Cross-border Attorney-Client Privilege Issues Association of Corporate Counsel © 2015 The information contained in these materials should not be construed as legal advice or legal opinion on specific facts, and should not be considered representative of the views of ACC or any of its lawyers or consultants, unless so stated. The information contained in these materials is not intended to be a definitive statement on the subject but rather to serve as a resource providing practical information for the reader.

Attorney-Client Privilege Introduction What is Attorney-Client Privilege in the US? Evidentiary protection of communications between clients and their attorneys against disclosure Elements of US Attorney-Client Privilege Communication between an attorney (or a rep. of an attorney) and a client (or a rep. of a client) Made confidentially Made for the purpose of obtaining or providing legal advice Restatement (Third) of the Law of Governing Lawyers § 68 Who controls privilege in the US The client or person/entity that sought to be a client

Attorney-Client Privilege Introduction Common Law Countries USA Exists: yes IHC: yes – additional requirements Foreign counsel: yes Third party comm.: when assisting an attorney Country 2 Exists: IHC: Foreign counsel: Third party comm.: Country 3

Attorney-Client Privilege Introduction (Cont’d) Civil Law Countries Country 1 Protection mechanism: Confidentiality/Professional secrecy Scope: right to refuse to testify and not to disclose client’s information In-house counsel: Yes Foreign lawyers: unclear Country 2 Protection mechanism: Scope: In-house counsel: Foreign lawyers:

Attorney-Client Privilege Introduction (Cont’d) Special Regime Countries Like People’s Republic of China (mixture of civil and socialist law) China Protection mechanism: General duty of confidentiality Scope: lawyer can be ordered to disclose confidential information In-house counsel: Yes Foreign lawyers: Not differentiated Image courtesy of vectorolie at FreeDigitalPhotos.net

Attorney-Client Privilege Issues Are the following communications privileged? Between US in-house counsel and US employees Between US in-house counsel and non-US employees Are they privileged in a US forum ? Are they privileged in a non-US forum? Between non-US in-house counsel and non-US employees Between patent agents and employees Are they privileged in a US forum? Are they privileged in a non-US forum? What will help us navigate these issues? Role and status of in-house counsel in jurisdiction at issue Forum in which privilege issue will be resolved Choice of law rule of the forum

Hypothetical 1 An in-house attorney in the US interviews employees located in France in order to obtain information to defend the organization in a US lawsuit. Is there privilege in the US?  What if the interviewer was a paralegal working at the direction of the in-house attorney? What if the lawsuit is brought in Canada? If the in-house counsel is located in France, is there privilege in the US?

Hypothetical 1 (Cont’d) An in-house attorney in the US interviews employees located in France in order to obtain information to defend the organization in a US lawsuit. Is there privilege in the US?  Is there work product protection in the US? Communications “touching base” with the U.S. are governed by federal discovery rules. Tulip Computers Int’l B.V. v. Dell Computers Corp., 210 F.R.D. 100 (D. Del. 2002) Communications with in-house counsel are protected by attorney-client privilege as long as requirements are met. Upjohn Co. v. United States, 449 U.S. 383 (1981)

Hypothetical 1 (Cont’d) An in-house attorney in the US interviews employees located in France in order to obtain information to defend the organization in a US lawsuit. What if the interviewer was a paralegal working at the direction of the in house attorney? Communications with non-attorneys acting at the direction of an attorney may be privileged U.S. v. Kovel, 296 F.2d 918 (2d Cir. 1961) What if the lawsuit is brought in Canada? Communications with non-attorneys may be privileged when the third party serves as a “channel of communication” between the client and solicitor, i.e., essential to the communication. General Accident Assurance Co. v. Chrusz, 1999 CarswellOnt 2898 (ONCA)

Hypothetical 1 (Cont’d) An in-house attorney in the US interviews employees located in France in order to obtain information to defend the organization in a US lawsuit. If the in-house counsel is located in France, is there privilege in the US? Would US courts apply functional equivalence? In France IHC can provide legal advice, but are not permitted on the list of “advocats” or “conseils juridiques” Renfield Corp. v. E. Remy Martin & Co., 98 F.R.D. 442 (D. Del. 1982) The test for attorney-client privilege “is a functional one of whether the individual is competent to render legal advice and is permitted by law to do so” Anwar v. Fairfield Greenwich Ltd, 2013 WL 3369084, (S.D.N.Y.) No privilege extended to Dutch in-house who was unlicensed Louis Vuitton Malletier v. Dooney & Bourke, 2006 WL 3476735 (S.D.N.Y.) Because French law does not provide privilege for French in-house counsel, parties to the comm. did not expect that it would be confidential

