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Understanding the essence and extent of privileged communications is vital for in-house counsel and their client businesses. At Paris Smith LLP, our dispute resolution lawyers can help you navigate the complexities of this fluid area of law.

This blog provides an overview of various types of privilege, when documents can be withheld, and some tips for undertaking internal investigations.

Introduction

Privilege is a legal concept that protects certain communications between parties and their lawyers from being disclosed to the court or to third parties. Not all communications are privileged. Let’s look at the most common circumstances in which privilege arises.

Legal Advice Privilege

Legal advice privilege covers confidential communications between a client and their legal advisor made for the purpose of seeking or providing legal advice.

In the context of in-house lawyers, it is important to establish who your “client” is, as privilege does not extend to all those employees with whom the lawyer happens to communicate. It is only those who are tasked with seeking or obtaining advice.

It is also important to note that documents created by a lawyer in a purely administrative or commercial capacity (taking Board Minutes, pure fact finding investigations) will not be covered by legal advice privilege. The lawyer must have on their “legal spectacles”.

Litigation Privilege

Litigation privilege applies to confidential documents and communications created for the dominant purpose of litigation, either existing, pending or in reasonable contemplation. This privilege extends to communications with third parties, such as expert witnesses, provided they are related to litigation. The litigation must be “adversarial” (involving conflict) rather than “inquisitorial” (involving examination). This means some regulatory proceedings can be excluded from litigation privilege.

The timing of the creation of the document is important. A document cannot gain privilege, it must be privileged from the outset.

However it is not necessary in this context to establish who an in-house lawyer’s “client” is.

Without Prejudice Privilege

Without prejudice privilege protects communications made in a genuine attempt to settle a dispute. These communications cannot be disclosed in court as evidence of admissions or concessions. It’s a tool to encourage open and honest negotiations without the fear of those discussions being used against the parties. But labelling a document “without prejudice” is not conclusive evidence of privilege – the purpose and intent will be scrutinised.

Loss or waiver of privilege

Once gained, privilege endures indefinitely but it can be lost. Privilege may be waived expressly by disclosure or impliedly if the document is shared with third parties who are not part of the legal counsel team.

To ensure documents are appropriately withheld, businesses should maintain a clear record of all privileged communications and be cautious about the distribution of sensitive information. Proper documentation practices can safeguard against inadvertent waiver of privilege.

Tips for undertaking internal investigations

Internal investigations are a critical aspect of maintaining corporate compliance and addressing potential legal issues. During such investigations, it’s important to try and preserve the privilege of legally and factually sensitive communications where possible to protect the company’s interests. Here are some practical tips:

• Seek Legal Advice Early: Involve lawyers from the outset to ensure that the investigation is guided by legal expertise and that communications remain privileged.
• Limit Distribution: Restrict access to privileged information to only those who need to know within the legal team and senior management.
• Clear Communication: Clearly label privileged communications as “Confidential – Legal Advice” or “Privileged” or “Without Prejudice” to avoid any ambiguity.

Conclusion

Understanding and navigating the intricacies of privilege is essential for in-house counsel and businesses. By distinguishing between privileged and non-privileged communications, knowing when documents can be withheld, and following best practices during internal investigations, companies can better protect their legal interests.
At Paris Smith LLP, we are committed to helping you understand and apply corporate privilege effectively. If you have any queries on privilege please do contact one of the In-house Counsel team.

Sign up for our upcoming In-house Counsel Session to gain deeper insights and practical guidance on managing privileged communications within your organisation.

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As such, our blogs and posts are not intended to advise you on the law and must not be relied upon as legal advice. If you require advice on a particular issue then please contact us and we will be pleased to help.