investigating privilege: asserting and maintaining legal ... · investigating privilege: asserting...
TRANSCRIPT
Investigating privilege: asserting and
maintaining legal privilege over corporate
internal investigations
Wednesday, February 1, 2017
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Speakers
Lindsay Mullen
Partner
Calgary
Lindsay Mullen practices
occupational health and safety,
regulatory compliance and
employment law.
Ms. Mullen represents federally
and provincially regulated
companies in the energy,
transportation, financial and
services sectors.
Neil Tichkowsky
Associate
Calgary
Neil Tichkowsky practices
litigation and has a particular
interest in administrative and
employment law.
He joined our Calgary office in
2011 as a summer student and
prior to rejoining Norton Rose
Fulbright in 2013 clerked with
the Federal Court of Appeal in
Ottawa.
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Overview
Overview of the current state of the law regarding legal privilege
Practical guidance on initiating and conducting an internal investigation,
which may or may not have been prompted by regulatory concerns
What type of legal privilege should be asserted?
Why is this topic important?
Cross-border considerations
How and when to selectively waive privilege
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Why is this topic important?
The ability to protect an internal investigation is desirable
because it minimizes the risk that the investigation
information and findings will be used against the company.
With a protected investigation, there is more likely to be full
and frank disclosure of relevant facts and, hence, an
accurate understanding of what happened so that
corrective or remedial actions can be taken.
Efforts to ensure that privilege is maintained in the context
of internal investigations is becoming increasingly
important as companies face stricter regulatory oversight
and broad allegations of corporate misconduct.
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What type of legal privilege should be asserted?
Legal privilege is an evidentiary concept; in essence,
an exception to disclosure of information in proceedings.
There are two distinct forms of legal privilege:
1. Solicitor-client (or legal advice) privilege
2. Litigation privilege
Although legal advice privilege and litigation privilege
are distinct categories, they are both a highly important
class of privilege which gives rise to a presumption of
inadmissibility and will be protected by an immunity from
disclosure, unless an exception to that privilege applies.
It is important to understand the distinction between legal
advice privilege and litigation privilege.
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Types of privilege
Legal advice privilege
Litigation privilege
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Legal advice privilege
• Solicitor-client/legal advice privilege applies only
to confidential communications between the client and
his or her lawyer (which may include in-house legal
counsel so long as such individual was clearly involved
in their capacity as legal counsel and not for other
business reasons).
• Legal advice privilege exists any time a client seeks
legal advice from his or her legal counsel regardless
of whether litigation exists or is contemplated.
• The interest which underlies the protection from
disclosure of communications between a client and a
lawyer is the interest of all individuals (including
corporations) to have full and ready access to legal
advice. If an individual cannot confide in a lawyer
knowing that what is said will not be revealed, it will be
problematic for that individual to obtain proper candid
legal advice.
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Legal advice privilege (cont’d)
Test:
1. Communication within solicitor-client relationship
2. Made for purposes of obtaining/providing legal advice
3. Made with expectation of confidentiality
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Communications in solicitor-client relationship
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Communications made for purposes of obtaining
legal advice
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Made with expectation of confidentiality
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Litigation privilege
• Litigation privilege applies to communications between
the lawyer and their client and/or third parties and gives
rise to an immunity from disclosure for documents and
communications whose dominant purpose is preparation
for litigation.
• This includes: the lawyer’s file and oral or written
communications between a lawyer and third parties, such
as witnesses or experts and may include material of a
non-communicative nature (i.e., photographs).
• Litigation privilege applies only in the context of existing
or contemplated litigation.
• Litigation privilege is based upon the need for a protected
area to facilitate investigation and preparation of a case
for proceedings where there is an adversarial party
(whether it be an individual, another corporation, or a
government regulator).
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Litigation privilege (cont’d)
Test:
1. Actual or contemplated litigation
2. Communications between lawyer and third parties, a client and third parties
3. Communications arise from “dominant purpose” of litigation
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Reasonable prospect of litigation
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Dominant purpose test
What is the “dominant purpose”?
