Working out what is (and what isn’t) legally privileged has always been tricky, both for lawyers and non-lawyers alike. A string of recent court decisions makes it even more difficult for employers to rely on legal privilege when conducting internal investigations.
Legal advice privilege
Legal advice privilege (or “LAP”) lets a client seek legal advice without the danger of that advice having to be disclosed in court or tribunal proceedings. The point of this rule is that clients should feel comfortable speaking openly and honestly with their lawyers; and lawyers should be comfortable giving difficult legal advice without the possibility of it being used against their client by an opponent.
To benefit from LAP:
(i) there must be a confidential communication…
(ii) … between a lawyer and a client…
(iii) … for the purposes of giving or receiving legal advice
A key issue clients and lawyers often have to grapple with when conducting investigations involving employees is how to keep those investigations privileged. Where there are no legal proceedings underway or contemplated, clients have to try to rely on LAP (rather than litigation privilege).
The problem is that the courts have decided that the courts’ definition of “client” (see the second requirement above) is narrow. Generally speaking, to be a “client” the individual has to be authorised to request and receive the legal advice on behalf of the organisation. Just having a lawyer involved in an internal investigation is not enough to keep the process privileged (in the same way just copying a lawyer into an email will not make that email privileged).
Take the following example:
- the Head of Compliance at ABC Ltd has asked an external lawyer to investigate allegations of racism following a whistleblowing complaint by one of ABC Ltd’s ex-employees
- at the end of the investigation, the Head of Compliance wants a confidential report setting out an analysis of whether ABC Ltd or any of its employees broke any laws
- the external lawyer interviews several employees and produces the report for the Head of Compliance
- the ex-employee brings a race discrimination claim in the Employment Tribunal, and asks for disclosure of the lawyer’s written notes as well as a copy of the final report
If the lawyer has made notes which show the “trend of their advice” or their impressions of the quality or content of the information provided by the interviewee, this might well be legally privileged because these notes are arguably being created for the purposes of giving legal advice to the Head of Compliance. However, if the lawyers’ notes of the interview are simply a record of the interview it is likely that they are not privileged. It is difficult to see how the employees being interviewed are “clients” of the external lawyer, as (at least in this context) they are not authorised to ask for and take legal advice relating to the investigation – they are simply responding to the lawyer’s questions.
There would be good arguments that the report itself is legally privileged. It is likely to be: (i) confidential (so long as it is not distributed too widely within ABC Ltd): (ii) from the external lawyer to the Head of Compliance (who is the person who was authorised by ABC Ltd to instruct the lawyer to give the legal advice); and (iii) produced by the lawyer for the purposes of giving the Head of Compliance legal advice.
What this shows is that organisations seeking legal advice are stuck between a rock and a hard place. The benefit of using lawyers is that they are experts in conducting interviews and investigations, and are in a better position to assess legal risk if they have heard the evidence first hand. Such an investigation will inevitably leave some form of paper trail. On the other hand, you can never know what an interviewee will say, and it might not be helpful to have to disclose notes of conversations at a later date. It would be unfortunate if organisations felt that the risks of creating non-privileged documents outweighed their genuine desire to use lawyers to help conduct thorough investigations so that they can get the best legal advice possible.
Hope on the horizon?
There is a glimmer of hope. A case which has just been heard in the Court of Appeal on the scope of legal privilege in internal investigations, which could result in courts interpreting “client” less restrictively. As the Law Society’s QC said in the case, “The [legal] profession needs authoritative and correct guidance on this issue and needs it urgently”. Hopefully the judges will give us that much-needed guidance.
- Before starting work, think carefully about what the purpose of the investigation is and whether you want to try and keep any (or all) of it privileged.
- Be clear with any lawyers involved (whether in-house or external) about their role when taking notes in any interviews. Is it only to record what the interviewee said, or to take notes of the lawyer’s impressions of the interviewee and possible legal issues or risks?
- Lawyers should try to avoid mixing up privileged and not privileged information in the same notes or documents.
- Consider labelling documents “Privileged and confidential”. Whilst this will not be conclusive, it might help show a court what your intention was when creating the documents.
- Be careful about creating an additional non-privileged paper trail (e.g. by creating new documents or sending emails, where the creators or recipients are not the lawyer or client, and where the purpose of creating the document is not to request, give or receive legal advice).