Attorney-Client Privilege Around the World

Transcription

1 Attorney-Client Privilege Around the World ACC-GNY Ethics Marathon Tuesday, April 1, 2014 Presented By: Sara Altschul, Senior Vice President & General Counsel, PR Newswire Robert Lewis, Partner, Baker & McKenzie LLP David Zaslowsky, Partner, Baker & McKenzie LLP 1

2 Background on the Attorney-Client Privilege The oldest of the privileges for confidentiality known to common law. 8 Wigmore, Evidence 2290 (McNaughton rev and Cum. Supp ) Policy: to encourage full and frank communication between attorneys and their clients and thereby promote broader public interests in the observance of law and administration of justice. (Upjohn Co. v. United States, 449 U.S. 383, 389 (1981)) Cross-Border Privilege Issues 2

3 U.S. Privilege Law: The Basics Attorney-client privilege shields from disclosure: Communications relating to legal advice of any kind Sought by the client or potential client From a professional legal advisor acting in that capacity Where the communications relating to that purpose were made in confidence Unless the protection has been waived Other considerations: The holder of the privilege is the client or potential client The privilege must be claimed The privilege is generally waived by disclosure to a third party The privilege is disregarded as to communications in furtherance of a crime or tort 3

4 U.S. Privilege Law: Corporations Tests for privilege as to communications between company s employee and attorney: State tests: Subject matter test privileged if made within the scope of the employee s responsibilities and at his or her supervisor s direction (used in most states) Control group test privileged if the employee is a high-level employee authorized to act on the company s behalf (used in a few states) Federal standard: Upjohn privileged, given that the employees disclosed information concerning matters within the scope of their duties and disclosed at the direction of their superiors and that the employees were informed they were being questioned in order for the corporation to receive legal advice 4

5 U.S. Privilege Law: In-House Counsel In-house counsel are treated the same as outside counsel But in-house counsel often have a dual role business and legal Privilege likely not to extend to business advice Assess whether the communication s purpose is business advice or legal advice. Legal advice likely protected. But what if the communication involves both? Primary purpose test prevails. (i.e., Which purpose is dominant?) See In re Vioxx Prods. Liab. Litig., 501 F. Supp. 2d 789 (E.D. La. 2007): Document prepared for simultaneous review by non-legal and legal personnel found not to be privileged because not prepared primarily to seek legal advice 5

6 U.S. Privilege Law: The Basics Attorney Work Product: Protects only those documents created in anticipation of litigation Circuits are split over what in anticipation of litigation really means Because-of test : The document would not have been prepared but for anticipated litigation 1st (?), 2d, 3d, 4th, 7th, 8th, 9th, D.C. Cirs. Primary-purpose test : The document was prepared for the primary purpose of aiding in possible future litigation 5th Cir. Work product protection can be overcome by a showing of: (i) a substantial need of the materials in case preparation, and (ii) undue hardship in obtaining the substantial equivalent of the materials by other means Nevertheless, core/opinion work product is not discoverable Waiver occurs when disclosure increases the likelihood of disclosure to one s adversary 6

7 Which Law Applies 7

8 Choice of Law in U.S. Federal Court Fed. R. Evid. 501 states that in general, the basis of subject matter jurisdiction dictates whether federal or state privilege law applies: In federal question cases, the federal common law of privilege applies In diversity cases, the privilege law of the forum state governs This forum state s privilege law doesn t automatically apply in diversity cases the federal court may need to apply the forum state s choice-oflaw principles to determine which state s privilege law applies Fed. R. Evid. 502 applies in all cases in federal court 8

9 U.S. Litigation Implications: Foreign Privilege Law in U.S. Courts How Courts Resolve Touching Base Analysis: Fact specific inquiry Rule of Thumb: Communications usually deemed to touch base with the U.S. where these communications: Are with outside U.S. counsel Relate to the conduct of litigation in the U.S. Relate to prosecution of a U.S. patent application 9

