English system, communications between in-house counsel
and company employees are generally privileged, assuming
the advice given is legal and not business advice.
US courts take a more expansive view than their English
counterparts in recognizing privilege between counsel and
corporate employees in the context of investigations. Where
counsel has been retained by a corporation, the “client” is the
corporation, not the employees of the corporation. However,
because the corporation is a mere entity, it must speak
through its employees or representatives. In evaluating
whether privilege exists, all federal courts and most state
courts follow the test set out in the US Supreme Court
case of Upjohn Co. v. United States, 449 U.S. 353 (1981).
Under Upjohn, a corporation may assert privilege over
communications between its counsel and corporate employees
where: ( 1) the employee is speaking with counsel at the
direction of their corporate superiors; ( 2) the communications
are made to obtain facts to assist counsel in providing legal
advice to the corporation; ( 3) the employee is aware he or
she is being questioned for the purpose of providing legal
advice; and ( 4) the communications concern matters within
the scope of the employee’s corporate duties.
When interviewing their client’s employees in connection
with an internal investigation, counsel should provide an oral
Upjohn warning. During the warning, counsel advises the
employee that he or she represents the company, not the
employee personally. He or she advises the employee that
although their communications are protected by attorney-client privilege, the privilege belongs to the company, not
to the employee personally. As such, the company can elect
at any time to waive the privilege by, for example, disclosing
the content of communications to a third party, including a
government agency. Significantly, and in contrast to English
law, attorney-client privilege largely extends to communications
between counsel and corporate employees about the
substance of the employees’ anticipated testimony at a
deposition or trial.
The American counterpart to English litigation privilege is
the work product doctrine. This protects documents relating
to an investigation if the company created the document in
anticipation of or for the purposes of litigation. Therefore,
documents prepared in the ordinary course of business are
generally not protected by the work product doctrine. Like
the attorney-client privilege, the work product privilege can
be waived. For example, most courts hold that voluntary
disclosure of an internal investigation report to a government
entity waives privilege.
Finally, the US, England, and Wales recognize a limited common
interest privilege, which maintains the confidentiality of
attorney-client communications forwarded to or made in
the presence of third parties that share a common interest.
In the US, the extent and circumstances to which courts
recognize this privilege varies by jurisdiction.
There is a significant contrast between the common law
position on LAP and the doctrines applicable in Continental
Europe under civil codes. There is no equivalent doctrine
of privilege under civil law because there is no equivalent
doctrine of disclosure.
Taking Germany as an example, because legal privilege does
not apply to internal investigations at all, there is no advantage
from a privilege perspective of lawyers conducting investigations
or producing investigative reports in that country.
In France, there is some protection of lawyer-client
communications via confidentiality obligations imposed on
lawyers, although this only applies to members of the French
Bar. When a lawyer becomes employed by a company, that
lawyer loses his or her Bar registration, and so the use of
external lawyers in investigations is vital. The Italian position
is similar. Lawyers who are members of the Italian Bar can
refuse to disclose certain documents to the authorities by
asserting professional secrecy. However, unlike LAP in England,
this is a right that belongs to the lawyer rather than the client.
This means that documents held at a client company’s premises
may be seized by a regulator or law enforcement agency in
the course of an investigation. In addition, the assertion of
professional secrecy can be overturned by a judge or even
a prosecutor in some cases. Employed in-house lawyers
cannot be members of the Bar, and in general are not subject
to—or protected by—professional secrecy obligations.
It is also worth noting that there are certain activities in
the UK that (at least until Brexit is concluded) fall under
European Union law, where the rules can be very different.
A classic example is a European Commission antitrust
investigation. The European Court of Justice has ruled
that although correspondence in relation to the defense
of a Commission investigation should be protected from
disclosure, this only applies in the case of an independent,
external lawyer. Communications with in-house lawyers
do not attract such protection.
In summary, when conducting cross-border investigations,
counsel should take care to structure the investigation in a
manner that will maximize the applicability of all relevant
legal privileges. This requires taking a methodical approach in
analyzing the applicability and breadth of any attorney-client
privilege by examining the risks of mandatory disclosure/waiver
in each jurisdiction involved, and limiting, wherever possible,
the dissemination of privileged communications to a
“When conducting cross-border
investigations, counsel should take care
to structure the investigation in a manner
that will maximize the applicability of all
relevant legal privileges.”