Transcript Attorney Client (Tx Rule 503) - Association of Corporate Counsel

EFFECTIVE IN-HOUSE
COMMUNICATIONS AND
PRESERVING THE PRIVILEGES
Presented By:
August, 2006
John Eldridge
Haynes and Boone, LLP
(713) 547-2229
and
Chris Chaffin
BMC Software
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PRIVILEGES
(FRE 501)
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Attorney Client (Tx Rule 503)
Work Product Doctrine (TRCP 192)
Against Self-Incrimination (5th Amendment)
Husband – Wife (Tx Rule 504)
Communications to Clergy (Tx Rule 505)
FRE 501
Statutory Basis (States) and Common Law Basis
(Federal)
• In Diversity Cases, State Law
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General Overview of the AttorneyClient Communication Privilege
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In order to establish the attorney-client
communication privilege , there must be a:
Communication
between a Lawyer
and Client
that was Confidential
and remained Confidential
for the purpose of seeking or giving Legal Advice,
not business advice.
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Who is the Lawyer?
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Who is the Lawyer?
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Rule 503
Corporate Counsel
Corporate Counsel, Licensed in any State
Foreign Attorneys
Outside Counsel
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Who is the Lawyer?
• Rule 503 of the Texas Rules of Evidence:
A “lawyer” is a person authorized, or
reasonably believed by the client to be
authorized, to engage in the practice of law
in any state or nation.
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Who is the Lawyer?
Agents or “Representatives” of the Attorney
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Accountants
Investigators
Consultants
Patent Agents
Special Counsel
Paralegals
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Who is the Lawyer?
• A “representative of the lawyer” is:
(A) one employed by the lawyer to assist
the lawyer in the rendition of professional
legal services; or
(B) an accountant who is reasonably
necessary for the lawyer’s rendition of
professional legal services
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In-House Counsel as Client
or Attorney
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Business Advice versus
Legal Advice
• Where in-house counsel is also involved in the
business matters of the company, e.g. as an
officer of the company, the company must show
that the advice was given when the lawyer was
wearing the lawyer’s hat
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Negotiating a Contract
• When in-house counsel is negotiating a contract,
privilege not likely
• Negotiation is viewed more as business function
• Case specific decisions by courts
• Use outside counsel or have a business person
involved in the negotiation
• Prepare a memo describing roles of the
participants
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Who is the Client?
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Rule 503
Agents or Representatives of the Client
Employees
Consultants & Independent Contractors
Accountants
Appraisers
Insurance Agents
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Who is the Client?
• Rule 503 of the Texas Rules of Evidence
A “client” is a person, public officer, or
corporation, association, or other
organization or entity . . . who is rendered
professional legal services by a lawyer, or
who consults a lawyer with a view to
obtaining professional legal services from
that lawyer.
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Who is the Client?
• A “representative of the client” is:
(A) a person having authority to obtain
professional legal services, or to act on
advice thereby rendered, on behalf of the
client; or
(B) any other person who, for the purpose
of effectuating legal representation for the
client, makes or receives a confidential
communication while acting in the scope of
employment for the client.
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Not all Corporate Employees
are “Clients”
* Corporate clients can share their knowledge
of legal advice under some circumstances
with other employees.
* Dissemination of legal advice beyond those
who “need to know” may waive the
privilege.
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Corporate Employees
– “Control Group” rejected by Supreme Court –
– Texas Rule 503
– “Subject-matter Test”
• The Control Group test was arbitrary.
• “Need to Know” is appropriate guideline
– Restrict distribution of sensitive material
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Consultants and
Independent Contractors
• Is disclosure of attorney client communication
“reasonably necessary” in order to inform the attorney
of all pertinent facts.
• Insurance Agent
• Accountant
• Appraiser
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Inter-Corporate Communications
• Legal advice disseminated to wholly owned
subsidiaries held not to be a waiver
• Parent corporation and subsidiaries share a unity of
interest such that the parent (as well as the
subsidiary) is the ‘client’ for purposes of the
attorney-client privilege
• Documents from subsidiary’s in-house counsel to
parent’s in-house counsel, prepared for the purpose
of obtaining legal advice or opinions, are
privileged communications between client and
attorney or as communications among counsel
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Common Interests
• “Joint Defense” privilege
• Rule 503 of the Texas Rules of Evidence:
Confidential communications between a
client or lawyer and another lawyer
representing a party in a pending action and
concerning a matter of common interest.
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Common Interests
(Joint clients who later become adverse)
• Rule 503 of the Texas Rules of Evidence
provides that “there is no privilege as to
communications relevant to a matter of
common interest between or among two or
more clients if the communication was
made by any of them to a lawyer retained or
consulted in common, when offered in an
action between or among any of the
clients.”
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What is a Confidential
Communication?
• Rule 503 of the Texas Rules of Evidence:
A communication is “confidential” if not
intended to be disclosed to third persons
other than those to whom disclosure is made
in furtherance of the rendition of
professional legal services to the client or
those reasonably necessary for the
transmission of the communication.
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Confidential Communication?
