Privilege is a legal concept that can have a significant impact on internal investigations. It refers to certain types of communications or documents that are protected from disclosure because they are considered confidential or privileged. Legal professional privilege is an important area that has seen recent advancements in the UK. In this blog article, we will cover the following topics:
- The definition of legal professional privilege;
- When legal professional privilege apply, and why it is important;
- What the most recent updates related to legal professional privilege in the UK are and
- How those are likely to impact the work of internal investigators.
Let’s start with some basic definitions.
Contents:
What is legal professional privilege?
What is legal advice privilege?
What is litigation privilege?
When does legal professional privilege relate to internal investigations?
What are some considerations you should consider to preserve privilege when performing internal investigations?
Why is legal professional privilege important?
What are the latest updates within legal professional privilege in corporate internal investigations in the UK?
How can technology further empower legal professional privilege?
What is legal professional privilege?
Legal professional privilege (LPP) can be defined as a fundamental legal right that enables a party - be it an organization or an individual - to withhold certain communications and documents from being disclosed to third parties, such as the court, or the opposing party during the course of a litigation. The main idea behind legal professional privilege is that clients should be able to communicate freely with their legal advisors without fearing that the information they share could be disclosed and used against them.
That said, there are two types of legal professional privilege: legal advice privilege and litigation privilege.
What is legal advice privilege?
Legal advice privilege (LAP) is a type of legal professional privilege that embodies the right of a client to prevent their legal advisors from disclosing any communication shared between them for the purpose of obtaining legal advice. It applies to any communication - be it written or verbal - that was made for the purpose of seeking or giving legal advice.
What is litigation privilege?
Litigation privilege (LP) is a type of legal professional privilege that implies the right to prevent the disclosure of confidential information and documents created specifically for the purpose of current or future litigation.
As per Three Rivers (No.6) [2005] 4 All ER 948, for litigation privilege to apply, adversarial litigation must be in progress or 'in reasonable contemplation'. Also, the communications over which privilege is claimed have to be made for the sole or dominant purpose of conducting that litigation.
When does legal professional privilege relate to internal investigations?
The reason that triggered the investigation will denote which form of legal professional privilege will apply. Commonly, there are three core factors that trigger internal investigations, namely:
- In response to an allegation of wrongdoing / misconduct within an organization (legal advice privilege may apply);
- After an event that triggers the need for investigations: e.g. a litigation (both legal advice privilege and litigation privilege may apply);
- When a regulator investigates an organization (both legal advice privilege and litigation privilege may apply);
It is important that in-house counsel identifies which privilege form is relevant and outlines a strategy to ensure that the organization benefits and protects itself from disclosing anything that might result in damaging consequences before kicking off the legal discovery process.
Maintaining privilege while conducting proper internal investigations might be a challenging balance to strike. Hence, internal investigators need to structure their investigations in a way which would not violate the privilege.
What are some considerations you should consider to preserve privilege when performing internal investigations?
There are several considerations to account for to be able to preserve privilege when performing internal investigations.
Employee interviews and documentations can be regarded among the most important stages of an internal investigation. A lawyer’s interview notes may be privileged if they contain the lawyer's opinion or views on a particular topic. Otherwise, if the interview notes contain only a factual summary of what has been said verbatim, legal professional privilege may not be applied.
When it comes to documents, those may be privileged if they came into place for the primary focus of litigation or legal advice. In case privilege has been lost (by disclosure to third parties), the documentation will not be privileged. As of 2021, legal professional privilege can be also applied to documents created during an investigation, even if the main purpose of the investigation is not to receive legal advice, but - instead - to investigate misconduct within the organization.
When circulating privileged documents, it is essential that you label them as ‘privileged and confidential’ as well as separate them from non-privileged documentation. More so, if you are sharing privileged documents with others, use a limited or non-waiver agreement to try and preserve the privilege.
Why is legal professional privilege important?
Legal professional privilege is important because it allows any individual or organization (irrespective of size) to access legal advice without the fear that the information they share with their lawyer might be disclosed and used against them in legal proceedings. If the privilege were to be lost for communications between lawyers and third parties, this would have resulted in companies and individuals potentially failing to seek legal advice when required. That, in turn, could put the organization / individual at risk of legal action, fines, or reputational damage as well as potentially result in financial losses.
What are the latest updates within legal professional privilege in corporate internal investigations in the UK?
Back in 2019, the UK Supreme Court issued a ruling as part of the case of the Director of the Serious Fraud Office v. ENRC, which clarified the limits of legal professional privilege in the context of internal investigations. Subsequently, the Court held that legal professional privilege does not apply to documents created for the dominant purpose of obtaining evidence for a "without prejudice" settlement or for use in adversarial litigation. This way, if a company's dominant purpose in creating a document during an internal investigation is to use it in potential litigation or settlement negotiations, instead of obtaining legal advice, the document will not be protected by legal professional privilege.
In 2021, the UK Court of Appeal in the case of RBS Rights Issue Litigation ruled that legal professional privilege can also be applied to protect documents that were created during an internal investigation, even if the dominant purpose of the investigation is not to get legal advice.
How did this new LPP ruling come into place?
In the Royal Bank of Scotland (RBS) Issue Litigation case, RBS had conducted an internal investigation into whether certain statements made in a rights issue prospectus were misleading. RBS claimed LPP over the documents created during the investigation, arguing that they were created for the dominant purpose of obtaining legal advice. However, the claimants in the case argued that the dominant purpose of the investigation was to identify and address regulatory issues, rather than to obtain legal advice.
The Court of Appeal ultimately ruled in RBS's favor, finding that legal professional privilege can apply to documents created during an internal investigation, even if the dominant purpose of the investigation is not to obtain legal advice. The court noted that, as long as obtaining legal advice was one of the purposes of the investigation, and the investigation was carried out with a view to obtaining legal advice, LPP will apply.
How can technology further empower legal professional privilege?
Modern technology, and more specifically end-to-end eDiscovery software, can empower legal professional privilege by providing secure methods to manage the eDiscovery process. More specifically, some of these methods include:
- Manual and automatic redaction: manually or automatically redact or mask sensitive information from documents before they are shared, reducing the risk of unauthorized disclosure.
- Access control and document security: you can protect sensitive information when collaborating with external parties by giving a user the right to access only redacted documents;
- Chain of custody tracking: eDiscovery software can track and document the handling of privileged documents, providing a clear chain of custody that can be used to demonstrate that privileged information was handled appropriately.
One of the end-to-end eDiscovery solutions that embody all of the aforementioned capabilities and more is ZyLAB ONE.
ZyLAB ONE also supports secure document retention and destruction policy to ensure that privileged documents are not retained longer than necessary and are securely disposed of when no longer needed. It keeps data safe through features such as: Single Sign-on; User Access Management; Azure Active Directory integration; Two-factor authentication; Role Management, to name a few.
[View source.]
