Australia: Legal professional privilege in the United Kingdom

Global boardroom risk solutions
Last Updated: 29 July 2014
Article by Frank Thompson and Laura Atherton

INTRODUCTION

The term "privileged" is much misunderstood and misused. Privilege within the United Kingdom is a powerful tool. When used properly, it provides the right not to disclose a document or communication to anyone. The privileged status of a document lasts forever and for all purposes unless and until that privilege is consciously waived or inadvertently lost.

WHO IS AFFECTED?

In civil proceedings, the privileged status of documents is most relevant when looking at disclosure when the other side, be it the claimant or the defendant, wants to see the relevant evidence in possession. In criminal and regulatory proceedings, it is most relevant when a regulator or prosecutor is attempting to compel the disclosure of material that may be used against you in proceedings or to further their enquiries.

SUMMARY

Legal advice privilege and litigation privilege are the two distinct types of privilege under English Law. Those wishing to assert either should consider which type they are entitled to claim.

Legal Advice Privilege (LAP)

Definition

LAP applies to communications between a lawyer and their client in relation to a transaction or circumstance in which the lawyer has been instructed to obtain legal advice in "the relevant legal context."

Important Considerations

  • Interacting with a lawyer is not sufficient to establish privilege over related communications and documents. The lawyer must be providing legal as opposed to commercial or other general advice.
  • Communication between lawyers and third parties such as accountants and auditors is not applicable.
  • It is best practice to identify a small subgroup of individuals who canbe considered the client for the purposes of LAP. Create a non-privileged document which contains a non-exhaustive list of the individuals that are defined as the client, leaving room for the possibility of change as matters develop.
  • Communications between employees of the company (who are not defined as the client) and the lawyers, for fact finding purposes, can not be classified as privileged.

Litigation Privilege (LP)

Definition

LP applies to communications between a lawyer and a client or client's representative and with any other third party (including experts and witnesses) where those documents and communications are made in connection with and for the primary purpose of existing or contemplated criminal, regulatory, or civil legal proceedings.

Important Considerations

  • LP does not make a document which was not privileged when created privileged. Therefore a communication which was subject to LAP will continue to be privileged even though it may later be relevant evidence in a litigation or prosecution. However, a communication which is not LP or LAP at the time it was created will not become so at a later date.
  • Consider where regulators and prosecutors are likely to seek disclosure of documents and communications created by the company during an internal investigation. One of the most common documents requested are interview notes. A verbatim interview note taken during an internal investigation will not necessarily be subject to privilege and so in order to have the best chance of asserting LP over interview notes, an organization may wish to ensure that:
    • the notes are taken by a lawyer
    • the notes are not drafted verbatim, but contain also the lawyer's impressions and opinions for the purposes of advising the client
    • the notes record the contemplation of proceedings or another basis on which LP is founded and are clearly marked as privileged

Waiver of Privilege

Organizations should maintain privilege unless there is a compelling reason to waive it. Once waived, privilege cannot be reclaimed.

The more widely electronic or hard copies of privileged documents and communications are distributed outside of the organization, the more likely it is that a court will consider that privilege has been waived.

Privileged documents can be disclosed to a third party for a limited purpose while retaining the ability to assert privilege in the future against the same party or the rest of the world. However, this presents risks, both because the organization may misjudge and be deemed to have completely waived privilege, and also because in some jurisdictions, limited waiver is not recognized.

Joint Privilege

Joint privilege arises when a lawyer is jointly retained by more than one client. It has important practical implications—none of those entitled to the privilege can waive the privilege without the other's consent; nor can they assert privilege against the other if a dispute arises in the future.

A recent case has clarified that in asserting joint privilege, one must have been the lawyer's client at the time the advice was received, even if there was no express retainer.

Legal Professional Privilege Across the World

Do not assume that the rules of privilege that apply in the United Kingdom apply elsewhere. A document protected by privilege in the United Kingdom may not be so protected if it travels abroad, electronically or physically.

The privilege which can be asserted in relation to communications between in-house counsel and the company varies throughout Europe. There is no privilege for in-house counsel's documents and communications under the EU Commission in regards to investigations and enforcement actions. Therefore, when considering a possible breach of EU competition law, outside counsel should always be used to investigate and advise.

There is also no privilege in China, although some limited protection is growing in the sphere of criminal defense.

Conversely, U.S. legal privilege exists to protect not only the provision of legal advice but also the provision of information to the lawyer. Employees who give information to the company's lawyer are treated as the client for the purposes of privilege. Recently, a U.S. court found that documents created in an internal investigation and produced by non-lawyers were privileged as long as one of the significant purposes of the investigation—but not necessarily the only—was to obtain legal advice.

CONCLUSION

In the event of a possible incident or company policy/legal breach, a director, officer, employee, or individual should notify their lawyer immediately, and if at all practical, do so verbally. They may refer to an investigation guide or a crisis management plan, if available, for the practical steps to take.

Notifying lawyers at the earliest opportunity will afford the best possibility that any investigation can be conducted maintaining the maximum potential privilege over communications and documents created.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

K&L Gates has been awarded a 2012 EOWA Employer of Choice for Women citation acknowledging our commitment to workplace diversity.

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