Potential prosecution
under regulatory
statute
Civil claim
Statutory investigation
Following company
policy mandating
investigation
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Current state of the law
1. Talisman Energy Inc v Flo-
Dynamics Systems Inc, 2015
ABQB 561
2. R v Bruce Power Inc, 2009
ONCA 573
3. Alberta v Suncor Energy Inc,
2016 ABQB 264
4. Lizotte v Aviva Insurance
Company of Canada, 2016 SCC
52
5. Alberta (Information and
Privacy Commissioner) v
University of Calgary, 2016
SCC 53
• Wide protection afforded to legal
privilege
• Internal investigation materials can
be immune from disclosure on the
basis of legal privilege
• Express, clear legislative language
is required to compel production of
legal advice or litigation privileged
documents
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Practical guidance
The following are some suggestions to assist in support
of an assertion of legal privilege:
1. Identify circumstances where internal/external counsel
should be involved.
2. Consider whether the circumstances necessitate
protection from disclosure of investigation materials.
3. Ensure that the investigation takes place at the direction
of legal counsel.
4. Insofar as possible, it is ideal to be able to assert both
legal advice privilege and litigation privilege.
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Practical guidance (cont’d)
5. Document and communicate the legal purpose of the
investigation
• Document or otherwise confirm the intent to conduct
an investigation (at the direction of legal counsel) or
initiate other activities in preparation for litigation (at
the direction of legal counsel); this way both legal
advice privilege and litigation privilege may apply.
6. Mark written materials as “Privileged and Confidential”
• Labeling documents “privileged and confidential”,
“solicitor-client communication” and “legal counsel
work product” (where applicable) is important, but
must not be overused such that it no longer
meaningful.
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Practical guidance (cont’d)
7. Ensure attorney direction and oversight
• If possible, communications should be directed from
or to a lawyer (i.e., communications between non-
lawyer parties make the assertion of privilege difficult
to maintain).
• Deliver Upjohn warnings in connection with witness
interviews.
• It is preferable for a lawyer to directly retain an expert
and it should be confirmed with the expert that they
are being retained under litigation and legal advice
privilege and that the purpose for the report is for
legal counsel’s use in providing legal advice and for
use in anticipated litigation.
• Any advice or direction from in-house legal counsel
should be done solely in their capacity as legal
counsel (as opposed to being provided in a business
capacity).
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Practical guidance (cont.)
8. Appropriately restrict the distribution of investigation
materials, both outside and within the company
• Ensure that any use or disclosure of documents both
internally and externally is carefully considered and
limited to avoid a finding that something is either not
subject to privilege or that privilege was waived.
• Take steps to avoid the possibility of inadvertent
disclosure.
9. Update written corporate policies and procedures
• Any company documents mandating investigations
upon the occurrence of an event should include
language that legal counsel be involved at first
instance to determine whether the investigation
needs to be privileged and therefore is directed at the
request of legal counsel.
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In global investigations, there is the added complexity that material that is granted privilege protection in one jurisdiction may not be granted privilege protection in another.
The extent to which materials prepared during the course of an internal investigation will be privileged will depend on the privilege rules that apply, as well as the conflict of law rules on privilege of the jurisdiction examining the question.
Cross-border considerations
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Cross-border consideration examples
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Cross-border consideration examples (cont’d)
English Law
• Where proceedings are brought in England, the English courts will apply the
English law on privilege to determine the extent to which documents can be
withheld. So long as a document satisfies the test for legal advice privilege or
litigation privilege under English law, the document will be treated as privileged.
It does not matter that the document would not have been privileged under any
other law.
• However, English courts will not treat a document as privileged simply because
it is privileged under another law: it must be privileged under English law.
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Cross-border consideration examples (cont’d)
US Law
• In the United States, courts will often apply the privilege laws of the country
in which the privileged communication took place.
• US courts are divided about whether US privilege law also applies to foreign
communications.
• Some courts hold that if a document is protected under either the foreign
privilege law or US privilege law, then it can be protected from disclosure.
