Q&A: attorney-client communications in USA | Lexology

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Attorney–client communications

Elements

Describe the elements necessary to confer protection over attorney-client communications.

Attorney-client privilege attaches to a communication between privileged persons, made in confidence, for the purpose of seeking or obtaining legal advice.

Generally, the communication must occur between a client and lawyer who have established an attorney-client relationship – or between a potential client and a lawyer, when the potential client seeks to establish an attorney-client relationship for the purpose of obtaining legal advice.

The primary purpose of a communication must be to seek or provide legal advice, although an implicit request for legal advice is generally sufficient to meet the standard. Attorney-client privilege does not apply to business advice. Distinguishing between legal advice and business advice is a fact-intensive, case-by-case inquiry. Advice on the legal or tax consequences of a business decision is legal advice; however, a communication in which an attorney evaluates a business decision is not privileged. So, for example, simply copying in-house counsel on an email regarding a business matter does not render the communication privileged unless it is clear that the communication was sent to counsel so that he or she could then provide legal advice.

The privilege protects against disclosure of the particular facts a client shares with his or her attorney, the legal questions the client asks his or her lawyer, the legal advice given by the lawyer to his or her client and the fact-based questions the lawyer asks his or her client.

In most jurisdictions, a lawyer-to-client communication is protected, but it must relate to a prior confidential communication the client made to the lawyer. Legal advice is protected by attorney-client privilege only when the advice reflects a confidential client-to-lawyer communication. The privilege also protects internal lawyer memoranda memorialising privileged communications. Lawyer-to-lawyer conversations among lawyers in the same firm and representing the same client are also considered privileged conversations.

Because attorney-client privilege is intended to protect the expectation of confidentiality, it will not attach to a communication if a non-agent third party is present.

Exclusions

Describe any settings in which the protections for attorney-client communications are not recognised.

Attorney-client communications made during the course of an internal investigation can be privileged, but only when the communication meets the usual standard for privilege – a confidential communication for the purpose of seeking or giving legal advice. Privilege does not attach simply because an attorney is conducting the investigation; privilege attaches only when the attorney conducts the investigation as a legal adviser for the purpose of providing legal advice.

Companies often use outside counsel to conduct internal investigations to ensure that privilege attaches to attorney-client communications made during the investigation. But privilege can also attach when in-house counsel directs an internal investigation for the purpose of providing legal advice. In-house counsel can direct other, non-legal, departments to conduct the investigation, and privilege will attach so long as the fruits of the investigation are for legal advice. If in-house counsel directs another department to conduct the investigation, then that department becomes the lawyer’s agent and can meet the standard for a privileged communication.

Who holds the protection

In your jurisdiction, do the protections for attorney-client communications belong to the client, or is secrecy a duty incumbent on the attorney?

Privilege belongs to the client, not the lawyer. A lawyer’s duty of confidentiality is a separate ethical duty rather than an evidentiary rule. A client can demand that an attorney waive privilege on his or her behalf.

Underlying facts in the communication

To what extent are the facts communicated between an attorney and a client protected, as opposed to the attorney-client communication itself?

Facts are not privileged. However, a client cannot be compelled to disclose which particular facts were relayed to his or her lawyer, or which facts the lawyer asked him or her to relay for the purpose of providing or seeking legal advice.

Agents

In what circumstances do communications with agents of the attorney or agents of the client fall within the scope of the protections for attorney-client communications?

As a general rule, communications with a client’s agents fall outside the scope of privilege. In contrast, communications with a lawyer’s agents fall inside the scope of privilege.

A client’s agent is only within the scope of privilege, such that it will attach to the confidential communication, when the agent is necessary to the communication between the client and lawyer. Some jurisdictions use a ‘reasonableness’ standard for evaluating whether the client-agent was necessary. Examples of client-agents found to be within the scope of privilege include translators, co-counsel, independent auditors and consultants. However, the issue is analysed on a case-by-case basis, so an accountant might be within the scope of privilege for one client but not for another. Courts have concluded that friends, former personal lawyers and union representatives are generally outside the scope of privilege. Family members and spouses can fall within privilege depending on the circumstances.

