Attorney Client Privilege Limited for International Firms

Everything is safe that you tell your lawyer, right? Well, you may be only partially correct. Depending on whether your case is a minor dispute within the US or a larger conflict that involves foreign firms, you may want to think twice as to what information is released. Statutes within the United States have strict protocol regarding attorney-client confidentiality and the privilege of non-disclosure of specific information that is coupled with it. However, confidential must be further defined in order to determine whether your information is staying in the hands of your attorney or is being released to another party.

Rule 502 of the Federal Rules of Evidence applies when there is a confidential communication made between and an attorney and their respective client. There must be an understanding that there is indeed an agreeable working relationship formed between both parties and in fact, that this communication should be kept private unless mutually agreed upon. This is also applicable to communications that are used as a “work-product” by the attorney. If, during the course of work, the attorney makes notes of any communications with their client, these are included within the realm of Rule 502. This federal rule is tweaked and further refined on a state-by-state basis as permitted by statute.

From this notion stems the Federal Rules of Civil Procedure which address the concern of what information is discoverable by other parties within a dispute. Rule 26(b)(5)(B) states the procedure of what occurs when this information is asked to be released to a party that may not be privy to it. These documents are meant to be kept confidential unless a waiver is granted by the client themselves.

These established principles within the US jurisdiction system are concrete molds that every practicing attorney follows and is obliged to do so regarding the ethical rules of procedure that are established by their respective states. However, these rules become problematic when domestic firms work with international firms. The Wall Street Journal reports that in recent cases, U.S. judges have determined that in-house lawyers in foreign firms, specifically in Russia, the Netherlands, China and India, are not privy to using the attorney-client privilege. Judge Shira Scheindlin stated that this privilege is inapplicable in jurisdictions that do not compel their in-house attorneys to be admitted in order to practice or to make court appearances.

Some make the following differentiation. In the U.S, the discovery process in obtaining extra information and evidence to bring to a court is broader than other nations’ requirements. The European Court of Justice of the EU, equivalent to the Supreme Court in the U.S. in its stature, ruled that in-house counsel must meet the strict and narrow demands of the company that they work for and thus, no privilege should apply. However, some disagree that with the rise of working relations between international and U.S firms, it is becoming more of a customary practice in having those communications protected in order to ensure the confidentiality of all parties. Will customary practice become the understood norm between domestic and international attorneys regarding the privilege or will there be a continuing grey gap of what information is released?

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Sources: Federal Rules of Evidence — Rule 502; Federal Rules of Civil Procedure — Rule 26(b)(5)(B); In-House Counsel in Foreign Companies Lose Privilege; Akzo Nobel Chemicals Ltd. v. European Commission; Attorney-Client Privilege Eludes Some Foreign Firms; Top Secret Stamps (Image); Client/Attorney Relationship Cartoon (Image); Confidential (Image)