Part II of the article discusses the Indian legal position on attorney-client privilege as well as best practices during internal investigations and for work-from home setups.
Legal Position in India
Under the Indian Evidence Act, 1872 (“the Act”), any professional and confidential communication with the legal advisor is protected. Sections 126 to 129 of the Act codify the common law principles of privileged professional communication between an attorney and the client. It can be essentially summarised to say that any communication made for the purpose of seeking legal advice to an attorney would be protected. In India, any person who seeks an advice from a practicing advocate, registered under the Advocates Act, 1961, would have the benefit of the legal privilege and his/her communication would be protected under Section 126 of the Act. The Bombay High Court, in Cecilia Fernandes v. State[1], held that: “when considered in the light of the right of personal liberty given under Article 22(1) of the Constitution in order to be meaningful can be exercised only in confidence. The interpretation of the term ‘legal privilege’ in India is severely diluted, especially in terms of enforcement investigation wherein investigative agencies have accessed documents.
An attorney, without the express consent of the client, cannot disclose any communication made by the client, on behalf of such client; during the course of or for the purpose of his/her engagement as such attorney. Furthermore, an attorney cannot state the contents or conditions of any document he/she may have become acquainted with in the course of his/her engagement as an attorney or disclose the advice provided to the client.
However, the privilege is subject to limitations, and the privilege shall no longer apply where disclosures are made with the express consent of the client, or where the communication is made in furtherance of any illegal purpose or where, post his/her engagement, the attorney discovers or observes a fact that a crime was committed or a fraud was perpetuated, it is immaterial whether or not the attention of the attorney was or was not directed to such fact by or on behalf of the client. Section 127 of the Act expands the scope of privilege provided under Section 126 by imposing a similar duty on interpreters, clerks and servants of the legal adviser.
Section 128 of the Act provides that the attorney cannot disclose any information which is deemed privileged under Section 126 unless the client calls upon the legal adviser as a witness and questions him on the same.
Furthermore, Section 129 of the Act lays down that no one shall be compelled to disclose to the court any confidential communication which has taken place between him and his legal professional advisor, unless he offers himself as a witness. In this case, the attorney may be compelled to disclose any communication as deemed necessary by the court to explain any evidence so provided by the attorney, but no other. The Calcutta High Court, in Sudha Sindhu v. Emperor (AIR 1935) Cal 101, held that all communications between an accused person or indeed any litigant and his legal advisors are privileged and confidential.
Courts have further clarified on the issue of legal privilege by holding, inter alia, that to claim privilege under Section 126 of the Act, a communication by a party to his/her pleader must be of a confidential nature.[2] However, privilege does not apply to communications made before the creation of a relationship of a pleader and client.[3]
In addition to the provisions under the Indian Evidence Act, 1872, professional communication between a legal advisor and a client is accorded protected status under the Advocates Act, 1961 and the Bar Council of India Rules (the “BCI Rules”). The BCI Rules, under Rule 17, Chapter II, Part VI, stipulate that ‘an advocate shall not, directly or indirectly, commit a breach of the obligations imposed by Section 126 of the Evidence Act.’ In addition to this, Rules 7 and 15 of the BCI Rules on An Advocate’s Duty Towards the Client state that communication between the client and the attorney cannot be disclosed by the attorney, in any manner whatsoever, and that an advocate should not take advantage or abuse a client’s confidence.[4] A violation of these Rules would subject the attorney to disciplinary proceedings.
With respect to an in-house counsel, the legal position was clarified by the Supreme Court in Satish Kumar Sharma v. Bar Council of Himachal Pradesh[5], wherein, the Supreme Court held that “if a full-time employee is not pleading on behalf of his employer, or if terms of employment are such that he does not have to act or plead but is required to do other kinds of functions, then he ceases to be an advocate. The latter is then a mere employee of the government or the body corporate“. The judgment also referred to Rule 49, Section VII, Chapter II, Part VI of the BCI Rules, stating that “an advocate shall not be a full-time salaried employee of any person, government, firm, corporation or concern, so long as he continues to practice and shall, on taking up any such employment intimate the fact to the Bar Council on whose roll his name appears, and shall thereupon cease to practice as an advocate so long as he continues in such employment. An advocate cannot be a full-time salaried employee. The only exception is if the person is a Law Officer of the Central Government of a State or of any public corporation entitled to be enrolled in the Bar.”
