Privilege Issues in Cross-Border Investigations
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In the United States, the attorney–client privilege allows a client and his or her attorney to keep confidential communications made to each other in confidence for the purpose of seeking or providing legal advice. The attorney work-product doctrine protects from disclosure information prepared by or for an attorney in anticipation of litigation.
Cross-border investigations implicate both concepts. Attorneys from different jurisdictions will likely provide advice and create work product during the course of the investigation. Protecting, to the extent possible, the confidentiality of legal advice and attorney work product is essential. While most jurisdictions recognise the confidential nature of attorney–client communications to some extent, the scope and nature of that recognition differ. For example, in common law countries such as the United States and the United Kingdom, confidential attorney–client communications are treated as a privilege through which the client can prevent disclosure. In civil law counties, however, the obligation to maintain confidentiality of such communications is imposed on the lawyer as a duty. The information is not privileged from disclosure; rather, the lawyer is under a duty not to disclose the information. Some jurisdictions extend the attorney–client privilege or duty of confidentiality to in-house counsel and foreign lawyers; others do not. Work product may be protected in some jurisdictions, but not others. Exceptions to the privilege or the duty of confidentiality also vary among jurisdictions. Failing to recognise and plan for those differences at the outset of any investigation can result in potential loss of the protection of the privilege, creating issues that could have been avoided.
In this chapter, we discuss the extent to which key jurisdictions recognise the attorney–client privilege (or duty of attorney confidentiality) and protection of attorney work product. We also address related issues, such as whether the privilege is recognised for in-house counsel and foreign lawyers and how to manage conflicting privilege laws. This chapter is only a starting point; these issues are complex and should be analysed in depth at the beginning of any cross-border investigation.
Basic forms of privilege in major jurisdictions
In the United States, the attorney–client privilege is an evidentiary privilege derived from the common law. The privilege creates a narrow carve-out from the general discovery rule that each party is entitled to the other side’s evidence. In essence, attorney–client privilege protects confidential communications between the client and the attorney for the purpose of seeking or obtaining legal advice. While either the client or the attorney can assert privilege, the privilege exists ‘for the benefit of the client’. Maintaining the confidentiality of the communication is critical to protecting the privilege. Once a communication between a lawyer and the client or potential client becomes broadly known, the communication is no longer considered privileged. Generally, sharing privileged information with a third party not within the scope of the privilege results in the loss of the protection of the privilege.
When the attorney–client privilege applies, the communication is generally considered sacrosanct and neither the client nor the attorney can be ordered to disclose its contents. With limited exceptions, the privilege survives after the attorney’s representation of the client ends, and even beyond the client’s death. The privilege only extends, however, to information given for the purpose of obtaining or receiving legal advice. Information communicated to the attorney that can be learnt from another source or information that is purely factual in nature is not privileged. In determining whether a communication was made for the purpose of seeking or obtaining legal advice, courts assess the primary purpose of the communication – namely, what the motivation behind the communication was. Only a communication made for the primary purpose of seeking or obtaining legal advice is privileged. Information cannot be shielded from discovery simply because it is communicated to an attorney.
US federal and state law also protect work performed by an attorney, or his or her agent, in anticipation of litigation or a controversy from discovery, absent substantial need or inability to obtain the information elsewhere without undue hardship. Attorney work product includes fact work product and opinion work product. Fact work product involves factual information prepared by the attorney (or at his or her request) in anticipation of litigation; opinion work product contains the attorney’s mental impressions, conclusions and opinions regarding the litigation. Opinion work product receives greater protection than fact work product, but both are generally protected from discovery by an adverse party. While the protections offered by the attorney work-product doctrine may appear to be broader than the attorney–client privilege since the protection extends beyond communications between an attorney and the client by protecting an attorney’s ability to prepare his or her case, the protection generally does not extend to work product that was not prepared in anticipation of litigation.