10 Foreign Privilege Law in U.S. Courts If applying the other jurisdiction s law will affect the outcome, the court will apply any of a number of tests, e.g.: 139 Restatement (Second) of Conflict of Laws: Apply factors to identify the jurisdiction with the most significant relationship with the communication Adopt the law of the jurisdiction favoring disclosure, unless special reason or strong public policy dictates otherwise Touching base test: If the communication touched base with the U.S., apply U.S. privilege law But apply foreign privilege law to communications that relate to activity in a foreign country 10

11 Foreign Privilege Law in U.S. Courts (Cont d) Even where touching base test dictates that foreign law be used, some courts still apply U.S. law: U.S. privilege law applies despite finding that, under touching bases analysis, Korean law should apply, because Korean law offered no privilege but did not permit discovery of the documents at issue. Astra Aktiebolag v. Andrx Pharmaceuticals, Inc., 208 F.R.D. 92 (S.D.N.Y. 2002). 11

12 Attorney-Client Privilege Outside the United States 12

13 General comments about the attorney-client privilege outside U.S. Nearly all countries recognize some form of attorney-client privilege though not always by name In common law countries like England (U.K.) the privilege is normally based on case law In civil law countries like France the privilege is typically embodied in statutes Even former communist countries are increasingly recognizing confidentiality between attorneys and clients Cross-Border Privilege Issues 13

14 Warning: For In-House Lawyers The elements of the attorney-client privilege in the United States The elements of the attorney-client privilege (if any) abroad Cross-Border Privilege Issues 14

15 Akzo Nobel Decision The specific recognition of the role of in-house lawyers and the protection of communications with such lawyers was relatively more common today than when the judgment in earlier cases were handed down. Confidentiality of written communications between lawyer and client is an essential corollary to the full exercise of the rights of the defense. NEVERTHELESS, the court rejects the privilege for in-house counsel Attorney-Client Privilege Around the World 15

16 Alleged Lack of Independence Often more independent than outside counsel, whose livelihood depends on pleasing the client. Outside counsel are deemed far more fungible than in-house lawyers when it comes to clients who could shop for legal advice that pleases them. Companies don t hire in-house lawyers because they wish to avoid the law but, rather, hire them to counsel compliance with the law. Attorney-Client Privilege Around the World 16

17 Sample Laws from Around the World Cross-Border Privilege Issues 17

18 Privilege in the European Union Special rules for enforcement of the European prohibition of cartels and prevention of dominant market position (EU competition law proceedings) No privilege for in-house counsel Case C-155/79, AM&S Europe Ltd. v. Commission, 1982 E.C.R Case T-125/03, T-253/03, Akzo Nobel Chemicals and Akcros Chemicals v. Commission, 2007 E.C.R. II Rationale: in-house lawyers lack independence and are subject to the instructions and interests of their company Cross-Border Privilege Issues 18

19 Privilege in England Legal advice privilege analogous to U.S. A-C privilege confidential communications between attorney and client whose dominant purpose is seeking or providing legal advice (litigation or otherwise) case law has limited privilege to cover only communications between attorney and small group of persons in company actually charged with instructing attorneys (Three Rivers (No. 5): case akin to control group test) Also, litigation privilege analogous to U.S. work product protection confidential communications between attorney and client or attorney and third party whose dominant purpose is to be used in connection with actual or contemplated litigation Applies to in-house counsel covers only legal work, not compliance or business administration work but not for investigations (subject to Akzo Nobel decision) Cross-Border Privilege Issues 19

20 Privilege in Canada Legal advice ( solicitor-client ) privilege analogous to U.S. attorney-client privilege Also, functional equivalent of U.S. work product protection available (for documents created for litigation purpose) Privilege applies to in-house counsel Communications must occur in the course of requesting or providing legal advice, and must be intended to remain confidential (as in U.S.) Privilege does not extend to communications outside of role of legal counsel (as in U.S.) Limited document discovery Cross-Border Privilege Issues 20

21 Privilege in France Law recognizes a professional privilege for confidential information/communications No attorney-client privilege for in-house counsel In-house counsel (juristes d entreprise) have confidentiality obligations but only based on employee-employer relationship can be trumped by demands of governmental and investigatory bodies Outside counsel (avocats) have an obligation of absolute professional secrecy and generally cannot disclose information provided by clients cannot be trumped by demands of governmental and investigatory bodies But generally no U.S.-style discovery in France except in criminal issues (where prosecuting authorities have investigation powers, and counsel can be called to testify against company) in civil cases, parties are free to disclose whatever information they choose to support their claims; a party can request that specific evidence be disclosed, but courts cannot order disclosure if other party refuses Cross-Border Privilege Issues 21

