The District Court of Tel Aviv ("Court") recently
ruled on the applicability and maintenance of attorney-client
privilege to corporate board meeting minutes.
This decision was made in the course of an application for
approval of a class action suit against an Israeli bank and the
bank officers, all of whom allegedly violated their duty to
disclose information to shareholders. This specific issue arose in
connection with a request to view certain board meeting protocols,
which included citations from conversations with the bank's
external and internal counsel ("Protocols").
In its ruling, the Court granted the bank's request to
redact information contained in the Protocols relating to
conversations held with bank attorneys, holding that these
communications fell under the rubric of attorney-client privilege
and were therefore confidential. The Court applied a two-pronged
test: first, whether the conversations were held with bank counsel,
and second, whether the material related to issues clearly part of
professional services provided by attorneys.
The Court held that in the case at hand, attorney-client
privilege applied even where the bank's attorneys did not
directly participate in meetings, but rather their advice was cited
in the Protocols by bank representatives. Furthermore, the
bank's delivery of the Protocols to the Israel Securities
Authority ("ISA") did not invalidate attorney-client
privilege, as the bank expressly indicated to the ISA that it
sought to maintain the confidentiality of the Protocols and the ISA
was obligated to preserve such confidentiality.
The Court stated that in order to determine whether a
party's conduct results in a waiver of attorney-client
privilege, the entirety of the circumstances must be considered,
including whether the client views the relevant information as
confidential, and whether a transfer to an official body was made
with the intention of preserving such confidentiality.
The Court held where it is neither possible based on the facts
nor desirable to infer a waiver of attorney-client privilege, it is
not appropriate to hold that such privilege has been
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In coming to its decision, the Court discussed the two-fold test that must be passed prior to the approval of a distribution of dividends.
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