Both attorney–client privilege and work-product protections will usually apply to internal investigations conducted by counsel. As an initial matter, it is well established that a corporation can assert the attorney–client privilege in the same manner that an individual can. Thus, the attorney–client privilege extends to communications between attorneys and employees of the company, as well as communications with non-attorneys acting on the attorneys’ behalf, over the course of the investigation, provided the investigation is being conducted to provide legal advice to the company. Notes or summaries of witness interviews (and documents reflecting such information) may also be protected by both the attorney–client privilege and the attorney work-product doctrine, particularly if the notes or summaries also contain the thoughts or mental impressions of the attorneys. Other materials created over the course of the investigation may also be protected by the work-product doctrine. US regulators and plaintiffs’ attorneys are, however, becoming increasingly aggressive in challenging the boundaries of these privileges in the investigations, particularly on the basis of whether ‘litigation’ was anticipated at the time the investigation was conducted.
Similar to the United States, the United Kingdom also recognises two main categories of privilege – legal advice privilege and litigation privilege. Legal advice privilege mirrors the attorney–client privilege in that it protects confidential communications between a lawyer and his or her client that were exchanged for the dominant purpose of giving, seeking or receiving legal advice. The protection belongs to the client and also extends to the lawyer’s notes and work papers to the extent they betray the trend of legal advice.
For a communication to be privileged, it must remain confidential. Where a document or communication has not been kept confidential – for example, because it has been disseminated to the public – it cannot be privileged. However, English law permits for disclosure to a third party for a limited purpose and subject to obligations of confidentiality. In such circumstances, privilege in the entirety of the document is not lost against the rest of the world since confidentiality is maintained, though it is waived in respect of the party to whom it is disclosed for the relevant limited purpose.
Legal advice privilege applies not only to the communications giving, seeking or receiving legal advice but to the continuum of communications ‘aimed at keeping both [lawyer and client] informed so that advice may be sought and given as required’. Accordingly, factual updates between a lawyer and a client where no specific legal advice is sought or given may still be protected by legal privilege if exchanged in furtherance of giving or seeking advice. Each communication will be considered independently, and there may be communications within a particular chain that fall outside the continuum of communication where the dominant purpose is not to give, seek or receive legal advice, or to keep both the lawyer and client informed so that advice may be sought and given as required.
Litigation privilege protects confidential communications between a lawyer and his or her client, or either of them and a third party where the dominant purpose is giving, seeking or receiving legal advice, or seeking or obtaining evidence or information to be used in or in connection with litigation or adversarial proceedings that is reasonably contemplated. Litigation privilege is both broader and narrower than legal advice privilege. It is broader as it can protect communications between a lawyer and a client, or either of them and a third party – assuming other elements of the test are met. However, for it to apply, there must be a reasonably contemplated proceeding.
The extension of the litigation privilege to communications between a lawyer and a client or a third party has useful benefits within the context of an internal investigation. For example, while interviews with employees within a corporation that do not fall within the definition of ‘client’ (and notes thereof) are not protected by legal advice privilege, they can be protected by litigation privilege. This may also be the case for forensic reports prepared by non-lawyers, such as accountants, where the dominant purpose of receiving such reports or evidence is for use in the litigation and for rendering legal advice to the client. This can include advice to head off, avoid or even settle reasonably contemplated proceedings as much as advice given for the purpose of resisting or defending such contemplated proceedings. The privilege does not apply to communications made for conducting litigation in a broader sense – such as emails comprising internal discussions of commercial settlement proposals.
Further, the litigation in contemplation must be adversarial, and not investigative or inquisitorial. In the context of investigations, there is little guidance on when a regulatory investigation could be deemed to cause a client to contemplate merely investigative or inquisitorial proceedings, and not an adversarial proceeding. But where the investigatory authority has powers to prosecute, fine or censure, and the subject of those investigations has the right to challenge the actions of the authority, for example in court or through some other procedural route, there may be an argument to say that the opening of an investigation causes a company to contemplate adversarial proceedings. Ultimately, the question will be resolved based on the facts and circumstances of each case.
