It is black-letter law that where a corporation is the client, the attorney-client and work-product privileges (for convenience, both will be referred to here as the "privilege") extend to the executives, directors, and other members of the corporation's "control group" (or whatever label a particular jurisdiction assigns to such individuals).
Corporations are entitled to the benefit of the attorney-client privilege, when communications otherwise meet this standard. However, not every communication between a corporation’s attorney and a corporate employee may meet this requirement. Courts historically relied on one of two tests to determine the applicability of the
Upjohn Co. v. United States, 449 U.S. 383, 395 (1981). Though it can be challenging to determine when the attorney-client privilege applies in the context of a corporation, the privilege’s protection does extend to in-house counsel even though the client is a corporation.
If new management is attempting to run the pre-existing business entity and manage its affairs, new management stands in the shoes of prior management and should control the attorney-client privilege with respect to the company’s operations.
information obtained by an attorney from other persons and sources while acting on behalf of a client was not protected by attorney-client privilege). D. Communication Must Be Made Between Client and Counsel
As used in this article, "holder of the privilege" means: (a) The client when he has no guardian or conservator. (b) A guardian or conservator of the client when the client has a guardian or conservator. (c) The personal representative of the client if the client is dead.
"The privilege for organizational clients can be asserted and waived only by a responsible person acting for the organization for this purpose." Restatement, Comment j. Generally, only top management may control the confidentiality of corporate information, and only on the corporation's behalf.
Who is the GC's client? Ultimately, the GC represents the corporation; not the CEO or management. The GC is accountable to the corporation's shareholders and other stakeholders, represented by the board of directors.
Evidence Code 954 is the California statute that makes communications between attorneys and their clients privileged and confidential. This is what is known as the “lawyer-client privilege” (or the “attorney-client privilege”).
This privilege protects all communications that occur between an attorney and a client for purposes of seeking or receiving legal advice. This means that clients and their attorneys can talk without restraint, or worry about how their comments might be interpreted were the other party to see them.
To be safe put "Attorney-Client Communication", "Privileged and Confidential" or "Attorney Work Product" in the subject of the e-mail, or on privileged documents.
GC is regarded as a traditional executive role, that of managing the legal compliance and corporate governance of a company. General Counsel handles court negotiations, conveys legal advice to the executives, manages the legal team and oversees compliance regulations.
For example in 91 percent of those companies, general counsel report to the CEO. In 83 percent, general counsel serve as the corporate secretary, indicating direct access to the board, and in 83 percent of those companies, general counsel are also responsible for compliance.
The role of chief legal officer is a newer position than the general counsel and in some ways is an expansion of the general counsel role. The CLO is a C-Suite position that focuses on the legal department but is also responsible for providing valid business solutions to arising problems.
Which of the following may not be protected under the attorney-client privilege? A client who orally confesses to a crime.
The main difference between attorney-client privilege and attorney-client confidentiality is that the former is an evidentiary principle while the latter is an ethical principle.
Which of the following best describes the attorney-client privilege? An attorney cannot be compelled to, nor volunteer to, reveal confidential communications made by the client to the attorney.
Attorney-client privilege refers to a legal privilege that works to keep confidential communications between an attorney and his or her client secret. This is the name given to the common law concept of legal professional privilege in the United States.
The purpose of the attorney-client privilege is to promote open and frank communications between clients and their lawyers. To represent a client effectively, lawyers must have access to all relevant information concerning the representation.
Death of a client. The privilege may be breached upon the death of a testator-client if litigation ensues between the decedent’s heirs, legatees or other parties claiming under the deceased client.
Specific sanctions may be imposed on an attorney who reveals confidential communications, but where there is the mere potential for disclosure, disqualification motions are common.
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In the corporate setting, the attorney-client privilege is unique in that the privilege attaches to the corporate entity, typically, and not to individual employees who communicate with the attorney. Similarly, the decision as to whether to waive the attorney-client privilege belongs to the corporation, not its employees.
The attorney-client privilege found its origin in Elizabethan England, initially as a protection and consideration for the “oath and honor of the attorney,” instead of a protection afforded the client. See Radiant Burners v. American Gas Association, 320 F.2d 314, 318 (7th Cir. 1963) (citing 8 Wigmore, Evidence § 2990 (McNaughton Rev. 1961); Kelway v. Kelway, 21 Eng. Rep. 47 (Ch. 1580)). A century later, courts recognized that the client was entitled to similar protection, and by the 18th century the privilege became substantially recognized as that of the client. Id. In the early 1700’s, courts recognized that privileged communications were made, “…first, during any litigation; next, in contemplation of litigation; next, during a controversy but not yet looking to litigation; and lastly, in any consultation for legal advice, wholly irrespective of litigation or even of controversy.” Id. The parameters of the modern privilege were set out in United States v. United Shoe Machinery Corp., 89 F. Supp. 357 (D. Mass 1950.)
