|
 |
|||||||
|
|
|
|
|||||||||||||||||
|
|||||||||||||||||||
|
|
||
|
Reader
Profile Editor's note: Each month, we ask a Directors & Boards reader to comment on critical issues facing directors today. If you'd like to participate in this section in the future, please email Scott Chase. A Q&A with Jonathan S. Sack, Catherine M. Foti and Robert J. Anello, Principals at Morvillo, Abramowitz, Grand, Iason, Anello & Bohrer, P.C.  Jonathan
S. SackQ: What is the attorney-client privilege, and how does it apply to corporations? A: When a client seeks legal advice from an attorney, communications between the attorney and client are considered privileged and may not be disclosed by the attorney to third parties without the client’s consent. The attorney-client privilege applies to business organizations as well as individuals, and to in-house counsel as well as outside attorneys. Application of the privilege can sometimes depend on whether the attorney is advising directors, officers or employees. The privilege protects communications when senior management and directors seek the advice of the organization’s attorneys. The privilege also generally protects communications when low- and mid-level employees seek the advice of the organization’s attorneys and the subject of the communications is within the scope of the employees’ responsibilities. Q: Does the attorney-client privilege protect all statements made to attorneys? A: No. When a company director, officer or employee makes statements to or in the presence of an attorney for reasons other than seeking legal advice, the communications are not protected by the attorney-client privilege. Application of the privilege can be complicated if the attorney has both a legal and business (or other) role. For example, if an attorney attends a board meeting and prepares minutes, only the statements and corresponding portions of the minutes that relate to requests for legal advice are privileged. Similarly, if an in-house attorney attends a business strategy meeting, the statements about the organization’s business and attorney’s input will not be privileged unless they relate chiefly to legal advice. Q: Are the fruits of an internal investigation by counsel protected by the attorney-client privilege? A: When an attorney for a company conducts an internal investigation, the facts gathered and conclusions drawn – sometimes written as a report – are normally protected by the attorney-client privilege. Such information and reporting may also be protected by the “work product” doctrine, which protects from disclosure factual and legal analyses prepared by or on behalf of attorneys in anticipation of litigation. Unlike the complete protection of the attorney-client privilege, work product protection is qualified and can be overcome through an adversary's showing of "substantial need" for the analyses or "undue hardship" unless the analyses are disclosed. In recent years, organizations have come under pressure to waive the protection of the attorney-client privilege and work product doctrine in order to assist law enforcement authorities in their investigations. This pressure has been reduced somewhat due to several recent developments.  Catherine M. FotiQ: Can materials protected by the corporation’s attorney-client privilege lose their privileged status? A: The attorney-client privilege can be waived when a lawyer or client discloses privileged information to a third party. In the corporate context, directors, senior management or corporate counsel may waive the corporation’s attorney-client privilege by disclosing privileged materials. Even when mid-level and low-level employees are not authorized to disclose privileged materials, disclosure by such employees still can waive the privilege. Whether disclosure by mid-level or low-level employees results in a waiver of the privilege depends on the circumstances, including the reasonableness of the precautions taken to prevent unauthorized disclosure and the diligence of the corporation’s efforts to rectify the unauthorized disclosure. Q: What happens to the corporation’s attorney-client privilege if a director, corporate officer or corporate counsel inadvertently discloses privileged materials to a third party? A: If a director, corporate officer or corporate counsel makes an inadvertent disclosure of privileged information, such as accidentally sending a fax or email containing privileged information to a third party, in most jurisdictions the attorney-client privilege is not necessarily waived. Whether the privilege has been waived will depend on the circumstances, including the corporation’s use of reasonable precautions to prevent the disclosure, the time taken to rectify the disclosure and the extent of the disclosure. Corporate employees should immediately notify corporate counsel in the event of an inadvertent disclosure of privileged materials. This will enable counsel to take action to protect the privileged status of the disclosed materials, such as notifying the opposing party and asking them to refrain from reviewing or using privileged information.  Robert J. AnelloQ: Does the attorney-client privilege apply outside the United States? A: The European Union and its member countries take a wide-ranging and varied approach to the corporate attorney-client privilege and its application to communications with outside and inside counsel. In many instances, communications between company executives and in-house lawyers abroad are not protected by the privilege in the same way that the communications would be protected in the United States. Further, it is unclear whether the privilege would be extended under any circumstances to a lawyer not qualified to practice in the European Union. Because communications may pertain to matters in both foreign and United States jurisdictions, implicating the privilege law of multiple jurisdictions, the varying limits of corporate attorney-client privilege abroad must be recognized. To protect and encourage uninhibited confidential communication between companies and their attorneys, corporate counsel should be familiar with conflicts among state, federal and international law regarding the application of the corporate attorney-client privilege. |
|
|
Copyright © 2012 Directors & Boards, P.O. Box 41966 Philadelphia, PA 19101-1966. All rights reserved. Contact the webmaster. < Privacy Notice > |
|||