22 Privilege in Mexico Concept of attorney-client privilege is not well developed But various laws require attorneys to keep client matters confidential General Law for Professionals provides that all professionals, including attorneys, must keep confidential any communication with their clients Federal Criminal Code contains potential penalties (including imprisonment) for attorneys who disclose client confidential information Mexican Industrial Property Law protects confidentiality of company s trade secrets and proprietary information (intellectual property) No independent attorney-client privilege for in-house counsel, per se Court generally will uphold party s (including in-house counsel s) refusal to produce documents containing, or to provide testimony regarding, confidential client matters Cross-Border Privilege Issues 22

23 Privilege in Argentina All communications between a lawyer and his/her client, including documents, are protected by secreto profesional (privilege) Argentine law does not distinguish between external counsels or in-house lawyers, and therefore all of them are bound by secreto profesional. Clients only can release attorneys from the secreto profesional. Attorneys are thus entitled to invoke the privilege in order to refuse disclosure of information. The secreto profesional can be also be invoked in response to a court request but would not apply to documents prepared by the attorney if they are requested by a criminal court as part of a criminal investigation. Cross-Border Privilege Issues 23

24 Privilege in Brazil The attorney-client privilege is afforded to individuals licensed to practice in Brazil (e.g. registered with the Brazilian Bar Association) There is no distinction between in-house and external counsel Covers all information disclosed to a lawyer or that the lawyer is provided in his or her capacity as legal counsel Privilege is waived if the lawyer is deemed to be engaged in criminal activities with the client (e.g., committing fraud) Cross-Border Privilege Issues 24

25 Privilege in Venezuela Venezuelan regulations recognize the professional privilege. There is no distinction between in-house and external counsel. Breach of the professional privilege without fair cause may bring criminal and disciplinary sanctions. Exemptions from keeping the professional privilege: (i)to avoid or denounce the commission of a crime. (ii)judicially accusation or complaint before the Disciplinary Court of the Bar Association. Cross-Border Privilege Issues 25

26 Privilege in Peru Peruvian Constitution protects professional privilege ( secreto profesional ). There is no distinction between in-house and external counsel. The privilege is perpetual and, in case of collective legal services (Legal firms), includes all its members. Exceptions: Facultative disclosure: (a) with prior written consent of the client, or (b) if the information is required to protect the legitimate interests of the attorney against the government. Compulsory disclosure: if the client poses a risk of causing serious harm (physical or psychological injuries, or death) to any person. Cross-Border Privilege Issues 26

27 Privilege in the Netherlands Advocates admitted to the Netherlands bar have a professional pledge of secrecy and general privilege of non-disclosure Privilege does not apply to in-house counsel not covered by the code of professional conduct, and therefore cannot take advantage of privilege must disclose communications with corporate employers and directors upon request; may not object to the search and seizure of evidence on employer s property; and can be called to testify against employer However, now possible for in-house counsel to be admitted to Dutch bar and have same communications privileges (including invoking privilege) as outside counsel, provided they handle legal work only and sign covenant re independence Cross-Border Privilege Issues 27

28 Privilege in Germany Professional privilege (confidentiality) for outside attorney-client communications In-house counsel? debatable, but... if not admitted to bar (not an unusual situation), no privilege if admitted to bar, and information is obtained in the course of providing legal advice, privilege should attach but if information obtained in course of management, accounting or other duties, no privilege in-house counsel must maintain separate offices with sole access But no U.S.-style discovery (only limited duties to produce documents), so not necessarily critical in civil litigation context Cross-Border Privilege Issues 28

