What is protected by legal professional privilege?
The following three areas of law embody the scope of legal professional privilege:
Rule of confidentiality
Under Rule 1.6 of the Model Rules, confidentiality is a fundamental principle in the relationship between a lawyer and client whereby, in the absence of client consent or other applicable exceptions (described below), the lawyer may not reveal information relating to client representation. Confidentiality may apply whether or not the source of the information was the client. Therefore, communication with representatives of the client, or between the lawyer and persons retained by them, may also be protected by the privilege. For example, if a lawyer engages a consultant or expert to assist in preparation for litigation on behalf of a client, the communication of the consultant to the lawyer can also be privileged. This rule is meant to establish a relationship of trust between the lawyer and the client; it encourages the client to seek legal assistance and to communicate fully and frankly.
Under Rule 1.0(e), in order for the client to give informed consent to waive the privilege, the lawyer must communicate adequate information to the client about the material risks of and reasonable alternatives to waiving confidentiality. Unless confidential information otherwise becomes general knowledge, it remains confidential throughout the entirety of representation and thereafter.
Rule 1.6(b) enumerates exceptions to the rule of confidentiality, which are more likely to arise in criminal matters and in antitrust enforcement. A lawyer may reveal information relating to the representation of a client to the extent the lawyer believes necessary to:
- Prevent reasonably certain death or substantial bodily harm
- Prevent the client from committing a crime or fraud that is reasonably certain to result in substantial injury to the financial interests or property of another and in furtherance of which the client has used or is using the lawyer's services
- Prevent, mitigate or rectify substantial injury to financial interests or property of another that is reasonably certain to result or has resulted from the client's commission of a crime or fraud in furtherance of which the client has used the lawyer's services
- Establish a claim or defence on behalf of the lawyer in a controversy between the lawyer and the client, to establish a defence to a criminal charge or civil claim against the lawyer based upon conduct in which the client was involved, or to respond to allegations in any proceeding concerning the lawyer's presentation of the client, or
- Comply with other law or a court order
Attorney-client privilege
The attorney-client privilege is an evidentiary rule that protects confidential communication between clients and their lawyers made in furtherance of obtaining legal services. It applies specifically to judicial and other proceedings in which a lawyer may be called as a witness or otherwise required to produce evidence concerning a client. The attorney-client privilege is distinguishable from the rule of confidentiality because it only applies to confidential communication between the lawyer and the client, and not all confidential information provided by the client. Communication between lawyers and clients is often marked 'lawyer-client' privilege to readily distinguish such communication, although such labelling is not mandatory for the privilege to be applicable.
Some courts have found that the attorney-client privilege may be lost if the attorney or the client discloses privileged communication, even if disclosure was inadvertent.
Work product doctrine
The work product doctrine protects from discovery by opposing counsel material that an attorney (or the client, at the direction of an attorney) has prepared in anticipation of litigation. There are two types of work products – opinion work product and ordinary work product. Opinion work product includes an attorney's mental impressions, attorney notes and documents reflecting strategies. Ordinary work product includes factual information separate and apart from legal analysis, such as transcripts of witness interviews, reports of non-testifying experts and financial records from the client. Courts tend to give greater protection to opinion work product. Under Rule 26 of the Federal Rules of Civil Procedure, an opposing party in litigation may get access to lawyer work product if it can show that it 'has substantial need for the materials to prepare its case and cannot, without undue hardship, obtain their substantial equivalent by other means'.
Are communications with in-house counsel protected by legal professional privilege?
Courts have taken two approaches to legal professional privilege between in-house counsel and corporate employees. Some courts have adopted the 'control group test', which limits privilege to communication between in-house counsel and corporate employees who have authority to control or participate in the corporation's legal affairs. Under this approach, communication from individuals outside the control group is not protected. Other courts have adopted the 'subject matter test', which limits privilege to communication from corporate employees for the specific purpose of securing legal advice for the corporation. Communication with in-house counsel that relates to business as opposed to legal advice will likely not be protected by privilege.