The concept of legal professional privilege in the majority of EU Member States applies to lawyers who are members of the local bar associations of that particular country. In the European Union, the scope of professional privilege varies substantially among EU Member States and is narrower than in common law countries. It typically derives from the obligation of the lawyer to preserve professional secrecy regarding any facts known to them in connection with their provision of legal services. This civil law concept derives from obligations contained in the regulation of lawyers by their local bars.
While the laws of legal professional privilege have not been harmonised throughout the European Union (but rather individual EU Member States have their own national laws), the general concept of professional privilege in EU Member States lies in protecting certain data and documents exchanged between the lawyer and the client from being disclosed in legal proceedings. This may relate to any form of communication exchanged or any type of advice provided to the client by the lawyer, sometimes even if there is no contract for legal services. Legal professional privilege is not limited in time and is also applicable in negotiations or any pretrial stage. Most important is the protection against seizure of documents on the premises of a lawyer, which covers all information provided between a client and a lawyer that is related to the proceedings and that was communicated either before or after the commencement of proceedings.
In the context of civil litigation and administrative investigations run by authorities, a lawyer may not give evidence relating to advice given to a client on the basis of their obligations of confidentiality under internal bar regulations. In the context of criminal investigations, legal professional privilege is derived from the prohibition of attempts to circumvent a lawyer’s right to refuse to give evidence on matters subject to legal professional privilege. It covers communications between a client and their lawyer and is not limited to communications between a lawyer and his or her client after a criminal investigation has been initiated. Legal professional privilege protection begins when a client consults their lawyer about the matter, even if the authorities do not have any evidence against the client at that point. Legal professional privilege remains in place even after the termination or conclusion of the lawyer–client relationship.
In some jurisdictions the scope of professional privilege relates only to criminal proceedings and does not apply to litigation or arbitration proceedings. Some countries also limit professional privilege to knowledge and documentation being in the possession of the lawyer. In such jurisdictions documents relevant to a case are protected only when they are kept by a lawyer, not by clients.
The other aspect of professional privilege in civil law countries is the right to refuse testimony as to the facts the lawyer learns while providing services to the client. Protection of data and documents in civil proceedings varies by jurisdiction. In some countries, courts can demand that attorney work product be produced as evidence, particularly in criminal cases where the documents are crucial to the government’s investigation. Usually in such situations, however, an independent court first decides whether such materials are properly admissible before they are produced.
South America and Central America
Attorney–client privilege and professional secrecy obligations are recognised to some extent throughout South America and Central America. The extent to which the protection is recognised varies from country to country.
Brazil provides broad protection to attorney–client communications and work product, similar to the protections extended by the United States and the United Kingdom. In contrast, Mexico’s recognition of the attorney–client privilege is narrower. Mexico has no specific regulations addressing the attorney–client privilege outside the antitrust context. Instead, Mexico’s constitution has professional secrecy requirements that require every professional, including lawyers, to keep secret all confidences entrusted to them by clients. Professionals cannot be compelled to testify as to this information. But the government can compel a business to testify about or produce documents that include attorney–client communications. There has been some legal precedent suggesting that while the attorney–client privilege is not expressly established, it is nonetheless guaranteed by the Mexican Constitution through protection of the rights to privacy, presentation of a defence, secrecy of correspondence and practice of a profession.
Privilege not recognised
In addition to differences in scope and limits on the extension of concepts of privilege, there are certain jurisdictions where the attorney–client privilege is not broadly recognised. Conducting investigations involving these jurisdictions creates unique challenges. Key jurisdictions where such issues can arise include, but are not limited to, the following.
