Privilege: key considerations from an Irish perspective
June 2024 | SPECIAL REPORT: INTERNATIONAL DISPUTE RESOLUTION
Financier Worldwide Magazine
June 2024 Issue
The ability to assert legal professional privilege is recognised as a constitutional right in Ireland and is of central importance to the effective administration of justice in the state. Under Irish law, legal professional privilege consists of two subcategories: legal advice privilege and litigation privilege.
The rules governing the application of both categories of privilege are complex and require careful consideration. In cross-border situations, understanding the interplay between Irish rules and those that apply in the European Union (EU), as well as in any relevant foreign jurisdiction, is key to successfully asserting and maintaining privilege.
Legal advice privilege
Legal advice privilege protects from disclosure any confidential communications (or material referring to such communications) passing between a lawyer and a client that are made in the course of the professional lawyer-client relationship for the purpose of giving or receiving legal advice. It does not extend to communications involving third parties (such as expert witnesses), even where a client and its lawyers are also involved.
This type of privilege does not require litigation to be in contemplation and in this regard is similar to attorney client privilege in the US. Where applicable, legal advice privilege continues in perpetuity and, unless waived by the client, will not cease to apply when the client-lawyer relationship ends.
Irish courts, unlike those in the UK, have drawn a distinction between legal advice (which is privileged) and legal assistance (which is not). The Irish Supreme Court in Smurfit Paribas Bank Limited v AAB Export Finance defined legal assistance as not going beyond “communications of fact leading to the drafting of legal documents and requests for the preparation of such”.
Other examples of legal assistance might include providing a transaction status update, or arranging for the filing of legal documents. Conversely, legal advice typically involves an explanation of legal rights and obligations.
Litigation privilege
Litigation privilege is broader than legal advice privilege and, where applicable, protects from disclosure confidential communications between a lawyer and a client or a third party that have been created for the dominant purpose of being used in connection with existing or contemplated litigation.
Irish courts will apply a strict test in interpreting whether litigation is existing or contemplated and this test is objective, involving consideration of the factual circumstances. There must be a real possibility of litigation; it is not sufficient that litigation might occur.
Crucially, and a distinguishing factor from legal advice privilege, communications with a non-lawyer expert engaged in a contentious dispute or investigation will be protected, even if a lawyer is not involved. For example, an expert witness report prepared for use in litigation would attract litigation privilege.
In contrast to legal advice privilege, litigation privilege generally ends with the resolution of the litigation (or threat of litigation) in respect of which it was asserted and may only be subsequently reasserted in respect of the same or closely related proceedings.
Who is the lawyer?
The lawyer involved in the relevant communication must be a qualified lawyer holding a practising certificate. Privilege will not apply in respect of persons who have ceased to act as lawyers or to anyone who is not a qualified lawyer.
Under Irish law, privilege applies in respect of in-house lawyers, provided they are acting in their capacity as a legal adviser and not as an officer of the company, for example, carrying out company secretarial functions.
There is a divergence between Irish and EU law in the treatment of in-house lawyers, with specific EU law considerations applying in relation to competition law. Following the Court of Justice of the EU (CJEU) decision in Akzo Nobel, internal communications between in-house lawyers and company employees are not privileged in the context of EU Commission competition law investigations.
Although that decision also held that legal professional privilege only applied to legal advice made for the purposes of a client’s right of defence in competition law investigations, further clarification came following the CJEU decision in Orde, which found that legal professional privilege is protected not only as part of the rights of defence, but also under the right to protect private communications, i.e., to legal advice more generally.
By expanding the scope of legal professional privilege at an EU level to legal advice that does not form part of the client’s right of defence, the Orde ruling has narrowed the divide between the Irish and EU standards.
Who is the client?
When examining who is the ‘client’ for privilege purposes, an Irish court will ask whether the individual making or receiving the communication is engaged or employed to obtain or receive legal advice on behalf of that organisation. Where the client is a corporate entity, this may not be straightforward, particularly where there is a complex group structure.
In the UK, the definition of the ‘client’ has been the subject of greater court consideration and is construed quite narrowly such that it appears that a client’s employees are considered third parties for the purposes of privilege. This means that an individual’s communications with the client’s lawyers are not generally protected unless the organisation specifically grants them authority to act as its agent for purposes of seeking legal advice.
