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Agenda

Agenda. What is lawyer-client privilege? Exceptions to lawyer-client privilege Lawyer-client privilege and litigation privilege When am I required to go “up the ladder”? Privilege and acting as privacy or compliance officer Providing legal advice as well as business or policy advice

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Agenda

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  1. Agenda What is lawyer-client privilege? Exceptions to lawyer-client privilege Lawyer-client privilege and litigation privilege When am I required to go “up the ladder”? Privilege and acting as privacy or compliance officer Providing legal advice as well as business or policy advice Advising members of the corporate family Retaining counsel for a Special Committee of the Board Common-interest and “deal team” privilege Privilege and internal investigations by in-house counsel The FAQs and the checklist Q and A

  2. What is Lawyer-Client Privilege? • “a rule of substance applicable to all interactions between a client and his or her lawyer when the lawyer is engaged in providing legal advice or otherwise acting as a lawyer rather than as a business counsellor or in some other non-legal capacity” - Canada (Privacy Commissioner) v. Blood Tribe Department of Health, [2008] 2 S.C.R. 574 • To be distinguished from: • the lawyer’s ethical duty of confidentiality • litigation privilege • legal professional and attorney-client privilege as exists outside of Canada • other concepts such as common interest privilege and settlement privilege

  3. Exceptions to Lawyer-Client Privilege • Exception or not caught by solicitor-client privilege?

  4. Exceptions (cont’d) Two recognized exceptions: 1. Public Safety 2. Innocence at Stake Ontario (Public Safety and Security) v. Criminal Lawyers’ Association, 2010 SCC 23 @ paragraph 53

  5. Public Safety Where a lawyer believes upon reasonable grounds that there is an imminent risk to an identifiable person or group, of death or serious bodily harm, including serious psychological harm, that would substantially interfere with health or well-being, the lawyer shall disclose confidential information where it is necessary to do so in order to prevent the death or harm, but shall not disclose more information than is required. CBA Code of Conduct, c. 4 Rule 2 Derived from Smith v Jones, [1999]1 SCR 455

  6. Innocence at Stake • Extremely Rare • R v. McClure, [2001]SCR 445

  7. Not Caught by Lawyer-Client Privilege • Communications in furtherance of a crime cannot possibly form part of an ethical professional relationship. But what is a “crime” for this purpose is not clear. It is not yet well settled whether the crime-fraud exception applies only to: • actual crime/fraud • all unlawful acts including tortious acts and perhaps breach of contract • true crime/fraud as well as tortious conduct that is akin to fraud Dublin v. Montessori Jewish Day School of Toronto (2007), 85 OR (3d) 511; 281 DLR (4th) 368 (leave to appeal granted but settled on appeal) Crime-fraud exception

  8. Lawyer-Client Privilege and Litigation Privilege • Lawyer-client privilege applies only to confidential communications between the client and his or her solicitor.  • Litigation privilege, on the other hand, can apply to communications of a non-confidential nature between the solicitor and third parties and even includes material of a non-communicative nature.  • Lawyer-client privilege exists any time a client seeks legal advice from his lawyer whether or not litigation is involved.  • Litigation privilege, on the other hand, applies only in the context of litigation itself. 

  9. Lawyer-Client Privilege and Litigation Privilege (cont’d) • Subject to waiver and limited exceptions, lawyer-client privilege is forever. • Litigation privilege ends with the dispute – but the dispute must truly be over. • Lawyer-client privilege exists because the justice system depends for its vitality on full, free and frank communication between those who need legal advice and those who are best able to provide it. • Litigation privilege exists to ensure the efficacy of the adversarial process. Parties to litigation, represented or not, must be left to prepare their contending positions in private, without adversarial interference and without fear of premature disclosure. Blank v. Canada (Minister of Justice), [2006] 2 S.C.R. 319

  10. Lawyer-Client Privilege and Litigation Privilege • Lawyer-client privilege applies only to confidential communications between the client and his or her solicitor.  • Litigation privilege, on the other hand, can apply to communications of a non-confidential nature between the solicitor and third parties and even includes material of a non-communicative nature.  • Lawyer-client privilege exists any time a client seeks legal advice from his lawyer whether or not litigation is involved.  • Litigation privilege, on the other hand, applies only in the context of litigation itself. 