In contrast, under the provisions of § 307 of the Sarbanes-Oxley Act, an attorney may report a client’s past acts. Further, § 307 provides a de facto exception to the privilege, plausibly, before corporate crime or fraud is conceived, committed, or discovered.
Attorneys who represent corporations involved in governmental investigations will likely need to walk a tight rope between compliance with government policies and the protection of attorney-client and work product privileges. This may require the attorney to maintain all internal investigatory documents, even if the corporate document retention policy calls for periodic document destruction, particularly if the company is on notice of the government investigation. Yet, to avoid a breach of the attorney-client privilege, these same attorneys may not voluntarily disclose the privileged documents to the government, even to avoid criminal sanction and even if a confidential agreement is in place.
Attorney-client privilege is one of the most important protections afforded to litigants in a lawsuit. This privilege protects all communications that occur between an attorney and a client for purposes of seeking or receiving legal advice. This means that clients and their attorneys can talk without restraint, ...
If the client brings a random friend to a meeting, or discusses a conversation that took place with an attorney with a stranger, then the privilege is eliminated because the conversation has been disclosed to a third party. Accordingly, conversations between clients and attorneys must be kept confidential and closely guarded.
If so, privilege does extend to the communication. If not, privilege does not extend. This test essentially creates a “control group” of higher level officials who an attorney can speak to while retaining privilege, but does not extend privilege to communications with lower-level employees. Other states, like Kansas, have not adopted ...
The communications were made confidentially and kept confidential. One of the important distinctions, according to the court in Upjohn, is whether an attorney is acting in a legal role or a business role when the communications occur. For example, many general counsel or outside counsel may offer business advice in addition to their legal services, ...
When setting up a relationship with outside counsel, or considering how to navigate communications with general counsel within your company, you should consider consulting with a business litigation attorney. Thanks to the lack of certainty in this area of the law, standards and recommendations may shift, and new law is always being created.
Accordingly, conversations between clients and attorneys must be kept confidential and closely guarded. When attorneys are dealing with individual clients, it is relatively easy to determine when the attorney-client privilege applies to communications and to make sure that those communications are protected. When communications begin ...
Third, if the corporation has a presence in or significant contact with multiple states, and therefore may be sued in multiple states, the situation becomes even more complex. The corporation must be doubly-sure to use caution to follow all applicable standards for all of the applicable states.
What is privileged? The attorney-client privilege protects: A communication. Between privileged persons (attorney, client, or in some cases, an agent) Made in confidence.
In board meetings, conference calls and other meetings: When discussing legal matters, Board meeting minutes should indicate clearly that: In-house counsel attended in his/her role as legal advisor. Discussions were for the purpose of providing legal advice. Discussions were confidential and intended to be privileged.
Examples of legal functions: Advising company on existing law. Analyzing conduct for conformity with law or judgments regarding law. Advising on imminent litigation.
An investigative report that is sent to an attorney or even authored by an attorney must still be primarily or predominantly of a legal character to be privileged. Under most circumstances, production of information to the Government waives privilege as to that information in subsequent civil suits.
Third parties may include the government, potential investors, lower level employees, or opposing parties (basically anyone other than the client, the lawyer, or in some cases, an agent of the client or lawyer). Common examples of privilege waivers: Forwarding a privileged email communication to a third party. ...
In-house counsel (where appropriate, with the assistance of outside counsel) should manage all investigations. Communications made by and to non-attorney employees serving as agents of attorneys in internal investigations are protected by the attorney-client privilege.
In communications with PR and crisis management firms: Ordinarily, communication between counsel and a public relations/crisis management firm is not considered privileged unless the party asserting the privilege can show that the communication was necessary for the client to obtain informed legal advice.