Lawyers’ agents can be within the scope of privilege, such that it attaches to a confidential communication with the agent. Courts have regularly held that members of a lawyer’s regular staff, such as secretaries and paralegals, are within the scope of privilege. But not all lawyers’ agents are within the scope. When a lawyer uses irregular staff members, privilege may be destroyed unless the lawyer takes care to ensure privilege attaches (eg, by engaging the person directly, in writing, with a contract stating that the services are for the purpose of providing legal advice).

Corporations claiming protection

Can a corporation avail itself of the protections for attorney-client communications? Who controls the protections on behalf of the corporation?

Yes, a corporation can avail itself of the protections for attorney-client communications. Both in-house counsel and outside counsel represent the incorporeal institution, not its employees or directors. Within the corporate structure, separate entities can retain their own counsel. The lawyer represents the corporate entity that hired him or her – such as a board, an audit committee or a pension plan.

Generally, only high-level executives can waive the company’s privilege. That said, some courts allow any employee who has access to the privileged communication to waive privilege. Also, the company’s lawyer can waive privilege when authorised.

Communications between employees and outside counsel

Do the protections for attorney-client communications extend to communications between employees and outside counsel?

Yes, communications between an employee and outside counsel can be privileged – as long as the communication is for the purpose of providing legal advice and the employee is discussing matters related to his or her employment.

To assess whether the employee-lawyer communication is privileged, federal courts and many states use the ‘functionality test’ articulated in Upjohn v United States. Upjohn requires the court to evaluate the role the employee played in the conduct at issue and the facts the employee possessed.

The minority rule, used by a handful of states, allows only the company’s ‘control group’ to engage in privileged communications with company counsel. The control group consists of high-ranking employees who are responsible for corporate decision-making.

Communications between employees and in-house counsel

Do the protections for attorney-client communications extend to communications between employees and in-house counsel?

Yes, communications between employees and in-house counsel can be privileged as long as they meet either the Upjohn test or the ‘control group’ test, depending on the jurisdiction.

Communications between company counsel and ex-employees

To what degree do the protections for attorney-client communications extend to communications between counsel for the company and former employees?

Attorney-client privilege extends to a communication between company counsel and a former employee as long as the communication meets the Upjohn standard or the control group test. The communication between the former employee and company counsel must also be for the purpose of providing legal advice, rather than business advice.

However, a communication between company counsel and a former employee is not privileged when company counsel provides information to the former employee regarding developments that occurred after the employee left the company.

Who may waive protection

Who may waive the protections for attorney-client communications?

The client and the client’s successors in interest may waive their own privilege. When an attorney jointly represents more than one client, a client can waive privilege only as to his or her own communications with the lawyer. For any communication involving other jointly represented clients, all the clients must unanimously consent to any waiver of privilege. In the context of a joint defence or common interest agreement, the power to waive privilege is treated largely the same way as joint representations.

A lawyer, as an authorised agent, can also waive privilege on his or her client’s behalf – but only with the client’s authorisation.

Actions constituting waiver

What actions constitute waiver of the protections for attorney-client communications?

Two kinds of waiver can occur: express and implied. An express waiver occurs through any intentional disclosure of a privileged communication and can occur despite a confidentiality agreement or disclaimer. Express waivers must also be voluntary; a thief cannot destroy privilege by disseminating stolen privileged documents.

An implied waiver occurs without an actual disclosure of a communication. When a party relies on the fact of a privileged communication or affirmatively raises an issue that implicates privileged communications, an implied waiver occurs.

Either type of waiver – whether express or implied – can trigger a subject-matter waiver. A subject-matter waiver requires disclosure of additional privileged communications regarding the same subject matter. This prevents litigants from selectively waiving privilege for materials; all materials concerning that subject must be disclosed if privilege is waived for any single related communication.

Accidental disclosure

Does accidental disclosure of attorney-client privileged materials waive the privilege?

Inadvertent disclosure in civil pretrial discovery is governed by Federal Rule of Civil Procedure 26(b)(5)(B), which provides that if privileged information is inadvertently disclosed during discovery, then the party claiming privilege has an opportunity to prevent waiver. First, the party claiming privilege must notify the party that received the information. Then, the recipient of the privileged information must promptly return, sequester or destroy the information. The recipient cannot make use of the information until the claim of privilege is resolved.

Under Federal Rule of Evidence 502, inadvertent disclosure in a federal proceeding or to a federal agency does not constitute waiver if:

  • the disclosure was inadvertent;
  • the privilege holder took reasonable steps to prevent disclosure; and
  • the privilege holder promptly took reasonable steps to rectify the error.