  11. Lawyer-Client Privilege and Litigation Privilege (cont’d) • Subject to waiver and limited exceptions, lawyer-client privilege is forever. • Litigation privilege ends with the dispute – but the dispute must truly be over. • Lawyer-client privilege exists because the justice system depends for its vitality on full, free and frank communication between those who need legal advice and those who are best able to provide it. • Litigation privilege exists to ensure the efficacy of the adversarial process. Parties to litigation, represented or not, must be left to prepare their contending positions in private, without adversarial interference and without fear of premature disclosure. Blank v. Canada (Minister of Justice), [2006] 2 S.C.R. 319

  12. UptheLadder - When? • Keep in mind—who is the client? Federation Model Rule 3.02 (3) Although a lawyer may receive instructions from an officer, employee, agent or representative, when a lawyer is employed or retained by an organization, including a corporation, the lawyer must act for the organization in exercising his or her duties and in providing professional services. • Keep in mind—fidelity to law Model Rule 3.02 (7) When acting for a client, a lawyer must never knowingly assist in or encourage any dishonesty, fraud, crime or illegal conduct, or instruct the client on how to violate the law and avoid punishment. A PerilousJourney? No doubt. But remember “The smartest guys in the room” & Enron

  13. UptheLadder - When? (cont’d) • In other words -- gird your loins and channel Gary Cooper in “High Noon”! Let’s conduct a poll now…

  14. Polling Questions

  15. UptheLadder - When? (cont’d) • advise the person from whom the lawyer takes instructions and the chief legal officer, or both the chief legal officer and the chief executive officer, that the proposed conduct is, was or would be dishonest, fraudulent, criminal, or illegal and should be stopped; • if necessary because the person from whom the lawyer takes instructions, the chief legal officer or the chief executive officer refuses to cause the proposed conduct to be stopped, advise progressively the next highest persons or groups, including ultimately, the board of directors, the board of trustees, or the appropriate committee of the board, that the proposed conduct was, is or would be dishonest, fraudulent, criminal, or illegal and should be stopped; and • if the organization, despite the lawyer’s advice, continues with or intends to pursue the proposed wrongful conduct, withdraw from acting in the matter in accordance with Rule 2.07. Federation Model Code 3.02 (8) A lawyer who is employed or retained by an organization to act in a matter in which the lawyer knows that the organization has acted, is acting or intends to act dishonestly, fraudulently, criminally or illegally, must do the following:

  16. PrivacyOfficer/ComplianceOfficer • I wear several ‘hats’ – in-house lawyer, privacy officer, compliance officer • Does lawyer-client privilege protect my internal communications in all of these functions? Complying with law as the client representative vs advising the client on legal matters.

  17. PrivacyOfficer/ComplianceOfficer (cont’d) • Is privileged information accessible under FOI? • Check the privacy legislation in your jurisdiction to determine the ability to refuse disclosure • Review the case law - Statutory authority did not grant Privacy Commissioner access to privileged documents Canada (Privacy Commissioner) v. Blood Tribe Department of Health, [2008] 2 S.C.R. 574 • Privacy Commissioner (Ont) practice direction - not a waiver of privilege to produce when compelled to do so Office of the Information and Privacy Commissioner of Ontario, Practice Direction #1, August 2000, at para. 6

  18. Business and Policy Advice Business or policy advice and lawyer-client privilege • If an in-house lawyer is conveying advice that would be characterized as privileged, the fact that he or she is “in-house” does not remove the privilege, or change its nature. Pritchard v. Ontario (Human Rights Commission), [2004] 1 S.C.R. 809 at para. 21 • But, lawyer-client privilege does not extend to communications where legal advice is not sought or offered. The role of in-house counsel is not always a purely legal role. Not all communications with in-house counsel involve legal advice. Practical Tip:think of your headgear—what hat are you wearing?

