How to retain privilege and independence as in-house counsel Lucy Riddiford, General Counsel Chorus 7 May 2009
Foundation for claims of privilege <ul><li>Evidence Act: </li></ul><ul><ul><li>S.54(1) – applies to claims for legal privi...
In-house counsel and privilege <ul><li>Well established that in-house counsel can claim privilege on behalf of his or her ...
2 Stage Test: Commerce Commission v Bay of  Plenty Electricity Limited  <ul><li>Does the advice have a “relevant legal con...
Recent cases show Courts are very willing to look behind claims for privilege <ul><li>The Convenor, Legal Aid Review Panel...
To protect communications, in-house counsel must be acting in a legal context <ul><li>A practising certificate is a pre-re...
Some Brightlines (1) <ul><li>Privileged </li></ul><ul><li>Email to/ from lawyer with the dominant purpose of seeking/ givi...
Some Brightlines (2) <ul><li>Privileged </li></ul><ul><li>Email sent to others  in the business  to obtain information to ...
Creating EMAILS – a checklist for the business <ul><li>Starting point :  Assume that the exceptions will not apply.  Would...
EMAILS  (Cont’d) <ul><li>Does the email contain a summary of legal advice?  If you want to refer to legal advice – refer t...
OTHER DOCUMENTS eg reports, papers, memos, meeting minutes <ul><li>Starting point :  Assume that the exceptions will not a...
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How to Retain Privilege and Independence as In House Counsel (Lucy Riddiford, Chorus)

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  • How to Retain Privilege and Independence as In House Counsel (Lucy Riddiford, Chorus)

