proceedings) and investigations in the UK and US, companies having business connections in the US should be aware of the differences between the US and UK privilege concepts and instruct UK/US local lawyers from the outset to advise on related disclosure issues and communications with third parties and foreign in-house/external lawyers.
Many consider that the disclosure in the US of a privileged communication to a third party (e.g. a regulator), even if made abroad and on a confidential basis for a specific purpose, may lead to the complete loss in the US of the privilege status of the entire subject matter of a document and thus its potential use by third parties and/or authorities in subsequent litigation/investigation (i.e. the US concept of selective waiver differs from the UK concept).
Companies’ activities may have implications in several jurisdictions and thus be governed by different sets of national legal rules (e.g. the French concept of privilege differs from the UK concept in that communications exchanged between in-house lawyers and their corporate entities are not protected by privilege) but also by “supranational” regulations (e.g. EU legislation regarding European Commission antitrust investigations). This may be particularly challenging in the context of a litigation or investigation covering several jurisdictions. Companies should therefore instruct local lawyers in the respective jurisdictions so that related issues are understood from the outset and strategically coordinated.
Courts and enforcement authorities from the various EU jurisdictions interpret and enforce privilege rules differently. Privileged documents under English law may become disclosable before a foreign Court depending on the national rules applied by that Court.
Special privilege rules apply in the context of European Commission Investigations. Since the Akzo Nobel case in 2010, privilege does not apply to communications between in-house lawyers and their corporate entities in the context of European Commission investigations.
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