 

In this context, ‘inadvertent’ means ‘accidental’. The federal courts have generally adopted the same standard in non-litigation proceedings.

Recently, parties have begun entering into confidentiality agreements with ‘clawback’ provisions, which provide that an inadvertent disclosure does not constitute waiver when certain remedial steps are taken. Courts generally require parties to abide by the terms of such agreements.

Sharing communications among employees

Can attorney-client communications be shared among employees of an entity, without waiving the protections? How?

Attorney-client communications can be shared among employees of an entity without waiving privilege only when the employees who receive the information are those who ‘need to know’ a lawyer’s legal advice. When the lawyer’s communication is shared beyond those who need to know, attorney-client privilege is destroyed. Generally, courts define those who need to know to mean agents of the organisation who reasonably need to know the contents of the communication to act on behalf of the organisation. However, courts have noted that company-wide dissemination of advice may implicate business advice as opposed to legal advice, which means that attorney-client privilege did not attach to the communication in the first instance.

Exceptions

Describe your jurisdiction’s main exceptions to the protections for attorney-client communications.

The US legal system recognises two primary exceptions to the attorney-client privilege: the crime-fraud exception and the fiduciary exception.

Attorney-client privilege does not extend to communications between an attorney and client where the client uses the legal advice to later engage in unlawful conduct. This is known as the ‘crime-fraud’ exception. Some courts disagree on the types of fraud to which the exception applies ­– some limit the exception to common-law fraud and others extend the exception to all frauds. Courts also disagree about whether the exception applies to other forms of misconduct such as intentional breach of fiduciary duty and intentional torts.

Under the fiduciary exception, a fiduciary cannot claim the protections of attorney-client privilege when a third-party beneficiary seeks fiduciary-attorney communications concerning legal advice sought by the fiduciary in exercising the fiduciary’s duties and responsibilities. This is because the attorney owes the beneficiary a duty of full disclosure when he or she advises a client acting as a fiduciary for that beneficiary.

While technically not an exception, when a litigant uses ‘advice of counsel’ as an affirmative defence, he or she cannot then withhold from discovery his or her lawyer’s communications concerning that advice.

Litigation proceedings overriding the protection

Can the protections for attorney-client communications be overcome by any criminal or civil proceedings where waiver has not otherwise occurred?

No, it is an absolute privilege.

Recognition of foreign protection

In what circumstances are foreign protections for attorney-client communications recognised in your jurisdiction?

Traditional choice-of-law principles generally apply. First, the court determines whether the potentially applicable US privilege rule conflicts with the potentially applicable foreign rule. If the rules do not conflict, then the court applies the consistent standard. If they do conflict, then the courts generally apply a ‘touch-base’ test, which assesses whether the attorney-client communication sufficiently touched base with the United States to justify applying the US privilege rule. If the communication fails the touch-base test, the foreign rule applies – unless other choice-of-law principles foreclose its application.

Best practice to maintain protection

Describe the best practices in your jurisdiction that aim to ensure that protections for attorney-client communications are maintained.

Lawyers should carefully protect confidential communications. When a communication loses its confidentiality, through negligence or purposeful conduct, it can lose its privilege. Lawyers should use secure computer networks for client communications and lawyers should also refrain from engaging in confidential communications in public.

Additionally, simply copying a lawyer on a written communication does not make the communication privileged. Moreover, doing so can cause lengthy battles concerning whether the communication is privileged and can unintentionally trigger a subject-matter waiver.

Lawyers should also carefully label documents and provide privilege logs when producing documents to an adversary or a government agency. Under Federal Rule of Civil Procedure 26(b)(5)(A)(ii), failure to provide a detailed and accurate privilege log to ‘enable other parties to assess the claim’ of attorney-client privilege can result in waiver.

Concerning document production, clawback agreements allow parties to disclose privileged materials without waiving privilege under certain circumstances. Courts usually give effect to such agreements.

In the context of internal investigations, company lawyers often give an ‘Upjohn warning’ to company employees before interviewing each employee. The warning explains that the lawyer represents the company rather than the individual employee, that the communication is privileged and that the privilege belongs to the company. Providing such a warning helps preserve privilege by notifying the employee that the conversation is confidential.

Law stated date

Correct on:

Please state the date on which the law stated here is accurate.

March 2020.