29 Privilege in Austria No privilege for in-house counsel not considered professionals (Rechtsanwälte) subject to disciplinary control of the bar association privilege (Anwältsprivileg) applies only where the lawyer is independent of and not under control of the client; in-house counsel are seen as indistinguishable from the client, as part of management General duty of loyalty an employee owes to an employer, under Austrian labor law, may require in-house counsel to maintain the secrecy of conversations between it and officers, directors and employees of the company though in government criminal proceedings and civil proceedings related to financial matters (tax, securities, etc.), the duty of loyalty is trumped No U.S.-style discovery Cross-Border Privilege Issues 29

30 Privilege in Switzerland Traditionally, no privilege for in-house counsel, but new laws (eff. 1 January 2011) codify privilege: extensive debate However, information disclosed to in-house counsel may be safeguarded by principles of business secrecy (professional confidentiality) Nonetheless, Swiss courts can compel production of documents drafted by, or testimony of, in-house counsel Privilege does (did) not extend to material in client s possession External counsel liberally used No U.S.-style discovery Cross-Border Privilege Issues 30

31 Privilege in Sweden No privilege for in-house counsel Alternative method of protecting the information is to use outside counsel (advokat), provided they are members of the Swedish Bar Association No U.S.-style discovery Cross-Border Privilege Issues 31

32 Privilege in Russia Attorney-client privilege is available only for advocates, lawyers who have been admitted to the Russian Bar. However, lawyers admitted to the Bar cannot be employed by companies or law firms Since most lawyers are not admitted to the Bar, privilegelike protection is contractual vis-à-vis third parties Law firm lawyers (not advocates) must disclose information requested by regulatory or investigative state body A-C communications held at client s premises not protected Cross-Border Privilege Issues 32

33 Privilege in Saudi Arabia No privilege for in-house counsel, per se though Labor Regulations do provide an employee duty not to reveal the employer s secrets For outside counsel (advocates), the Saudi Advocacy Law (Article 23) regulates the conduct of lawyers and covers what is known elsewhere as the attorney-client privilege Regulation published on 24/08/1422 H. (corresponding to Nov. 9, 2001 in the Gregorian calendar) Regulation/privilege interpreted under Islamic law (Shari ah) Cross-Border Privilege Issues 33

34 Privilege in Australia Communications protected under legal professional privilege ( advice and litigation ) analogous to U.S. attorney-client privilege Generally applies to in-house counsel same as external lawyers lawyer must be acting in legal (not commercial) capacity dominant purpose of communication must be legal factors courts have looked at to assess capacity and independence include current practicing certificate, job title, physical location within organization, separation of legal department, remuneration incentives, etc. Cross-Border Privilege Issues 34

35 Privilege in Hong Kong Legal professional privilege is a constitutional and substantive common law right (with an advice privilege and a litigation privilege ) Same privilege applies to in-house counsel (acting in legal advisor capacity, relating to legal matters, etc.) No Hong Kong case decisions dealing directly with legal advice privilege in context of in-house counsel Hong Kong courts likely to consider and follow English common law authorities and principles (example: Three Rivers) Cross-Border Privilege Issues 35

36 Privilege in Japan No concept of attorney-client privilege exists However, lawyers admitted in Japan (Bengoshi) and foreign law business lawyers registered in Japan (Gaikokuho Jimu Bengoshi) are statutorily obligated to hold in confidence secret information obtained during the lawyer-client relationship This confidentiality protection does not belong to client; rather, Bengoshi or Gaikokuho Jimu Bengoshi may invoke protection to avoid having to testify as a trial witness in criminal case, or having to produce documents in civil case In-house counsel entitled to invoke protection only if they possess Bengoshi or Gaikokuho Jimu Bengoshi status Also, Japanese Civil Procedure Code permits civil witness to refuse to testify regarding professional secrets, so long as these matters are still considered secrets (e.g., the trade secrets of the corporate employer) Cross-Border Privilege Issues 36

37 Privilege in China Attorney-client privilege not a recognized principle under the laws of the People s Republic of China But Law of Attorneys and PRC Code of Ethics for Attorneys require attorneys to keep confidential documents and communications with a qualified lawyer (and state secrets) Attorneys can be forced to testify, or lose license or go to jail In-house counsel are viewed differently than outside qualified lawyers and have lesser confidentiality obligations and protections Foreign lawyers in China are not differentiated Law may be becoming more receptive of A-C privilege Cross-Border Privilege Issues 37