  19. Advising Members of the Corporate Family • Privilege exists for the benefit of all of the joint clients equally as against the entire outside world • It takes all of the joint clients to waive privilege • Joint clients and the lawyer’s duty of candour Joint clients

  20. In corporate “families”, there is potential for joint retainers without that fact being recognized. As there can be no confidentiality between joint clients, there can be no privilege as between them. IN RE: TELEGLOBE COMMUNICATIONS CORPORATION, et al., While this does not permit access by third parties, if the interests of the members of the corporate family diverge, then there is the potential that otherwise privileged information could be used in litigation between them. Advising Members of the Corporate Family (cont’d)

  21. Polling Questions

  22. Special Committee of the Board • Goal: avoid the conflict issues that could arise and waiver of privilege • Clarify at the outset who is retaining external legal counsel? • Is the client the special committee of the board on behalf of the company? This is usually the case. • Are members of the special committee seeking personal assistance? This is relatively rare. • Clarity as to identity of the client with external legal counsel Boreta v. Primose Drilling Ventures Ltd., 2010 ABQB 383

  23. “Deal Team” Privilege • Generally, communication of privileged information to third parties waives privilege. • For corporations, lawyer-client communication must be through employees or other intermediaries. A third-party can be an intermediary for this purpose. • Sometimes, special expertise is required either for communication to the lawyer or interpreting the advice received. The classic example is the accountant. • “Deal team” privilege extends these concepts and recognizes that teams are assembled for complex deals and that the team members require legal advice for the deal.

  24. “Deal Team” Privilege (cont’d) Barrick Gold v. Goldcorp, 2011 ONSC 1325 I accept the general principles set out in the reasons of Justice Doherty in General Accident Asssurance Co., [1999] O.J. No. 3291 (C.A… which emphasize the limitation on third-party privilege that “extends to a function which is a central to the existence or operation of the client-solicitor relationship, then the privilege should cover any communications which are in furtherance of that function and which meet the criteria for client-solicitor privilege.” … I do not accept that there is to be expected a “deal team” extension of solicitor/client privilege in every complex commercial transaction where there is not a specific protocol that has been executed. In each instance the context, the parties and the framework for the establishment and maintenance of privilege must be established to the satisfaction of the Court. In this case from the review of documents, it does.

  25. “Deal Team” Privilege (cont’d) Barrick Gold v. Goldcorp, 2011 ONSC 1325 I accept the comments apply to this case from the recent decision of the British Columbia Supreme Court in Camp Development Corp. v. South Coast Greater Vancouver Transportation Authority, 2011 BCSC 88 at para.64: The nature of the interrelationship and of the dealings between [the client, the consultant and the lawyer] are a practical reality in major commercial projects where teams of individuals with focused expertise are assembled. All functions are not performed under a single roof, and the solicitor, though retained by a single client, may be required to give advice to different members of the team who work for the client. • The parameters of “deal team” privilege remain uncertain. Without a proper protocol, it is all too easy to involve third parties that truly don’t need to be involved and to lose privilege.

  26. Privilege and Internal Investigations Thinking carefully and clearly up front is important to maintain privilege and avoid becoming a witness • Who is the client? Just the company or also the ‘target’? • What is the purpose of the internal investigation? Only for the purpose of briefing counsel to obtain legal advice? • Who will do the investigating? • Will interviews be recorded? How? • Practical tip:consider external counsel; stronger presumption of legal assistance • If US angle, consider retaining US counsel

  27. Polling Question

  28. FAQs and the Checklist Guidance on strategies to protect privilege including avoiding: • waiver of privilege • claims that the information/documents were not kept confidential • claims that the communications were not for the purpose of obtaining legal assistance or for the purpose of litigation

  29. Polling Questions

  30. Q & A

  31. Experience the CBA ADVANTAGE: www.cba.org/pd

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