China does not expressly recognise an attorney–client privilege in the same manner as the United States and other countries. There is, however, some level of protection for attorney–client communications and attorney work product where the lawyer involved is a licensed Chinese lawyer working at a local law firm or a licensed non-Chinese lawyer registered as a foreign lawyer working from a China-approved representative office of an international law firm. Under Article 38 of the Lawyers’ Act, those lawyers must keep confidential facts and information they learn during their representation of clients. The Criminal Procedures Law also gives defence lawyers a right to keep confidential information learnt during the representation of their clients.
These ethical obligations, however, are not the equivalent of an attorney–client privilege. Other than criminal defence lawyers, attorneys can be required to testify against their client and authorities can require production of document created by a lawyer pursuant to a government investigation. Further, certain Chinese laws require cooperation of those subject to an investigation and do not provide exceptions for lawyers.
Russia does not broadly recognise the concept of legal privilege, but it does provide for advocate secrecy and commercial secrecy. Any information given to an advocate who is providing legal services to a client is protected by law and the advocate cannot be questioned as a witness. Without a court order, an advocate’s premises cannot be searched. There is also a prohibition against using materials contained in the advocate’s file as evidence in the prosecution of the advocate’s clients. Correspondence between advocates is also protected. Advocate secrecy can only be waived by clients with very few exceptions. Notably, however, these protections only apply to lawyers who have gained the status of advocates by meeting certain requirements and passing a special exam. Apart from advocate secrecy, Russia recognises commercial secrecy, which can operate to protect information that has an actual or potential commercial value because it has not been disclosed to third parties. A client may also enter into a confidentiality agreement with an attorney to protect commercial secrets. Regulatory authorities can, however, compel disclosure of a commercial secret.
United Arab Emirates
The concept of the attorney–client privilege in the United Arab Emirates is complex because, in addition to laws related to privilege in the country generally, each of the country’s two financial free zones, the Abu Dhabi Global Markets (ADGM) and the Dubai International Financial Centre (DIFC), has its own privilege laws. Generally, however, a lawyer has an obligation to maintain the confidentiality of client information. Nonetheless, law enforcement or other government authorities may be able to compel the client to disclose otherwise privileged communications to the extent ordered by a court or as required by law.
Applications of privilege to in-house and foreign lawyers
Cross-border investigations often involve in-house lawyers and foreign lawyers. Whether the work of those lawyers is protected by either the attorney–client privilege or the work-product doctrine differs by country and the investigative plan should take that into account.
The attorney–client privilege protects otherwise privileged communications made by in-house lawyers. The more challenging issues in the United States relate to the questions of who is considered to be part of the corporation for privilege purposes and how to address privilege when in-house counsel acts as both a legal and a business adviser.
In assessing who is considered to be part of the corporation, some courts have adopted what is known as the ‘control group test’, limiting privilege protections to communications between in-house counsel and those employees within the ‘control group’ – namely, those who have authority to control or make decisions about the company’s legal affairs. Other courts have adopted what is known as the ‘subject matter test’, which extends privilege protections to communications between employees and in-house counsel if specifically made for the purpose of securing legal advice for the corporation.
In Upjohn Co v. United States, the Supreme Court determined that communications between in-house (or outside counsel) and lower-level employees was privileged if it was made for the purpose of securing legal advice for the company and the communication was within the scope of the employee’s duties (and not available from others in management). Upjohn applies under federal law and has been adopted by most states. The attorney–client privilege may also attach to communications made to an attorney’s agents if the communication is intended for the purpose of seeking or obtaining legal advice.
Where an in-house lawyer is both a legal and a business adviser, communications and work product related to the legal advice in-house counsel renders is privileged but business advice is not. Simply including in-house counsel in a communication does not in and of itself make the communication privileged. Mixed-purpose communications, in particular, pose challenges because they make it difficult to determine whether the primary purpose of the communication is to render legal advice or to opine on a business issue. Best practice is for in-house counsel to communicate business and legal advice in separate communications and keep work product separate, to the extent possible.
