Privilege and confidentiality: resetting the conversation
Freshfields Bruckhaus Deringer, Singapore
To bring breadth to the discussion, panellists came from common and civil law jurisdictions and had different roles within the legal profession. The starting acknowledgement from all panellists was that privilege and confidentiality is a fundamental principle to the justice system, rule of law, and a functioning democracy. Each speaker then gave a relevant presentation/speech concerning their current or past work on privilege, the situation as to privilege in their jurisdiction, and the main points of tensions. The key themes from this session were the extent to which lawyers are unintentionally misusing, wilfully turning a blind eye to, or knowingly abusing claims of privilege; and what the legal profession can do to prevent misuse and abuse of privilege.
This webinar was opened by Stephen Revell of Freshfields Bruckhaus Deringer, who summarised the reasons for the IBA Working Group on Lawyer-Client Confidentiality’s formation and outlined the aims of the session. The Working Group’s position is if there is abuse of legal professional privilege or professional secrecy, the IBA wants to be part of the solution, while also preserving and defending the rights of clients and our own rights in this regard because of their importance to the rule of law.
Musa Mwenye SC, of Mwenye & Mwitwa – Advocates in Lusaka, began the panellist presentations by speaking to the misuse of privilege in the African context. Drawing from his personal experience as Attorney General of Zambia, he described how in the African context, the abuse of privilege is generally by a small minority of legal professionals, sometimes to benefit corrupt individuals in governments; whereas in Western countries, the issue of concern tends to focus more on law enforcement attempting to pierce privilege and confidentiality to assist in the prosecution of accused individuals. He stressed the importance of balancing the protection of privilege and confidentiality against the need to prevent abuse and the real-life adverse effects of using privilege to ‘shield’ criminals and corruption, which has particularly been felt in the African context.
Solvej Krause, a financial sector specialist with the Stolen Asset Recovery Initiative (StAR), followed with a presentation about the work StAR at the World Bank concerning privilege and corruption. Krause referred to two court decisions (Upjohn Co v US and Michaud v France) in outlining the fundamental importance of legal privilege to a legal system and democratic society. Her presentation primarily focused on the issues created by lawyers playing the role of professional gatekeepers in facilitating and creating structures that allow for global financial systems to be abused. Krause presented four case examples where law firms had shown a willingness to turn a blind eye to, or provide advice on, suspicious transactions. A number of reports were cited concerning the extent of lawyers abusing privilege, and she flagged that the data sources only show the cases on prosecution or public records, and therefore doesn’t reflect the whole picture. She stressed that in finding a solution to the abuse of privilege, a balance must be struck between the need to protect privilege as a fundamental element of the legal system and preventing abuse by gatekeepers and criminals. A number of possible approaches were suggested, but Krause also identified that there were no neat solutions and that vagueness in scope and application of privilege benefits criminals.
Next, Frederica Wilson, of the Federation of Law Societies of Canada, spoke firstly to the sacrosanct nature of privilege in the Canadian context, including references to decisions of the Supreme Court of Canada, and the competing frustrations of law enforcement when encountering claims of privilege during investigations. Wilson’s view was that the definition of privilege is not the problem and tinkering with the definition to address abuse of privilege and concerns of law enforcement would not be appropriate or effective. Secondly, she addressed the importance of education of lawyers and law students on privilege and embedding that discussion within the context of lawyers’ ethical obligations, and how improvements can be made in this area.
Emma Oettinger of Ashurst, in London, and Co-Vice-Chair of the IBA Regulation Of Lawyers’ Compliance Committee, echoed Wilson’s comments about education within the legal sector, and how decades of litigation as to the scope of privilege in the United Kingdom (specifically) has resulted in some claiming that privilege is too complex for many lawyers to understand, and this is what leads to its misuse. Oettinger expressed her view that there is a need for lawyers, government policy-makers and law enforcement to be educated continuously about the basics of privilege to reduce the mistrust and misunderstanding around it.