    1. 1. How to retain privilege and independence as in-house counsel Lucy Riddiford, General Counsel Chorus 7 May 2009
    2. 2. Foundation for claims of privilege <ul><li>Evidence Act: </li></ul><ul><ul><li>S.54(1) – applies to claims for legal privilege in legal proceedings: </li></ul></ul><ul><ul><ul><li>Privilege attracts only to advice from a legal adviser </li></ul></ul></ul><ul><ul><ul><li>As at common law, privilege attaches if the communication was: </li></ul></ul></ul><ul><ul><ul><ul><li>- Intended to be confidential; and </li></ul></ul></ul></ul><ul><ul><ul><ul><li>- Made in the course of giving/ receiving legal advice </li></ul></ul></ul></ul><ul><ul><ul><li>S.53(1) – common law applies outside legal proceedings (e.g. s.98 Commerce Act, s. 47G FTA) </li></ul></ul></ul><ul><li>Is a practising certificate necessary? </li></ul><ul><ul><li>Yes – for claims in legal proceedings </li></ul></ul><ul><ul><li>Maybe not – for claims in other contexts (but note that without a practising certificate, a Court is likely to find that the necessary indicia for legal advice do not exist, especially given the Australian cases). </li></ul></ul>
    3. 3. In-house counsel and privilege <ul><li>Well established that in-house counsel can claim privilege on behalf of his or her employer, as a client: Commerce Commission v Caltex (1997) </li></ul><ul><ul><li>“ [It] would seem that so long as in-house counsel are acting in their capacity as legal advisers, no distinction is to be drawn between in-house counsel and independent legal practitioners for the purposes of legal professional privilege.” </li></ul></ul><ul><li>The in-house Counsel must actually act in the capacity of a lawyer providing legal advice rather than as an employee </li></ul><ul><li>Courts may scrutinise in-house counsel more carefully – must demonstrate that have been acting as a lawyer and not simply as an employee possessing specialist skills. Crucial issue will be the capacity in which the legal adviser is approached. </li></ul>
    4. 4. 2 Stage Test: Commerce Commission v Bay of Plenty Electricity Limited <ul><li>Does the advice have a “relevant legal context”? Does the advice relate to the rights, liabilities, obligations or remedies of the client under either private or public law? If not, then legal advice privilege would not apply to any communications or documents in relation to that advice. </li></ul><ul><li>Objectively assessed, is it reasonable to expect the privilege to apply? If step one is satisfied then, on an objective assessment having regard to the policy underlying the justification for legal advice privilege, is the occasion on which the communication takes place and is the purpose for which it takes place such as to make it reasonable to expect the privilege to apply? </li></ul><ul><li>Note: the approach taken in the second step sees a potential erosion of the privilege. </li></ul>
    5. 5. Recent cases show Courts are very willing to look behind claims for privilege <ul><li>The Convenor, Legal Aid Review Panel v The Legal Services Agency-BC200760308 (March 2007), Wild J </li></ul><ul><ul><li>Wild J, applying the test in Bay of Plenty Electricity Limited, held that advice given by Specialist Advisers (who were lawyers) to the Legal Services Agency as to the appropriate course of legal proceedings covered by a legal aid grant, was not covered by legal professional privilege. The advice failed both limbs of the test. </li></ul></ul><ul><li>Todd Pohokura Ltd v Shell Exploration NZ Ltd (2008 18 PRNZ 1026) </li></ul><ul><ul><li>This was a number of discovery applications by various parties. One was a challenge to the description of emails in a list of documents, for which privilege was asserted in respect of legal advice given by/ sought from in-house Counsel. The emails were listed as “from Todd to Todd”. </li></ul></ul><ul><ul><li>Dobson J required: “for those communications where the internal legal adviser is among the recipients of a communication, additional detail is justified as to whether that legal adviser is the initial recipient of the communication, or is one of a number of subsequent addressees. In addition, the principal addressee should be identified where that is not the internal legal adviser.” </li></ul></ul><ul><ul><li>Alluded to the risk that “an exchange on commercial matters included the legal adviser so as to ostensibly clothe the exchanges with a sufficient legal “flavour” to justify subsequently withholding them from discovery.” </li></ul></ul>
    6. 6. To protect communications, in-house counsel must be acting in a legal context <ul><li>A practising certificate is a pre-requisite </li></ul><ul><li>Courts may follow the Australian trend and look for indicia of independence: </li></ul><ul><ul><li>Employment contracts and performance plans – make it clear that the lawyer has an obligation of independence </li></ul></ul><ul><ul><li>Remuneration structure – should not be too dependent on business unit profitability </li></ul></ul><ul><ul><li>Lawyers should report to other lawyers (note Telecom Undertakings requirement that Chorus has its own legal and regulatory advice) </li></ul></ul><ul><ul><li>Performance evaluations and remuneration decisions should be made by other lawyers </li></ul></ul><ul><ul><li>Premises and document security (including electronic) should be arranged to ensure appropriate confidentiality </li></ul></ul><ul><ul><li>Lawyers need to be appropriately qualified and trained </li></ul></ul><ul><ul><li>Lawyers should think of themselves as advisers and not players </li></ul></ul><ul><ul><li>Exercise caution about taking up non-legal roles, such as directors of subsidiaries </li></ul></ul>
    7. 7. Some Brightlines (1) <ul><li>Privileged </li></ul><ul><li>Email to/ from lawyer with the dominant purpose of seeking/ giving legal advice </li></ul><ul><li>Drafts of documents prepared for a lawyer to enable them to give legal advice </li></ul><ul><li>Email to/ from lawyer seeking/ giving advice and copied to someone else in the business for information purposes only </li></ul><ul><li>Email containing legal advice (or a summary of advice), forwarded through the business or to our “partners” (e.g. for Telecom, Alcatel-Lucent, EDS) Note: If sent to external companies, it will not be privileged if the recipient does not have the same interests. Bear in mind that once you copy other people, you cannot control what they do with the email. They may waive the privilege </li></ul><ul><li>Not Privileged </li></ul><ul><li>Email to/ from lawyer for any other purpose </li></ul><ul><li>Drafts of documents (incl. letters and exec/ board papers) prepared by the business and sent to the lawyer for review. </li></ul><ul><li>Email to/ from lawyer and to someone else in the business seeking comment. Note: the mere fact that an email has been sent or copied to a lawyer as well will not make it privileged </li></ul><ul><li>Email containing legal advice (or a summary) forwarded to other people outside the business if they have a different interest from Telecom. </li></ul>
    8. 8. Some Brightlines (2) <ul><li>Privileged </li></ul><ul><li>Email sent to others in the business to obtain information to enable a lawyer to give legal advice Note: it is safest to channel through a lawyer </li></ul><ul><li>Opinion from external accountant or economist obtained by a lawyer in the context of litigation (litigation privilege applies) </li></ul><ul><li>Not Privileged </li></ul><ul><li>Email containing confidential, sensitive information, or highlighting legal risks Note: this kind of email is only privileged if it is to/ from a lawyer with the dominant purpose of giving/ seeking legal advice </li></ul><ul><li>Opinion from external accountant or economist to anyone in the business </li></ul>
    9. 9. Creating EMAILS – a checklist for the business <ul><li>Starting point : Assume that the exceptions will not apply. Would you be happy with the email being seen by a third party? </li></ul><ul><li>Is it necessary to send the email? Is it better to talk in person or over the phone? Is your conversation appropriate (bearing in mind that people take notes of conversations and these are susceptible to disclosure) </li></ul><ul><li>Who should the email be sent to – avoid sending emails to multiple recipients if possible. This can lead to multiple email conversations, which can make discovery more onerous. </li></ul><ul><li>Use a new email for a fresh topic. Often sensitive material can be buried well down in an email chain. </li></ul><ul><li>If the email is to a lawyer seeking legal advice – mark it as such (although marking an email for legal advice will not make it privileged if the dominant purpose of the email is not to seek legal advice). Make sure the email is sent to the lawyer (not merely copied to). Do not copy emails seeking legal advice to multiple recipients in the business. </li></ul>
    10. 10. EMAILS (Cont’d) <ul><li>Does the email contain a summary of legal advice? If you want to refer to legal advice – refer to the document containing the legal advice, but do not summarise it. </li></ul><ul><li>Check the content and the tone: </li></ul><ul><ul><li>Would you be embarrassed if the email with your name on it was seen by the Commerce Commission? Or one of our competitors? Or became evidence in court? </li></ul></ul><ul><ul><li>Could the email be used to show an anti-competitive purpose? </li></ul></ul><ul><ul><li>Is there inappropriate personal material mixed in with the business content? </li></ul></ul><ul><ul><li>What would your email look like when put next to other documents – often a series of documents can build up an adverse picture where one document on its own would not. You won’t always have visibility over other emails or conversations. </li></ul></ul>
    11. 11. OTHER DOCUMENTS eg reports, papers, memos, meeting minutes <ul><li>Starting point : Assume that the exceptions will not apply. Would you be happy with the document being seen by a third party? </li></ul><ul><li>Do not mark as confidential and legally privileged, unless the document is prepared for the purpose of seeking legal advice – wrong use of the marking can compromise documents that are genuinely legally privileged. If the document is prepared for the purpose of seeking legal advice, send it to a lawyer and don’t copy it to multiple recipients in the business (those copies of the document will not be privileged). </li></ul><ul><li>Do not summarise legal advice. If you need to refer to legal advice, refer to the document containing the advice. </li></ul>

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