There is no bright line rule in the United States for whether communications with foreign qualified lawyers will also be recognised as privileged. In federal court, Section 501 of the Federal Rules of Evidence provides that common law will generally govern a claim of privilege. As a result, most federal courts apply a choice-of-law analysis to determine whether, under the facts and circumstances presented, domestic or foreign law is most closely related to the communication. This is commonly known as the ‘touching bases’ test. If the court determines that US privilege laws should apply to the communication, then the communication with the foreign qualified lawyer will be privileged – otherwise, the law of the foreign jurisdiction will govern. In that instance, if communications with the foreign qualified lawyer would be privileged in the foreign jurisdiction, the United States will recognise the privilege. If communications with the foreign qualified lawyer would not be privileged in the jurisdiction most closely related to the communication, the United States will decline to extend privilege protections beyond what would be otherwise recognised.
In the United Kingdom, communications with any lawyer – including in-house lawyers and foreign lawyers – are generally considered privileged, provided that the other elements of the legal advice privilege or litigation privilege are met. Nevertheless, the law also recognises that in-house lawyers may also have non-legal functions. For privilege protections to extend, the in-house lawyer must be acting in his or her capacity as a client’s legal adviser, and not a ‘man of business’ when giving advice. This is an extension of the rule that the communication must be for the dominant purpose of giving or receiving legal advice.
Communications with foreign lawyers (including foreign in-house lawyers), provided that they are acting in their capacity or function as a lawyer and are engaged in the giving or receiving of legal advice, will also receive privilege protections provided the other requisite elements are met. UK courts are concerned with the function, not status, of foreign lawyers, and do not look to a foreign lawyer’s national standards of registration to determine whether they are deemed to be a lawyer.
In most civil law countries, communications with in-house counsel do not receive professional privilege or the full professional secrecy protections. A few countries, namely Belgium, Portugal and the Netherlands, have laws that extend the professional privilege to in-house counsel, provided that it is clear that the in-house counsel was acting in their capacity as a lawyer. Due to these differences and a general lack of a unified approach in the European Union towards in-house lawyers and the scope of privilege protections, when planning the approach to the investigation it is safest to assume that communications between employees and in-house counsel will not receive protections.
Generally, a lawyer must be qualified to practise law in a country in the European Economic Area to enjoy legal professional privilege protections when acting in another Member State, but the scope of the protections will vary based on local law. Foreign lawyers not qualified in a particular jurisdiction or not qualified in a country of the European Economic Area will not receive any protections under the law.
Whether advice from in-house lawyers is protected by the privilege varies in other jurisdictions and is not always clear. China, India, Mexico and Russia do not extend the privilege or professional secrecy obligations to in-house lawyers who are viewed as corporate employees. In Brazil, legal advice from in-house counsel is privileged. Similarly, in Mexico, professional secrecy obligations apply to in-house counsel. In the United Arab Emirates, in-house counsel are considered corporate employees with an obligation to keep their employer’s information confidential, but it remains unclear whether any legal advice they provide is protected from disclosure.
Similarly, whether advice from foreign lawyers is protected by the privilege varies in other jurisdictions. For example, in India and Russia, advice from foreign lawyers is not protected. In Brazil, the privilege does not extend to foreign lawyers but they cannot be compelled to testify about facts learnt from their client. China’s privilege-like protections do extend to duly licensed, registered foreign lawyers working in a Chinese government-approved representative office of an international law firm but do not extend to non-registered foreign lawyers. If subject to Chinese law, however, foreign outside counsel can be compelled to testify or provide documentation against their client. In the United Arab Emirates, generally, advice from foreign lawyers who maintain their status as a foreign legal consultant with relevant authorities within the United Arab Emirates and who also hold a valid registration in their home jurisdiction will likely be treated as confidential, although in the ADGM and the DIFC, the duty to maintain confidentiality appears to be imposed only on lawyers who are entitled to practise before the ADGM and the DIFC courts, which may mean that confidentiality of advice from a foreign lawyer not so authorised might not be recognised.
