June 01, 2016

Protecting Privileges in Cross-Border Investigations

An examination of three issues that are key to analyzing privilege in the international context.

David Siegal and Michael Scanlon

Tuesday morning as you sip your coffee, your telephone rings from your overseas transactional partner, asking if you can assist an ongoing sensitive internal investigation. The client, a publicly traded company with offices on multiple continents, is facing allegations of potential financial accounting irregularities. The client started its own investigation months earlier, prompted by an inquiry from a foreign government. In-house counsel based overseas has spearheaded the investigation to date, but now the company has received an informal inquiry from a United States regulatory agency covering similar topics. Your partner concludes that now is the time to get U.S. defense counsel involved—you.

The primary witnesses are located in several foreign countries. Time is of the essence. On the flight overseas, you are expected to read in-house counsel’s interview memoranda, and you are to begin questioning employees as soon as you land. As the plane taxies across the tarmac, you ask yourself: Is it safe to assume that your interviews of the foreign-based employees will be protected by the attorney-client privilege? Should you instead be considering bringing the witnesses to the United States? What about the memoranda of in-house counsel’s prior employee interviews; are those protected? If the company ultimately makes a presentation of its findings to foreign authorities, will protections be waived? What if those foreign authorities compel disclosure over the company’s objections—will that cause a broader waiver?

The emergence over the past several decades of the truly global economy has driven the practice of law across oceans and sovereign borders. Governments and private litigants alike—through multinational Foreign Corrupt Practices Act (FCPA) investigations, international antitrust disputes, and cross-border intellectual property enforcement, to name only a few—have rapidly expanded the reach of American law and legal practice and stretched the habitat of the American lawyer to virtually every corner of the globe. And yet, one of the core tenets of American law often taken for granted here—the confidentiality protection cloaking communications between client and lawyer—does not necessarily inhabit all those spaces with the same force. So you cannot simply assume your (or in-house counsel’s) communications with the overseas employees will be protected by the U.S. courts to the same degree they would be had those discussions occurred in the United States.

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