• Communications often privileged if joint
defense, but not if business enterprise
• Former employees - - may reveal
information to others (e.g., new employer);
treated as failed waiver
• Communications with auditors generally
not privileged
• Presence of other people
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What Communications are
Privileged?
• Non-Confidential Information Provided to
Attorney
– Information that is not privileged when communicated
to the attorney does not become privileged merely
because it is communicated to an attorney
• Privilege Attaches to the Communication Itself
– The privilege does not attach to the facts communicated,
it attaches to the communication itself
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What Communications are
Privileged?
• Transacting the General Business of the
Company
– Routine, non-privileged communications
between employees transacting the general
business of the company do not attain
privileged status merely because an attorney is
“copied” on the correspondence or memoranda
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What Communications are
Privileged?
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Client’s Recording of Facts
Business Advice vs. Legal Advice
Legal Advice Discussed by Clients
Patent Work
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What Communications are
Privileged?
•Drafts prepared by counsel or circulated to
counsel for legal advice are privileged if for the
purpose of giving or obtaining legal advice.
• If draft is provided to a third party, no
privilege.
• If draft is not in connection with litigation it is
not Work Product. Can only claim Attorney
Client Privilege.
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The Work Product Exemption
• Rule 192.5 of the Texas Rules of Civil
Procedure defines Work Product:
(1) Material prepared or mental impressions
developed in anticipation of litigation or for
trial by a party or a party’s representatives,
including the party’s attorneys, consultants,
sureties, indemnitors, employees, or agents;
Or
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The Work Product Exemption
• Rule 192.5
Or
(2) a communication made in anticipation
of litigation or for trial between a party and
the party’s representatives or among a
party’s representatives, including the party’s
attorneys, consultants, sureties, indemnitors,
insurers, employees or agents.
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Examples of Documents that are
Not Work Product
• Topic outline prepared by in-house counsel
for an oral presentation.
• Consultant documents submitted to
regulatory authorities
• Materials prepared in the ordinary course of
business or pursuant to public requirements
unrelated to litigation.
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Examples of Documents that are
Not Work Product
• Draft contract prepared by transactional
attorney
• Internal memorandum from one attorney to
another reviewing transaction for client
• Attorney notes made before litigation was
contemplated
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Examples of Documents that are
Not Work Product
• Litigation Disclosures concerning experts,
trial witnesses, witness statements,
contentions
• Trial exhibits
• Identification of potential parties and
potential witnesses
• Photographs to be offered into evidence
Rule 192.5 of the Texas Rules of Civil Proc.
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Examples of Work Product
• Attorney notes from interview of witness in
anticipation of litigation or in connection with
litigation
• Documents prepared in connection with litigation
that has concluded.
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Ethical Issues – Texas Disciplinary
Rule 1.05
• “Confidential Information” includes “privileged
information”
• Rule refers to FRE 501, TRE 503
• Lawyer obligated not to reveal confidential
information, except:
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when authorized by client
when client consents
to client representatives
to comply with Court orders
to prevent crime or fraud (by client)
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Electronic Data and
Communications
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Same rules apply as to paper documents
Identify attorneys
Identify all recipients
Be careful to designate as confidential
Encryption
• Limit distribution
• Segregate factual information
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Protecting E-mails
• Use an appropriate subject line referencing
the litigation or subject matter
• Write your emails like you would a letter
instead of like a phone call
• If your client’s email could be read out of
context, clarify your client’s email in your
response
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Protecting Emails, continued
• Use language that clearly shows you are
providing advice or responding to a request
for advice
• Limit the dissemination of your email and
advise your client not to forward emails
from attorneys to non-attorneys or to nonemployees.
• Be careful to reply to the correct email, not
the email that was attached
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Waiver of the Privilege
• Intent – If communication was intended to be communicated to a third party, it
will not be protected by the attorney-client privilege
• Voluntary/Consensual Disclosure – if the holder of the privilege, i.e. a client representative, voluntarily
discloses or consents to disclosure of any significant part of a
communication, the privilege is waived
• Subject Matter v. Communication – Disclosing a subject discussed with an attorney does not waive the
privilege; waiver occurs if the person discloses part of the
communication itself
• Selective Disclosure
– Disclosure of part of a privileged communication may waive the
attorney-client privilege as to the whole communication
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Electronic Discovery
• New Federal Rules (12/06) will address some
issues on privilege (Rules 26, 16)
• Costs of E-Discovery can be huge
• Parties should agree about privilege claims (e.g.,
that inadvertent disclosure can be reviewed)
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Making it Easier to Claim
Privilege
• Inform your clients of the rules
• Mark your privileged communications as
privileged.
• Don’t mark your non-privileged
communications as privileged
• Make sure you include a signature block
with information that shows you are an
attorney
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Internal Investigations
• Highly sensitive information – need to establish
privilege and work product protections
• Voluntary waiver by corporations is more frequent
(DOJ guidelines regarding corporation)
• Waivers can lead to private litigation and
“torched” employees
• Selective waiver not favored by courts
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International Issues
• Privileges not as robust in most other
countries
• Europe accords protections primarily to
outside counsel, not inside, but this could be
changing
• Difficult for in-house counsel to count on
confidentiality in Europe
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