Managing conflicting laws on privilege
Assess privilege issues at the outset
Since the concept of the attorney–client privilege and the attorney work-product protection vary widely by jurisdiction, it is crucial to determine at the outset of the investigation which jurisdictions will be implicated, and assess how data and evidence will be collected, how the information will be collected and who will collect it in order to best protect applicable privileges. This includes interviewing witnesses. Evaluating potential privilege and work product limitations and issues at the outset enables counsel to develop a strategy for conducting the investigation in a manner that maximises privilege and work-product protection. Part of that strategy should include engaging local counsel who are admitted to practise in a particular jurisdiction and to whom privilege and work-product protection will apply to assist in the collection of evidence and communicate with the client regarding issues concerning the local jurisdiction.
Choice of privilege in a dispute
When determining which privilege laws apply to the investigation at hand, it is critical to consider both the jurisdiction where the investigation is taking place and the jurisdiction where privilege protections may need to be sought. As noted in prior sections, in the event of a conflict of law, most federal courts in the United States (which oversee most discovery disputes with a US regulator) will apply the ‘touching bases’ test to determine which privilege laws apply. Courts in other jurisdictions take different approaches. UK courts will apply UK privilege rules regardless of where the documents were created or held. Similarly, German courts will also apply domestic procedure law to documents regardless of the jurisdiction in which the documents were created or from which they originated. But in China, authorities can compel production of documents created by a lawyer pursuant to a government investigation. Care must be taken to assess the impact of all applicable privilege laws prior to commencing the collection of relevant information and the investigative team should take all steps to ensure that, in the event of a dispute, the strongest privilege protections possible apply.
In the context of an investigation, there may be benefits to providing government investigators with information compiled by counsel or even waiving privilege for certain documents to obtain cooperation credit. Alternatively, the content of privileged documents may be helpful to a party’s case, and it may therefore be beneficial to waive privilege over them.
Before making such disclosures, however, a party needs to understand the potential risks of providing such information or waiving privilege. The risks will differ depending on the jurisdiction. Potential considerations include:
- whether the waiver of privilege or work-product protection in favour of an investigatory authority results in a loss of privilege or the work-product protection only as to the investigatory authority, or whether the privilege or work-product protection will be lost against others (e.g., other regulators in the same or different jurisdictions, third parties bringing claims in civil litigation);
- whether the investigatory authority can deploy the document or other information in open court, such that it loses its confidentiality, and therefore privilege, in a broader context;
- whether waiving privilege in relation to specific documents also results in the collateral waiver of privilege in other documents or a broad waiver as to a particular subject matter; and
- what, if any, steps can be taken to limit the potential impact of providing privileged or work-product information to the investigating authority – for example, will an agreement seeking to limit the scope of a waiver or use of the information (or both) be effective?
Limited and selective waiver
In some jurisdictions, such as the United Kingdom, it is possible to waive privilege in documents as against a party for a limited purpose and subject to obligations of confidentiality. In such circumstances, privilege in the entirety of the document against the rest of the world is not lost as confidentiality is maintained, albeit waived, as to the party to whom it is disclosed for the relevant limited purpose. However, it should be noted that the privilege may be waived in relation to other parties and for other purposes where there is a sufficiently close nexus to the original purpose for which the privilege was waived.
The use of limited waiver can be useful where a party wants to cooperate with an investigatory authority but is concerned about losing privilege to all relevant documents generally. Parties are, however, prevented from cherry-picking documents that might give only a partial picture. Also known as ‘collateral waiver’, this doctrine provides that where a privileged document is deployed (including by reference) in proceedings, privilege in related documents may be waived.
Other jurisdictions, however, including the US, do not allow limited waiver, and instead employ a concept known as selective waiver. Here, a party seeking cooperation credit chooses to share certain privileged information or work product with an investigating authority pursuant to an agreement that the authority will not claim that the disclosure constitutes a broader waiver.