Jalal El Ahdab of Bird & Bird in Paris, and Senior Vice-Chair of the IBA Arab Regional Forum and Co-Chair of the Working Group, then spoke from the civil law perspective on privilege, which is called professional secrecy. Reacting to Krause’s presentation, El Ahdab spoke to the perception held by some that organisations working to fight corruption were trending towards questioning the fundamental principle of privilege by seeking complete transparency. He reminded us that professional secrecy is based on the public interest. Flagged that it cannot be waived in France, El Ahdab discussed how lawyers rely on professional secrecy to receive confidential information in order for them to effectively perform their duties. He identified how the notion of ‘discovery’ (as in common law jurisdictions) does not exist in France, and that is a reason why professional secrecy is more the focus than any concepts similar to common law privilege.
Jonathan Goldsmith, consultant in European and International Legal Services and Vice-Chair of the IBA BIC International Trade in Legal Services Committee, concluded the presentations by discussing overreach by state authorities and prosecutors. He specifically referred to examples from his experience working in Eastern European and non-European Union countries in Europe, including a variety of investigation practices not grounded in law that lawyers have little control over. Goldsmith stated that where authorities are not complying with normal standards, lawyers and bar associations must work to protect the essential principle of lawyer-client confidentiality.
When questioned about whether the overreach by state authorities and prosecutors was likely to be out of ignorance or premeditated, Goldsmith answered by saying it could be neither or both, but is often indifference because the lack of consequences for breaching confidentiality laws.
Oettinger addressed a question from the audience about hard data and the actual number of lawyers misusing and abusing privilege. She commented that she thought the number of lawyers complicit in abuse is quite small, however, in the context of inadvertent misuse, it is difficult to say: if in doubt or erring on the side of caution, lawyers (particularly transactional lawyers less used to day-to-day litigious claims) might claim privilege over information that isn’t privileged.
Wilson added to the previous question by commenting on how lawyers sometimes claim privilege because of the consequences of getting it wrong, including that lawyers sometimes find it difficult to draw a line between what is and isn’t privileged information. She also raised the tension between the duties of a lawyer and ordinary morality and the complexity of grappling with those issues.
Speaking to questions regarding the civil law context, El Ahdab clarified that clients lose the right to claim privilege in civil law jurisdictions when there is criminal activity involved. In France, prosecutions against corrupt lawyers occur in front of the Bar and are strictly confidential, so there is no hard data on the number of lawyers misusing or abusing privilege – only if the decision was appealed would the case file become public.
Krause commented on the hard data point that the statistics that do exist do not tell the whole story, as only the people who get caught are in the statistics. Krause spoke to a key issue being unwitting facilitation of crime and a mismatch of incentives regarding enforcement, where a lawyer might be at greater risk for revealing information about their client than for facilitating a crime, resulting in erring on the side of caution.
Goldsmith stressed the importance of education of the authorities and regulators, and Wilson echoed the importance of training the regulators who investigate and identify abuse of privilege.
Speaking to a question about how to increase prosecution of violators and whether it would be a deterrent, Krause identified that it differs from country to country, but increased investigation and prosecution of gatekeepers and the threat of disbarment would have a deterrent effect on lawyers exercising wilful blindness. Oettinger also commented that publicising strike-off lists, excessive fines and disciplinary sanctions can also be applied, and presenting the consequences of turning a blind eye to lawyers in a digestible format.
Wilson and Oettinger also answered a quick question about whether regulators should take action against law firms running questionable adverts (like the ones in Krause’s presentation) which promote the dubious motives that privilege can be used to protect. Wilson said Canadian lawyers acting that way could well be prosecuted, and Oettinger said an advert of that nature would be flagged and sent to the regulator. In short, law enforcement should be reporting law firms to their regulators if they see dubious behaviour.
Mwenye closed the discussion by speaking to what is currently happening, and what else needs to happen in Zambia to address the abuse of privilege. He flagged that most of the tension in the discussion centres on legal advice privilege (rather than litigation privilege) and that lawyers are a problem in Zambia and further conversations and a bit more transparency is needed, including discussions on suspicious transaction reporting.