In Municipal Corporation of Greater Bombay v. Vijay Metal Works[6], the court held that “a salaried employee who advises his employer on all legal questions and also other legal matters would get the same protection as others, viz., barrister, attorney, pleader or vakil, under Sections 126 and 129, and, therefore, any communication made in confidence to him by his employer seeking his legal advice or by him to his employer giving legal advice should get the protections of Sections 126 and 129.” Thus, in India, in order to qualify as privileged, the communications between clients and in-house attorneys would have to be tested on the touchstone of whether the in-house counsel is a full-time salaried employee as contemplated under Rule 49, Section VII, Chapter II, Part VI of BCI Rules. Further, the issue of whether the advice sought is in legal or executive capacity would also be a key distinguishing factor.
Privilege during Internal Investigations
Internal investigations pose a great challenge in terms of preserving legal privilege due to their sheer size and involvement of a wide nature of non-legal parties. The objective of an internal investigation is to understand the scope of the issue, remediate the problem, and to formulate a suitable response to regulators, government authorities or investigative agencies in one’s own or a foreign jurisdiction, as the case may be. In terms of investigation, maintaining privilege is crucial and it is important to structure and conduct the internal investigation in a manner that maximises the legal privilege available in a particular jurisdiction. It is imperative to note that legal privilege in many jurisdictions across the globe may not recognise communications with an in-house counsel, as protected by attorney-client privilege.
It is advisable for corporations or clients in the process of commencing an internal investigation to engage an external attorney or law firm at the outset and ensure that the investigation is carried out at the direction of the attorney. It is recommended to create and preserve written records demonstrating the purpose of the investigation and the legal advice sought in connection with anticipated litigation, if any. The records must reflect that key decision-makers at the company are within the client group so that there is no ambiguity in relation to applicability of privilege to the communication between the client and the attorney.
While creating written reports of the investigation or witness interviews, the distinction between ordinary work product and opinion work product must be kept in mind. It would be wise to consider whether the written reports will be protected under the privilege laws in each jurisdiction where the company can face potential litigation or enforcement actions. Furthermore, it is prudent to ensure that all non-legal advisers are retained or supervised by counsel overseeing the investigation.
The company as well as the attorney must take steps to avoid inadvertent waiver by ensuring the investigation and any related documents or reports are treated as confidential and not disclosed outside the investigation team.
Legal Privilege and Covid-19
Covid-19 has unleased a previously unforeseen challenge globally. There is absolutely no relative precedent in modern history when it comes to the changes and challenges brought to the fore by the pandemic. The society, government, healthcare system is all grappling with it, no profession remains untouched by the effects of the pandemic. This includes the legal profession – the pandemic had brought major business deals to a near standstill. Wheels of litigation, that ever move so slowly, were further slowed down by the shutdown of physical courts. Even till date, most of the courts have been only able to hold virtual hearings, taking up matters which are extremely urgent.
The pandemic has changed the way attorneys work, in all respects. As a significant amount of work has shifted online, the amount of risks and challenges has risen significantly. The transition to working from home, utilisation of videoconferencing programs and online collaboration tools for drafting and document sharing has raised concerns regarding security, confidentiality and privilege of attorney work products and attorney-client communication.
The shift in physical location of ‘office’ to say the kitchen table or living room poses another set of challenges to maintaining legal privilege and its protection in view of cybersecurity risks. It is important to remember that this shift requires a better understanding of how the principles of legal privilege will apply or employ best practices to prevent any leaks or unintended disclosures. The attorney-client privilege exists to protect only those communications that are confidential and made for the purpose of legal advice. The nature of the communication and confidentiality are important in determining whether or not the communication is privileged. It is important that lawyers and clients alike, take optimum measures to ensure maximum confidentiality.