Notably, US courts do not generally recognise the validity of selective waiver, which means that the disclosing party likely will have waived privilege and work-product protection as against third parties seeking the information disclosed to the investigating authority.
Inadvertent waiver can result from a variety of circumstances, including:
- sharing privileged or work-product information broadly or beyond those within the scope of the privilege;
- inadvertent production of privileged or work-product information as part of document production;
- failure to adequately identify privileged or work-product information on a privilege log; or
- providing such information to a government authority in jurisdictions where there is no protection of such information.
How to address and respond
Dissemination to those outside the scope of the privilege
Privileged or work-product information that is shared broadly can lose its protected status. To minimise the risk of such occurrences, at the outset of any potential investigation, consider steps such as:
- use password protection or encrypt privileged and work-product information where practical;
- limit the number of people who receive the information to those who need to receive the legal advice or work product;
- label privileged information and work product as ‘do not forward’ to reduce the risk of transmittal of the information to someone outside the scope of the privilege;
- alert those who are likely to receive privileged and work-product information to the need for limited distribution and the importance of protecting the attorney–client privilege and work product (education is key to reducing the risk of inadvertent waiver); and
- document the basis for providing any privileged information or work product to a third party to show that they are doing work at the request of counsel and that they are doing so in anticipation of potential litigation.
Inadvertent production of privileged or work-product information
Given the amount of data that is sought in government investigations and related court proceedings, inadvertent production of privileged or work-product information is inevitable. Key steps to protecting against such an inadvertent waiver include:
- obtaining a federal rule of evidence 502(d) order or state law equivalent, which protects against waiver in the event of inadvertent production of privileged or work-product protected information; and
- in investigations, negotiating with the government on an agreement that is the functional equivalent of a 502(d) order.
Insufficiently documented privilege or work-product claims on a privilege log
Deficient privilege logs can lead to a waiver of the attorney–client privilege or work-product protection. During investigations, governmental authorities (at least in the United States) will provide instructions regarding the content of a privilege log. Counsel should discuss with their government counterparts what information is necessary to include in a log and reach an agreement on topics such as what must be included for email strings, logging redacted documents, whether categorical logging is acceptable and other similar commonly encountered issues. Providing a sample log can help address potential issues practically.
Production of privileged or work-product information to foreign governments
For jurisdictions that require production of potentially attorney–client privileged information or the attorney work product, to maximise the likelihood that a court in another jurisdiction will not find a waiver, a record should be established that disclosure to the foreign government was made in response to a court order or a subpoena, or the demand of a government authority, and was backed by sanctions for non-compliance. It should also be recorded that any available protection or privilege was asserted contemporaneously.
Best practices to create and maintain privilege in cross-border investigations
The following best practices should be used in cross-border investigations.
- Understand the law of privilege and waiver in the jurisdictions where the investigation will occur: know which jurisdictions’ laws will apply to the communications between the investigating lawyers, local lawyers and other key employees representing the company in the jurisdiction and which laws will govern whether sharing information with the investigating authority will lead to a broader waiver of the privilege.
- Clearly define the ‘client’: understand who the client is, and which parties do not qualify as clients for the purposes of local privileges.
- Educate the ‘client’ on why and how to protect the privilege: helping the client understand what is at stake and how to protect privileged information reduces the risk of waiver.
- Hire local external counsel whenever practical and consider routing communications through them: in most jurisdictions, communications with external counsel typically enjoy the highest level of protection, to the extent such protection exists. As much as possible, internal investigations should be conducted by external counsel within the jurisdiction, rather than in-house or foreign external counsel. Even notes or advice from foreign external counsel – including US counsel – should be routed through the local counsel.
- Where written communications are required, clearly label all documents as legally privileged and confidential and treat them as such: while labelling a document as privileged or confidential does not ensure that it will be considered as such, it demonstrates that care is being taken to maintain the privilege or confidentiality. Also, store the legally privileged and confidential materials in a separate file from ordinary business materials and do not make edits or revisions to the communications or advice received from counsel.
