Are Interview Notes of An Investigation Protected by Legal Advice Privilege?

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Are Interview Notes of An Investigation Protected by Legal Advice Privilege?A recent decision of the High Court in England has shed light on the issue of legal advice privilege and in particular who can be considered to be the "client".

The decision, which compelled a defendant bank to provide copies of confidential internal notes to plaintiff investors provides a reminder to give careful consideration to who the client is and to instructing external counsel early in an investigation to avail of legal advice privilege.

The RBS Rights Issue Litigation [2016] EWHC 3161

The decision in this case arose out of the discovery process in the ongoing complex litigation where the claimant shareholders of the Royal Bank of Scotland (RBS) were seeking to recover investment losses incurred further to the collapse of RBS shares on the grounds that the prospectus for the 2008 rights issue of shares in RBS was not accurate or complete. Here the Court had to consider whether legal advice privilege attached to notes of interviews with current and former employees of a corporation as part of an investigation by in-house and external lawyers.

In the previous case of Three Rivers District Council & Ors v Governor and Company of the Bank of England (No 5), the English Court of Appeal held that the ‘client’ was the Bingham Inquiry Unit (BIU), which comprised only three bank officials responsible for liaising with and instructing the bank’s lawyers. The Court rejected the argument that communications between any employee of the bank and the lawyers were privileged. The Court in RBS held that in a corporate context that meant information gathered from an employee (with no capacity to give instructions or to seek or obtain legal advice) is no different from information obtained from third parties, even if the information is collected by or in order to be shown to a solicitor to enable fully informed advice to be given to that solicitor's client, the corporate entity:

"the client for the purpose of privilege consists of only those employees authorised to seek and receive legal advice from the lawyer."

Ultimately the Court found that legal advice privilege in English law is confined to communications between lawyer and client and the fact that an employee may be authorised to communicate with the corporation's lawyer does not constitute that employee the client or a recognised emanation of the client.

Although the decision does not change the position under English law, it nevertheless provides an important illustration of legal advice privilege and in particular the need to appreciate who is the ‘client’.

It is important to note that the Court's view was that interview notes recording the lawyer’s own thoughts and comments with a view to advising the client would almost certainly be privileged – but that it must contain the sort of legal input to be capable of justifying the claim of privilege. The Court relied on the following examples given in Upjohn Co et al v United States et al (1981) 449 US 383 case as being the sort of details that would suffice for a claim of privilege of this kind:

"Thomas described his notes of the interviews as containing what I considered to be the important questions, the substance of the responses to them, my beliefs as to the importance of these, my beliefs as to how they related to the inquiry, my thoughts as to how they related to other questions. In some instances they might even suggest other questions that I would have to ask or things that I needed to find elsewhere."

As the Court was only dealing with legal advice privilege it did not deal with the question of when an investigation could become sufficiently adversarial enough to warrant litigation over this type of privilege.

What is the position in Ireland?

In general, privilege in Ireland is governed by the decision in Smurfit Paribas Bank Ltd v A.A.B. Export Finance Limited [1990] 1 I.R. 469. There has yet to be a decision which deals with the issue regarding the specific corporate context here, but the Three Rivers case has often been referred to by the Courts and certainly other aspects of that case have met with approval here. Without any cases to the contrary the Three Rivers decision and the consequences thereof could be persuasive in an Irish court.

Until such a time as there is a decision which finds to the contrary it would be wise to adopt a cautious approach to defining who the client is in the corporate context.

Contributed by Catherine Thuillier of LK Shields.