• Other courts are strict in their adherence to foreign law and hold that if a
communication occurs in a foreign country and is not protected by that country’s
privilege law, then the communication is not protected from disclosure in the US
- even if the communication would be protected by US privilege law
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Cross-border considerations
Takeaways
• When conducting an internal investigation it is important to be mindful of relevant jurisdictions and the requirements of the potentially applicable privilege laws.
• Understand the privilege laws of the location(s) of where the investigation is being conducted.
• Understand the privilege law of the other locations where proceedings could arise which are relevant to the circumstances/matter under investigation.
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Waiving privilege
Waiver of privilege is ordinarily established where it is shown
that the possessor of the privilege (1) knows of the existence of
the privilege, and (2) voluntarily evinces an intention to waive
that privilege. However, waiver may also occur in the absence of
an intention to waive, where fairness and consistency so
require.”: S&K Processors Ltd v Campbell Avenue Herring
Producers Ltd, 1983 CanLII 407 at para. 6 (BCSC), per
McLachlin J. as she then was.
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Waiving privilege (cont’d)
• Waiver more readily found in relation to litigation privilege
• Distribution of privileged information within an organization is not
readily considered to be disclosure to a third party, and so
generally waiver does not occur
− Consider who gets the information and for what purpose
• There is no waiver where the privilege holder discloses the
document to a third party particularly where it is not voluntary
disclosure and pursuant to an understanding that the document
will be held in confidence and not disclosed to others
(i.e., to an auditor)
− It is important to document the privilege holder’s intention to protect their
legal privilege while complying with the demands of their auditor
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Waiving privilege (cont’d)
• Common interest privilege arises in relation to a document or communication that is already protected by legal advice or litigation privilege and allows legal counsel representing different clients with similar legal interests to share information without having to disclose it to others such that the document or communication does not lose its protection.
− Recent case law suggests that this applies to litigation privilege only and not to legal advice privilege (i.e., a legal memo shared between, and jointly prepared by, lawyers representing different parties to a merger transaction): Iggillis Holdings Inc. v. Canada (National Revenue), 2016 FC 1352
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Waiving privilege (cont’d)
Takeaways
• See #8 under Practical guidance
− Appropriately restrict the distribution of investigation materials, both outside and within the company
− Ensure that any use or disclosure of documents both internally and externally is carefully considered and limited to avoid a finding that something is either not subject to privilege or that privilege was waived
− Because of the limited scope as to the extent of the waiver, consider creating a separate, less sensitive document when there is a desire to circulate certain information
− Take steps to avoid the possibility of inadvertent disclosure
− For internal sharing, if possible, communications should be directed from a lawyer
• Document the intention to protect legal privilege despite the disclosure
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Appendix “A” witness interviews: Upjohn warnings “We are conducting an investigation for the Company into certain events related to [INSERT RELEVANT ISSUE IN GENERAL TERMS]. We believe that you may have facts and/or documents that may be relevant to our investigation and we appreciate you meeting with us.
To be clear, we serve as counsel to the Company. We are not your personal counsel and cannot give you legal advice. If you wish to obtain separate counsel, we will re-schedule this interview so that you may do so.
In addition, your communications with us, as part of this investigation, are confidential and protected by, among other things, the attorney-client privilege. As the Company is our client, the attorney-client privilege belongs solely to the Company. Accordingly, the Company, in its sole discretion, may elect to waive the privilege and reveal your communications with us to third parties, including the government.
As part of this investigation, we are interviewing a number of employees to gain a better understanding of the relevant issues. The fact that we are conducting this investigation does not mean the Company believes that any current or former employee has engaged in improper or illegal conduct. It simply is the process through which the Company ensures that it maintains the highest standards of corporate integrity. Your candor and honesty are critical to our ability to conduct effectively our investigation. To maintain the integrity of this investigation, we request that you keep our conversations today confidential. We appreciate your cooperation.
May we continue?”
Sample Upjohn warning composed by Drinker Biddle LLP and hosted on the Association of Corporate Counsel website (www.acc.com)
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Contact Lindsay Mullen
Partner, Norton Rose Fulbright
Neil Tichkowsky
Associate, Norton Rose Fulbright