The issue of privilege in presence of a third-party, especially in view of work-from home setup where lawyers are taking calls, virtual court hearings and client meetings, which run that risk of such conversations being overheard by family members or anyone in the vicinity; is yet to be addressed by courts. Even though it may not be possible to obtain absolute privacy, it is recommended that best practices in this regard be followed to ensure maintenance of legal privilege by ensuring that such conversations are held in private, away from common or shared areas, preferably through the use of headphones. The lawyer as well as the client need to be aware of the presence of any third person in their vicinity during such communication. While working with privileged documents, it is highly recommended that such documentation, if digital, is password protected and if physical, be stored securely.
Preserving and Protecting Privilege: Best Practices
Privilege applies only to communications where an attorney’s role was primarily for the purpose of rendering legal advice or assistance. While determining applicability of privilege, the following factors are deemed relevant:
- the context of the communication and the content of the document;
- whether the legal purpose permeates the document and can be separated from the rest of the document; and
- whether legal advice is specifically requested and the extent of the recipient list.
- Best practices in the age of zoom
Furthermore, to determine legal professional privilege between in-house counsel and corporate employees, courts have adopted two methods; one, the control group test, and two, the subject matter test. Under the first approach, communication from individuals outside the control group (i.e. the officers authorised to seek legal advice or control the legal affairs of a company) is not protected. Under the subject matter test, privilege is limited to communication from corporate employees for the specific purpose of securing legal advice for the corporation. Communication with an in-house counsel in relation to business as opposed to legal advice may not be protected by privilege.
In a recent decision, the UK Court of Appeal confirmed that legal advice privilege is also subject to a ‘dominant purpose’ test. In doing so, the Court has confirmed that legal advice and litigation privilege are two limbs of the same privilege, and similar considerations apply.[7] Simply put, for legal advice privilege to apply, the dominant purpose of a communication must be to obtain, or give, legal advice.
Many communications are presumed privileged, such as those in which “attorneys are examining and commenting upon a legal instrument, like a patent application, contract for a study, or the retention of experts.” In view of this, it is recommended that:
- While seeking legal advice, it must be clarified at the outset that the communication is for the dominant purpose of “seeking legal advice” or “for the purpose of providing legal advice”, as such statements assist in substantiating claims of legal professional privilege.
- Irrespective of the platform or mode, while providing legal advice to a client, attorneys must document the communication as “legal privileged” and provide legal support for any advice provided.
- It is advisable to clarify that any non-legal business issues or documents are provided or discussed separately and purpose of the said communication is to seek or provide legal advice.
- Where the client is a large organisation or company with legal and non-legal staff, the presence of non-legal staff or those outside the control group on attorney communications may undermine the privilege. Therefore, it is advisable to limit access of such communication only to those legal and non-legal team members with a direct connection to the legal matter at issue.
- In addition to this, labeling the communication with “do not forward” and instructing the team involved to limit circulation of a communication is recommended.
It is highly recommended that companies while conducting internal investigations should strive to protect the privilege at the outset so as to retain the flexibility to decide later whether and to what extent a privilege waiver is advisable. An internal investigation structured to maximise legal privilege will allow the company greater control over how and when to disclose the relevant information.
[1] Cr. Misc. Application No. 9 of 2005, see also; Moti Bai v. State 1954, CriLJ 1591.
[2] Memon Hajee Haroon Mohomed v. Abdul Karim, [1878] 3 Bom. 91.
[3] Kalikumar Pal v. Rajkumar Pal, 1931 (58) Cal 1379, Para 5.
[4] The Bar Council of India, Rules on Professional Standards, Rule 7 and Rule 15, available at http://www.barcouncilofindia.org/about/professional-standards/rules-on-professional-standards/.
[5] AIR 2001 SC 509.
[6] AIR 1982 Bom 6.
[7] The Civil Aviation Authority v Jet2.Com Ltd, R. (on the Application of Jet2.com Limited), [2020] EWCA Civ 35.