Sports Q&A – Privilege in internal investigations
18 December 2018
We sometimes need to conduct internal investigations, which can often relate to quite sensitive matters (which we would prefer not to be made public). However, I’ve heard that the content of these investigations is not always privileged. How does privilege work in internal investigations and do you have any tips about how to preserve it?
Back to basics: What is privilege?
The law of ‘legal professional privilege’ allows you to keep certain legal communications confidential. Legal professional privilege is made up of: (a) legal advice privilege, and (b) litigation privilege. Legal advice privilege applies to communications between a lawyer and their client for the purpose of giving or receiving legal advice. Litigation privilege, on the other hand, applies to confidential communications between parties or their lawyers and third parties in connection with existing or contemplated legal proceedings.
Internal investigations can involve one or both kinds of legal professional privilege.
The High Court’s decision in Serious Fraud Office (“SFO”) v Eurasian Natural Resources Corporation Limited (“ENRC”) last year rang alarm bells amongst lawyers and CEOs alike because the High Court concluded that the SFO’s investigation did not amount to “adversarial proceedings”, meaning a claim for litigation privilege was not justified.
The decision was subsequently appealed in September and the Court of Appeal overturned almost all of the High Court’s decision. The Court of Appeal instead found that when determining whether litigation is reasonably in contemplation, each case turns on its own facts. This decision has been widely welcomed and organisations are once again able to carry out internal investigations in the context of criminal proceedings safe in the knowledge that (subject to the ordinary requirements of litigation privilege), documents produced as a result of those investigations will be protected from disclosure.
Are internal investigations privileged?
Typically, there is no straightforward answer to this as much will depend on the facts. The difficulty with investigations is that they are most often fact finding exercises. There may be no litigation in progress or reasonably in contemplation, and large parts of the investigation may not involve giving or receiving legal advice.
Let’s take an example. A club becomes aware of a rumour that a player assaulted a member of the coaching staff one evening after training. The club’s general counsel seeks legal advice from a law firm and then shares this advice internally with all of the coaching staff. They also decide to conduct a series of interviews with the coaching staff to try to find out some more information.
Any legal advice received by the general counsel is likely to attract legal advice privilege. However, it may not retain its privileged status once disseminated to the coaching staff. Even if the club is receiving legal advice as part of an investigation, this does not mean everyone working at the club will be the “client” for the purpose of legal advice privilege. The concept of who is the client has been interpreted quite narrowly. Previous court decisions suggest that, rather than the club as a whole, the client will be a smaller group of those individuals tasked with seeking legal advice on its behalf. It is really important, therefore, that you do not share legal advice beyond this group.
It also means that the investigatory interviews between the general counsel and the coaching staff (if, in the circumstances, the coaches are “non-client” employees) will not be privileged (unless litigation privilege applies).
As the assault is only a rumour at this stage, litigation privilege may not apply here. No allegations have actually been made; the club has simply been made aware of complaints made by some players to one of the club’s staff. On the facts there is nothing to suggest that any players have brought proceedings against the club, or that such proceedings are in contemplation. A mere apprehension of proceedings is not enough to attract litigation privilege.
How can I preserve privilege?
- There are a few ways you can help to preserve privilege when carrying out internal investigations:
- Mark all communications pertaining to legal advice as "privileged and confidential".
- Segregate privileged and non-privileged documents.
- Ensure that internal clients do not forward or create "new" documents that summarise or comment upon legal advice.
- Where external lawyers are instructed, be clear who is the “client” for the purposes of giving instructions and seeking/receiving legal advice.
- Ensure that communications between external lawyers and “non-client” employees are properly controlled. Outside of a litigation context such communications may not be privileged.
- If there is any doubt, assume that litigation privilege is not available and act accordingly.
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