The UK Court of Appeal has noted the difficulties this may present for large multinationals with complex structures where any number of people may be considered as authorised to seek and obtain advice. To date, Irish courts have not taken such a narrow approach.
Waiver of privilege
The issue of who is the client has implications for waiver of privilege by the client, which can occur either intentionally or inadvertently. Inadvertent waiver of privilege can arise where privileged material is shared outside the client team, thereby losing its confidential quality.
Although there may be circumstances where it would be to the client’s advantage to waive privilege, selective waiver is not possible – as the court made it clear in Quinn v IBRC, cherry picking parts of privileged materials to disclose is not permitted.
Where privileged documents are accidentally disclosed, privilege may not necessarily be lost. In Ireland, where a lawyer realises they have unintentionally received a privileged document, it is their duty to take all reasonable attempts to return it. They should also not make use of the inadvertently disclosed material.
Common interest privilege
Where parent and subsidiary relationships arise, common interest privilege might apply. This is where two or more parties have a common interest in the outcome of litigation or a piece of legal advice, and, where applicable, protects the sharing of privileged documents between them. This is not a separate form of privilege and whether or not a common interest exists is a matter of fact.
Creating and maintaining privilege
Simply labelling a document ‘privileged’ will not necessarily make that document privileged; the document needs to meet the relevant criteria. Equally, provided those criteria are met, a document does not need to expressly state that legal advice is sought or litigation is anticipated. It is, though, helpful for any subsequent claim of privilege for a privilege document to be labelled as such.
From a cross-border perspective, it cannot be assumed that because a document is privileged in one jurisdiction, it will be treated as privileged everywhere. Privilege rules in every relevant jurisdiction, as well as the disclosure obligations in a regulatory investigation or litigation context, need to be understood in advance of creating documents that are intended to be privileged.
Although the question of which law will determine the status of a purportedly privileged document has not yet been decided directly by Irish courts, case law from England and Wales (which has persuasive value in Ireland) has found that the law of the country in which the action is taken will apply.
Nature of proceedings – regulatory investigations
The Irish High Court has confirmed (in the case of ODCE v Buckley) that legal advice privilege will apply even where the matter in question is not judicial in nature, such that legal advice privilege can extend to communications sought in the context of a regulatory investigation, for example by the Central Bank of Ireland. The decision in ODCE v Buckley also accepted that litigation privilege applies in the context of regulatory investigations.
In the UK, however, it appears that a distinction is made between adversarial and inquisitorial proceedings in the context of asserting litigation privilege. The traditional UK position is that litigation privilege cannot be asserted over inquisitorial proceedings such as a regulatory investigation, although where initially inquisitorial proceedings are commenced with the assumption and understanding that they will become adversarial, litigation privilege can apply.
Irish courts have not made this distinction and have allowed litigation privilege to apply in both adversarial and inquisitorial contexts.
Irish legislation that provides certain regulators with information-seeking powers also contain privilege protections so a regulator cannot compel the production of legally privileged material. The treatment of privileged materials in the context of a ‘dawn raid’ was considered by the High Court in Commission for Communications Regulation (Comreg) v Eircom Limited.
Following the seizure by ComReg of documents from Eir, ComReg formulated a step plan to narrow the dataset and exclude irrelevant and legally privileged material. This included that ComReg would conduct electronic searches to exclude legally privileged material. In approving the plan, the court determined that it was appropriate for ComReg to conduct the searches rather than Eir because otherwise it would “undermine to a very significant degree the investigative powers of the regulator and one of the purposes of the legislation”.
Conclusion
Whether a successful assertion of privilege can be made in relation to litigation or an investigation, requires careful navigation and application of all relevant rules. Although this may not always be straightforward, from an Irish perspective, there are various practical steps that can be taken to assist in the preservation and maintenance of privilege in the state.
Julie Murphy O’Connor is a partner, Ellen Cummins is a senior associate and Tina Turner is a professional support lawyer at Matheson LLP. Ms Murphy O’Connor can be contacted on +353 1 232 2192 or by email: julie.murphy-oconnor@matheson.com. Ms Cummins can be contacted on +353 1 232 2703 or by email: ellen.cummins@matheson.com. Ms Turner can be contacted on +353 1 232 3773 or by email: tina.turner@matheson.com.
© Financier Worldwide
BY
Julie Murphy O’Connor, Ellen Cummins and Tina Turner
Matheson LLP
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