38 Privilege in India Professional communications between client and lawyer made with a view to obtaining legal advice are privileged Also, legal professional privilege attaches to documents prepared in anticipation of litigation Based on Indian Evidence Act of 1972 and English precedents (relied on by Indian courts in interpreting the Evidence Act) prohibits barrister, attorney, pleader or vakil from disclosing client communications and confidences clients cannot be compelled to produce confidential communications between them and their legal professional advisor Communication must be for purpose of seeking legal advice (of employment as a lawyer ); or based on or relating to litigation or anticipated litigation or regulatory action Cross-Border Privilege Issues 38

39 Privilege in India (cont d) Ambiguous issue re in-house counsel no clear statutory provision 1981 Bombay High Court case held that salaried employee who advises employer on legal questions gets same protection as other lawyers (who appear in courts of law) under Sections 126 and 129 of Evidence Act 1991 case held that in-house counsel is not an advocate for purposes of Indian Advocates Act in context of appointment of advocate or pleader to judge position 2001 Supreme Court of India case held that an advocate is one who pleads in a court of law; employee law officer in government department not entitled to register as advocate (fact-specific decision) Cross-Border Privilege Issues 39

40 Privilege in India (cont d) Ambiguous issue re in-house counsel (cont d) 2002 Bombay High Court case declined to decide whether privilege applies to in-house counsel, on objection made that internal legal department person not shown to be qualified to give legal advice, i.e., not an advocate (as defined in the Advocates Act) 2009 Bombay High Court case, in context of foreign law firms setting up liaison offices in India, held the Advocates Act would extend to litigious (i.e., advocacy) and non-litigious (e.g., advisory, drafting, opinions) matters, but no express judgment rendered re in-house counsel Cross-Border Privilege Issues 40

41 Map of Judicial Systems Cross-Border Privilege Issues 41

42 Practical Considerations for In-House Counsel 42

43 Planning for Protecting Attorney-Client Communications in the Cross-Border or International Context a. Recognize the issue b. Limit written communications ( !) c. Avoid the in-house pitfall: Communicate critical advice through local outside counsel, where necessary d. Contractually avoid litigation in unfavorable forum Cross-Border Privilege Issues 43

44 a. Recognize the issue Do not assume that the evidentiary and discovery rules you are familiar with here apply everywhere Become familiar with variations in the scope of the attorney-client privilege available for in-house counsel where your company is doing business and you are advising your client(s) Train your in-house colleagues Educate your client(s) Take protective steps, balancing business realities and legal risks Cross-Border Privilege Issues 44

45 b. Limit written communications ( !) Oral communications are the most secure and least expensive way to protect sensitive advice Yet, logistics of conference calls (versus s) across multiple or distant time zones can be difficult, oral communications may not be as effective as written communications (re important policies), and you might desire the clarity and protection of a written record Require destruction of written notes or advice? The tradeoffs must be evaluated Cross-Border Privilege Issues 45

46 c. Communicate through local outside counsel An effective way to protect sensitive legal communications, because every jurisdiction with the privilege honors the confidentiality of communications between private practitioners and their clients But hiring outside counsel can add expense and requires in-house counsel to invest time managing counsel Cross-Border Privilege Issues 46

47 c. Communicate through local outside counsel (cont d) Where litigation appears likely, hiring outside counsel becomes more essential The degree of risk must be assessed Cross-Border Privilege Issues 47

48 d. Contractually avoid unfavorable forums Forum selection and choice of law clauses can be drafted to make it more likely that disputes will be litigated in jurisdictions that extend the privilege to in-house counsel But forum selection and choice of law clauses will not protect against non-contractual civil and criminal actions in foreign jurisdictions Your licensing, distributor, vendor, employment and other contracts may provide an opportunity for preventive protection Cross-Border Privilege Issues 48

49 Takeaway re Treatment of In-House Counsel Internationally Depending on the foreign jurisdiction, the attorneyclient privilege may or may not extend to in-house counsel The parameters of the privilege for in-house counsel available internationally correspond with the essential elements necessary for the privilege to apply in the United States, but variations among national jurisdictions can range from minor to drastic Cross-Border Privilege Issues 49

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