When carrying out an internal investigation, a company
will naturally be cautious about revealing potentially
sensitive communications with its lawyers. They may
assume that legal professional privilege is available to
protect attorney-client communications in this context.
Indeed, when properly asserted by a company, legal privilege
is a strong shield; it gives absolute protection against
disclosure of a document to a third party, and a court
cannot draw an adverse inference just because privilege
has been claimed. But, how easy is it to claim such privilege,
and are companies right to put their faith in it? The answer
is not straightforward and will vary depending on where the
question is being decided.
In common law jurisdictions, legal privilege is a well-developed doctrine. Under English law, it falls into two
categories: litigation privilege and legal advice privilege
(LAP). Although the scope of litigation privilege is much
wider, LAP is most relevant to an internal investigation.
This is because litigation privilege requires litigation either
to be taking place or to be in reasonable contemplation,
and the document in question must have been created for
the dominant purpose of such litigation. It has been held
in the English courts that proceedings must be adversarial
rather than inquisitorial in order for litigation privilege to
apply, and there is considerable doubt as to what extent
internal investigations may meet this test, with little case
law to assist.
LAP requires there to be: ( 1) a confidential communication,
( 2) between the client and legal adviser, ( 3) made for the
purposes of giving or receiving legal advice. It is therefore
important for companies to consider carefully how they
structure their investigations in order to ensure the full
protection of LAP wherever possible.
There are two options.
The first is the use of a third-party investigations agent (such
as a forensic accountant or auditor) to carry out tasks such as
collating documents or processing data. These agents may
possess expertise not always found in law firms, and costs
could, in some cases, be lower. However, their work would
not fall within the scope of LAP, as they do not meet the
definition of legal advisers. The same is true when the agent
is carrying out its investigative work in another country. It has
been clearly established in the English courts that, no matter
the location of the work, if proceedings are conducted in
England then English law will apply for the purposes of
I Have the Privilege
Legal privilege in internal investigations in the UK and the US
By Emma Gordon, Meghana Shah, Phil Taylor, and Veronica Wayner