NO ATTORNEY CLIENT PRIVILEGES

The European Court of Justice, the highest court in the EU, has held that the attorney-client legal privilege does not exist with regard to communications between companies and their in-house attorneys*. The Court, reasoning that the protection is only applicable when the lawyer is fully independent, relied upon a prior lower court ruling, and ruled that documents obtained by a regulatory agency were not protected by the legal privilege. Let us consider the impact of this decision upon EU bank officers who require legal advice in a major compliance matter, when you discover certain information or evidence indicating bank misconduct or negligence. Whom do you call now ? 

Employees and officers at financial institutions located in the European Union should now be on notice that communications that they send or receive from in-house counsel do not enjoy confidentiality, and where appropriate, officers should seriously consider seeking out outside counsel, when soliciting legal opinions which will involve the prior disclosure of information which might incriminate the bank, or result in adverse regulatory action. To put it simply, if you are going to reveal anything potentially damaging to the bank, you should consider giving that information to independent [i.e. outside] counsel.

Of course, we have previously covered the circumstances in the United States, where banks are required to waive not only the attorney-client legal privilege, but the work-product privilege** as well. This is occurring in connection with cases where banks enter into a deferred Prosecution Agreement, Non-Prosecution Agreement in lieu of a criminal Indictment or Information, in a Federal criminal investigation, or a Securities & Exchange Commission investigation.

 

Is legal privilege for companies now an endangered species ? We cannot say, but prudence requires that you carefully consider the consequences of volunteering information to an attorney when you need a legal opinion; Watch yourself here and in fact attorneys in other countires can be made to testify according to the rules of that country. So if an individual is charged in Russia or Canada, his attorney in any other country can be forced to testify or face charges.