- As much as possible, limit access to privileged records or investigation materials in jurisdictions where privilege does not exist or is limited: to the extent possible, only circulate attorney work product or communications to those who need to know that advice has been requested or rendered. Make sure firewalls are in place preventing in-house counsel in one jurisdiction from accessing privileged or confidential materials in another jurisdiction.
- Consider communicating via telephone: while an individual may still be compelled to testify in certain jurisdictions, communicate sensitive information via telephone whenever possible. Avoid providing written communications in jurisdictions where documents in the client’s possession – or in-house counsel’s possession – can be discovered.
1 Deborah R Meshulam, Katrina A Hausfeld and Laura Ford are partners, Piotr Falarz is an advocate and
Shabaz Ahmed is an associate at DLA Piper.
2 Third parties within the scope of the privilege include, among others, someone working on the matter at the request of or under the direction of the lawyer or an employee of the client.
3 Balabel v. Air India  1 Ch 317.
4 There is some question under English law as to whether, in relation to litigation privilege, documents that have not been communicated can be covered by privilege.
5 The Director of the SFO v. Eurasian Natural Resources Corporation Limited  EWCA Civ 2006.
6 WH Holding Ltd v. E20 Stadium LLP  EWCA Civ 2652.
7 Three Rivers District Council v. Governor and Company of the Bank of England (No 6)  UKHL 48.
8 The one exception to this is in enforcement proceedings of EU competition law carried out by the European Commission where the rules on EU legal professional privilege apply, irrespective of any national rules on legal professional privilege.
9 Examples of protected communications include minutes of meetings and notes on conversations between the client and the lawyer, compliance reports, strategy papers, copies of contracts given to the lawyer for information and expert opinions, as well as the lawyer’s notes and memos regarding the case. Documents recording the results of inquiries regarding the client made by the lawyer are also protected.
10 At least some protection of attorney–client communications is recognised in Argentina, Brazil, Chile, Columbia, Costa Rica, Equador, Guatemala, Mexico, Panama, Paraguay, Peru and Uruguay.
11 In 2019, the Federal Economic Competition Commission (COFECE), Mexico’s antitrust authority, established guidelines that the agency must follow in the event that it receives privileged information from a party to an investigation. The rules provide a process for the party to protect against use of privileged information by COFECE. The agency can still seize the information in the first instance but if a party raises a claim of privilege, an independent COFECE committee will assess the claim. If the claim is upheld, COFECE may not use the information in its investigation or against the party.
12 The Criminal Procedures Law of the People’s Republic of China, Article 46.
13 Compare: Articles 46, 60.1 and 135 Criminal Procedures Law with Civil Procedures Law, Article 72.1.
14 At the state level, courts typically follow one of two approaches to determine whether US or foreign privilege laws should apply. Most states apply the ‘most significant relationship test’, whereby the court applies the privilege laws of the jurisdiction with the most significant relationship to the communication (unless such application would violate public policy). However, a minority of states apply a ‘territorial approach’, whereby the courts simply apply the privilege laws of the forum state.
15 Three Rivers District Council v. Governor and Company of the Bank of England (No 6)  UKHL 48.
16 PJSC Tatneft v. Bogolyubov and others  EWHC 2437 (Comm).
17 Such countries include, in particular, Austria, the Czech Republic, Denmark, France, Germany, Hungary, Italy, Luxemburg and Poland.
18 Belhaj v. DPP  EWHC 513 (Admin) and AL, R (On the Application Of) v. XYZ Ltd & Ors  EWHC 856 (Admin).
19 The holder of the privilege or work-product protection must have taken reasonable steps to prevent disclosure and promptly took steps to correct the error, such as notifying the other party of the claim and the basis for the claim of privilege or work-product protection.
20 In re Vitamin Antitrust Litigation, 2002 U.S. Dist. LEXIS 26490 (D.D.C. 2002).