The attorney-client privilege is one of the oldest and most valued privileges in American society, and its operation as an evidentiary shield preserves the confidential nature of the lawyer-client relationship. [1] In the corporate context, courts have rarely questioned whether corporations are able to invoke this privilege, but have struggled to determine the extent to which the privilege protects communications between a corporation’s lawyers and its current and former employees. Although a few courts have addressed whether the privilege applies to former corporate employees, this issue remains unresolved for the majority of federal and state jurisdictions, including Louisiana. [2]
The exact scope of the corporate privilege has not been without controversy, however, and courts have struggled to define it over the years. In 1981 , the United States Supreme Court in Upjohn Co. v. United States rejected the “control group” test that had been adopted by some jurisdictions.
v. United States, [1] the Supreme Court determined that the attorney-client privilege attaches not just to individuals, but to corporations as well. Thus, as the client, the corporation, not management, holds the attorney-client privilege. While it is undisputed that corporations can hold these privileges, the corporation itself is a legal fiction: it lacks an ability to speak for itself. Who, then, speaks for the corporation when it comes to applying and waiving the attorney-client privilege?
Notably, the Sixth Circuit has not yet ruled on this issue. Because of the failure of the circuits to adopt a universal approach to a waiver of corporate privilege, corporate officers and directors must be particularly mindful when communicating with third-parties. Even though courts concede that corporations themselves hold ...
In the per-se waiver approach, courts find that any disclosure of otherwise privileged communications by a corporate officer waives the corporation’s attorney-client privilege. The case-by-case approach, however, rejects a per-se approach to waiver, instead of examining the facts of each case before determining the outcome.
Thus, Velsicol implements a per-se waiver, indicating that any corporate officer has the authority to waive the corporation’s attorney-client privilege, regardless of the fact that the corporation did not intend to waive.
The line of cases holding that a corporation may not invoke the privilege as to former directors or officers appears to originate from the Delaware case of Kirby v. Kirby, 1987 Del. Ch. LEXIS 463 (1987). In Kirby, three of the four siblings who controlled a charitable corporation sued the fourth sibling after they were allegedly ousted as directors. Kirby at *7. The ousted siblings sought a declaration that they were still directors and, in discovery, sought production of various privileged documents—some created before their ouster and some after. The documents pertained to various corporate legal matters but do not appear to have related to the specific issues in the litigation (at least, the opinion makes no such claim). When the corporation refused to produce the documents and the ousted siblings moved to compel, the Delaware Court of Chancery tried to strike a balance. It ordered production of all documents created prior to the ouster, and for those documents created after the ouster, the court ordered an in camera review to see if they met the traditional standards for "good cause."
The plaintiff director sought privileged documents from the corporation's outside law firm.
Weintraub, 471 U.S. 343 (1985), to attack the Kirby and Gottlieb premise that a corporation and its directors and officers are joint clients when legal advice is rendered through them.
At least in Milroy, the court said no, because the plaintiff "filed suit, in major part, to benefit himself," a fact that would be true in many cases. The court did note that the Milroy plaintiff failed to argue (or could not argue) that he was entitled to the documents "in his fiduciary role as a corporate director.".
If Kirby was intended to apply only in a limited context, however, the court in the frequently cited Gottlieb v. Wiles, 143 F.R.D. 24 1 (D. Colo. 1992), applied no such limitations. There, a former CEO sued his corporation and sought privileged documents created while he was still at the company.
There, a bankrupt corporation's largest creditor sued the former CEO for fraud, and the CEO moved to compel production of privileged documents to which he had access while still at the company. The court denied the former CEO's motion to compel for two distinct reasons. First, it disagreed with the Kirby and Gottlieb.
1, you represent a corporation in a suit against a former officer who has formed a competing company, usurped corporate opportunities, and otherwise breached his or her fiduciary duties.
The Attorney-Client Privilege. The attorney-client privilege may protect a communication from disclosure if five fundamental elements exist: (1) an attorney; (2) a client; (3) a communication; (4) a confidentiality that was anticipated and preserved; and (5) legal advice or assistance (as opposed to business or personal advice) ...
At the same time, if an attorney is overly restrictive or indiscriminately withholds documents, they risk losing credibility with opposing counsel and the court, which can make it more difficult to assert the privilege when necessary.
Corporate emails often involve multiple people with long chains of multiple communications and attachments. In making a privilege determination, one should be careful to note any third parties included on an email string who might break the privilege.
In-house counsel is often called upon to provide input beyond a legal opinion. They often fill senior leadership roles within corporations and engage in day-to-day business decision making outside of their role as an attorney.
The privilege likely only applies when that person is acting in a legal capacity. The determination of who is counsel is also more difficult with regard to corporate communications. In certain jurisdictions and situations, the privilege may include paralegals and assistants in the legal department.
Under the work product doctrine, communications and documents can be privileged even if the communication does not directly include or reference an attorney, if the work or communication was done at the direction of an attorney and in anticipation of litigation.
Communications between a corporation’s employees and in-house counsel “must be protected against compelled disclosure” where the communication satisfies the requirements of the attorney client privilege in the corporate context.