In the seminal case of Upjohn v. United States, the US Supreme Court found that, for purposes of federal law, communication was privileged when it was for the specific purpose of securing legal advice for the corporation and was within the scope of the communicating employee's corporate duties (449 U.S. 383, 394 (1981)). In Upjohn, communication from lower level employees to general counsel in the form of a confidential questionnaire to learn the extent of any illegal payments was considered to be privileged information.
Some corporations choose to waive the attorney-client privilege when they are under pressure from the government to do so during a criminal investigation. This has been the topic of much debate, and the US Department of Justice has altered its policies to reduce the pressure on corporations to waive the privilege.
Does legal professional privilege apply to the correspondence of non-national qualified lawyers?
Perhaps under such circumstances, US courts apply a choice-of-law analysis to determine whether domestic or foreign law governs the question of privilege. Otherwise, the court will apply the relevant foreign legal professional privilege law. Federal and state courts take different approaches to the choice-of-law analysis.
In federal courts, under Section 501 of the Federal Rules of Evidence, federal common law governs the attorney-client privilege to give courts the flexibility to develop rules governing legal professional privilege on a case-by-case basis. If the federal court finds that domestic law should apply, then the US concept of the attorney-client privilege protects correspondence with non-national qualified lawyers.
Most federal courts apply the 'touch base' approach when determining whether correspondence with non-national qualified lawyers is privileged. Under this fact-specific analysis, 'any communications touching base with the United States will be governed by the federal discovery rules', including the attorney-client privilege (Duplan Corp. v. Deering Milliken, Inc., 397 F. Supp. 1146, 1169 (D.S.C. 1974)). The Southern District of New York recently applied the 'touch base' approach in a trademark infringement case, and found that even communication between a US client and a non-national agent of a non-national lawyer was privileged under US law (Gucci America, Inc. v. Guess?, Inc., 271 F.R.D. 58 (S.D.N.Y. 23 September 2010)).
At the state court level, courts tend to follow one of two approaches when determining whether correspondence with non-national qualified lawyers is privileged. A minority of the states (including Nevada, Connecticut and Virginia) apply the 'territorial approach' under which courts apply the legal professional privilege laws of the forum state. On the other hand, most states (including California, Delaware, Florida, Illinois, Maryland, New York and Texas) apply the 'most significant relationship' test, under which courts apply the legal professional privilege laws of the jurisdiction that has the 'most significant relationship' with the communication, unless admission would be contrary to public policy. Accordingly, if the 'most significant relationship' with the communication is determined to be a foreign jurisdiction, and if such jurisdiction would not protect such communication (eg because the lawyer was an in-house counsel), the law of the foreign jurisdiction will govern.
A few states that apply the 'most significant relationship' test, including California, Delaware, Florida and Texas, have broadly defined 'lawyer' to include all licensed lawyers so that legal professional privilege extends to correspondence with non-national qualified lawyers. In these states, if the state court finds that its own jurisdiction has the 'most significant relationship' with the communication in question, it is clear that the attorney-client privilege applies, no matter the nationality of the licensed lawyer.
In other states, if the court determines that its own laws apply, either based upon the 'territorial approach' or the 'most significant relationship' test, the determination to protect correspondence with a non-national lawyer will depend on that individual state's laws and the results may vary.
How is legal professional privilege waived?
Unless care is taken, there are a number of situations where the lawyer-client privilege may be held not to apply or will be considered waived. Examples of how this may occur include:
- Communications include persons not in the structured client class
- Appropriate steps were not taken to ensure that the communications, both written and oral, are undertaken in confidence, and
- There are either intentional or unintentional waivers of the privilege (eg by unintentionally disclosing privileged materials in discovery or by voluntarily providing privileged information to the government during an investigation).
Legal professional privilege in the context of merger control
The attorney-client privilege and work product doctrine both apply in the context of merger control proceedings. In the event that the government demands documents from a party to a transaction, that party may redact or refuse to produce privileged documents. If a party chooses to rely on privilege as the basis for withholding or redacting documents, it must produce a ‘privilege log’, which describes the relevant documents in sufficient detail to demonstrate that a privilege applies (usually by identifying the document title, the name and position of its author, and a brief description of its content). If the government disagrees that a document described in a log is privileged, they may petition a court to order the production of that document.
