LEGAL ADVICE
The need for care when obtaining legal advice
Matthew Howse , Litigation and Dispute Resolution Partner at leading law firm Arthur Cox , explains why Northern Ireland businesses must clearly establish which employees are instructed to seek and receive advice from lawyers .
T
he question of legal advice privilege is one that will or at least should never be too far from the minds of senior managers and inhouse legal teams of banks and major corporates .
Legal advice privilege protects confidential documents and communications , and evidence of communications between a lawyer and a client , from being provided to the opposing side in subsequent litigation provided they are for the purpose of seeking and receiving legal advice .
Especially when conducting robust internal investigations , organisations need to know exactly what communications or documents are protected by legal advice privilege – and , more importantly , those that aren ’ t .
This topic was thrust back into the limelight recently in the highprofile Royal Bank of Scotland rights issue litigation , in which the judge ruled that some employees who took part in internal investigation interviews conducted by RBS ’ s lawyers did not form part of the ‘ client ’ for privilege purposes .
These documents were therefore not protected from disclosure in the litigation that subsequently followed .
The judge took the view that he was bound to reach this conclusion due to the precedent set by the narrow interpretation of client in the 2003 Court of Appeal decision in the ‘ Three Rivers No 5 ’ case .
Until February of this year it appeared that RBS was going to appeal this decision to the Supreme Court , meaning that the narrow and problematic definition of ‘ client ’ provided by the Three Rivers case that had stood for 14 years would have been revisited and hopefully clarified .
While we now know that won ’ t happen , the recent saga should refocus businesses on the nuances that exist around legal advice privilege .
It shone a light on the fact that the range of documents and communications protected by legal advice privilege is more limited than many businesses often realise .
As noted above , legal advice privilege is strictly confined to confidential communications between a lawyer and his or her client , for the purpose of giving or receiving legal advice .
The client for these purposes is a limited category of individuals consisting only of those authorised by the organisation to seek and receive legal advice .
Taking the RBS case as an example , this
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means that records of interviews with employees and former employees carried out by RBS ' s solicitors were not privileged .
The interviewees had been authorised to provide information for the purpose of obtaining legal advice , but they could not be treated as the client , as they were not individuals authorised to seek and obtain legal advice on behalf of RBS .
Therefore , businesses need to be fully cognisant of the definition of the client , otherwise they risk a counterparty in any subsequent litigation ( the litigation may not have been anticipated at the time the interviews were conducted ) obtaining copies of interview notes arising from internal investigations . This could be extremely damaging and steps should be taken to avoid it .
With the definition of the client restricted as it is , businesses need to ensure their internal communications are as comprehensively managed and efficient as possible .
They need to be fully aware of which employees are speaking to their legal advisors , and be sure that they are protected by legal advice privilege .
It is the responsibility of individual organisations – as a corporate governance matter to establish and clearly document who is instructed to seek and receive advice from lawyers .
Taking specialist legal advice at an early stage would increase an organisation ’ s chances of staying on the right side of legal advice privilege knowing exactly which documents are protected , and which are not .
MOREINFORMATION
The Litigation and Dispute Resolution team at Arthur Cox is well positioned to advise on the emerging trends in the civil justice system in Northern Ireland .
Please call + 44 28 9023 0007 for further information from Matthew or your regular Arthur Cox contact .