A recent decision across the pond in Washington D.C. should serve as a warning to corporations hoping to rely upon legal privilege when embarking on internal investigations.
The District Court has confirmed that the correct approach in determining whether legal privilege applies, is to consider whether obtaining legal advice was “one of the significant purposes” of the investigation.
The Court in United States ex rel. Barko v. Halliburton Company et al found that internal investigations conducted by Halliburton pursuant to their Code of Business Conduct did not attract legal privilege as they were conducted within the ordinary course of business, without the contemplation of litigation. As a result Halliburton was ordered to disclose numerous documents that had been created as part of the investigations.
Halliburton argued that a report generated by investigators and sent to the in-house legal department was protected by attorney-client privilege and the attorney-work doctrine. However, the Court rejected Halliburton's arguments on the basis that the investigations were carried out as a matter of corporate policy, in line with government regulations and not for the purpose of obtaining legal advice. Furthermore, the fact that the investigations, which involved interviewing personnel, reviewing relevant documents and obtaining witness statements, had been conducted by non-attorney investigators further indicated that the documents were not prepared in anticipation of litigation.
It is not just Courts in the US that have recently considered the application of legal privilege where documents are produced for dual purpose. In Rawlinson and another v Akers and another  EWCA Civ 136, the Court of Appeal rejected an appeal against the decision that there was no litigation privilege in five reports obtained by liquidators, where the liquidators had failed to show that the documents had been produced for the "dominant purpose" of litigation.
Both cases highlight how important the early engagement of lawyers can be when commencing investigations. In order to ensure privilege is preserved over documents created, lawyers need to have a substantial involvement from the start of investigation.
Conducting internal investigations without losing privilege
- The most secure approach to ensure privilege is maintained is to instruct external lawyers to conduct the internal investigation. That way any witness statements or reports produced by those lawyers will attract privilege.
- Investigations can be kept light-touch yet still attract privilege if they are conducted by internal personnel, but at the close direction of external lawyers. However, be careful when transmitting documents or emails to non-lawyer colleagues as such actions can result in privilege being waived. Seeking advice from legal advisors during each stage of the investigation is vital to maintain privilege over any documents produced.