Compliance Audit Information May Not Be Attorney Client Privileged


Attorneys routinely advise clients conducting audits and investigations that the audit or investigation should be conducted by outside counsel in order to establish attorney client privilege. 

One of the problems with the OIG Self Disclosure protocol is that it requires the waiver of attorney client privilege.  Now a federal district court has decided that audits and investigations conducted in accordance with established compliance policies may not be privileged either.

In U.S. ex rel Barko v. Halliburton Company, the U.S. District Court for the District of Columbia held that document related to internal investigations conducted in accordance with the company’s “code of business conduct” were not entitled to attorney client privilege because the investigations were not conducted for the purpose of obtaining legal advice, but were instead conducted pursuant to “regulatory law and corporate policy”.

Since the essence of any corporate compliance program is to establish benchmarks and to conduct both routine and special investigations with respect to assuring compliance and investigating complaints, it is chilling that a federal court now concludes that this information is not protected by attorney client privilege.

Perhaps the compliance program policies should differentiate between investigations conducted in accordance with “regulatory law and corporate policy” and investigations conducted under the auspices of counsel, that there is a clear line of demarcation with respect to the purpose of the investigation. 

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Tucker Arensberg, P.C. | Attorney Advertising

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