Hypothetical 2 The organization is planning to acquire a company in Brazil.  Are communications with the investment banker and other non-attorney consultants protected by attorney-client privilege? Image courtesy of renjith krishnan at FreeDigitalPhotos.net

Hypothetical 2 (Cont’d) The organization is planning to acquire a company in Brazil.  Are communications with the investment banker and other non-attorney consultants protected by attorney-client privilege? Privileged communications shared with consultants who act for the corporation and possess information needed by attorneys in order to render legal advice are protected by the attorney-client privilege FTC v. GlaxoSmithKline, 294 F.3d 141, 148 (D.C. Cir. 2002) In re Copper Mkt. Antitrust Litig., 200 F.R.D. 213, 219 (S.D.N.Y. 2001) McCaugherty v. Siffermann, 132 F.R.D. 234, 239 (N.D. Cal. 1990)

Hypothetical 3 An employee in Brazil calls the corporate compliance hotline and describes a bribery incident in Brazil.  A compliance professional, working at the direction of in-house counsel in the US conducts an investigation.  Is there privilege over their communications with the employees in Brazil? Image courtesy of iosphere at FreeDigitalPhotos.net

Hypothetical 3 (Cont’d) An employee in Brazil calls the corporate compliance hotline and describes a bribery incident in Brazil.  A compliance professional, working at the direction of in-house counsel in the US conducts an investigation.  Is there privilege over their communications with the employees in Brazil? Upjohn Co. v. United States, 449 U.S. 383 (1981) Communications made by and to non-attorneys serving as agents of attorneys in internal investigations are generally protected by the privilege In re Kellogg Brown & Root, Inc., ET AL., Case No. 14-5055 (D.C. Cir. Jun 27, 2014) Gucci America, Inc. v. Guess?, Inc., 271 F.R.D. 58 (S.D.N.Y. 2010) (communications with unlicensed Italian in-house counsel were privileged because Italian counsel was acting at the direction of licensed attorney)

Hypothetical 3 (Cont’d) An employee in Brazil calls the corporate compliance hotline and describes a bribery incident in Brazil.  A compliance professional, working at the direction of in-house counsel in the US conducts an investigation.  Is there privilege over their communications with the employees in Brazil? Is there privilege if foreign law applies? Only if comparable privilege would apply in foreign jurisdiction It is helpful to provide expert testimony regarding foreign substantive law as well as the analysis of another US court Or, If US court decides to apply US law on public policy grounds Astra Aktiebolag v. Andryx Pharms., 208 F.R.D. 92 (S.D.N.Y. 2002)

Hypothetical 3 (Cont’d) An employee in Brazil calls the corporate compliance hotline and describes a bribery incident in Brazil.  A compliance professional, working at the direction of in-house counsel in the US conducts an investigation.  Is there privilege over their communications with the employees in Brazil? What if the communications were between a China employee and China in-house counsel? Choice of law rule In China: no In the US: Touch-base test Even if foreign law would not afford privilege protection, U.S. courts may still protect non-U.S. party on public policy grounds. Astra Aktiebolag v. Andryx Pharms., 208 F.R.D. 92 (S.D.N.Y. 2002)

Practical Tips for Protecting Privilege Identify potential forum(s) Understand the following information for each jurisdiction: Status and role of in-house counsel Privilege vs. professional secrecy and scope of protection Whether protection applies to communications between foreign in-house counsel and employees Ensure in-house counsel providing legal advice are licensed to practice law somewhere Use counsel to whom protection is afforded and weight strategic use of foreign counsel Avoid litigation in unfavorable forum: Transactions: consider broadening choice-of-law provisions to include privilege law selections

Practical Tips for Protecting Privilege Train employees on attorney-client privilege and document circulation Privileged documents should be circulated “on a need to know basis” Exercise diligence to protect privilege but assume documents may be disclosed Document the purpose of the communication (i.e., obtain legal advice for the corporation) Mark documents as “privileged”, “attorney work product” or “litigation privilege” as applicable Weight role of non-lawyers In the US: will they assist the lawyer in providing legal advice? In Canada: will they be integral to the solicitor-client relationship?

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