Wallace litigation partner, Alexander Weinberg, has recently been quoted in a Law360 article titled, UK Client Privilege Ruling Has Legal Sector on Red Alert. The article discussed the implications of a recent High Court ruling where Eurasian Natural Resources Corporation Ltd, a well-known mining company, had claimed that papers drawn up by its lawyers and forensic accountants during an internal investigation should be protected under so-called litigation privilege. The company failed to sway the High Court which rejected the privilege claims.
The decision, marking a win for the Serious Fraud Office, together with a similar recent ruling that forced Royal Bank of Scotland PLC to disclose documents amid a shareholder suit, threatens the ability of companies to invoke legal privilege and to run internal investigations.
Commenting on the outcome, Alexander Weinberg said:
“If consulting with lawyers in the context of such investigations is not protected by privilege — even where litigation is a reasonable prospect — that changes entirely the complexion of what a client will say to its lawyers. It would also affect the papers generated in terms of advising or helping a client. Such material may have to be disclosed in any subsequent court proceedings and that is entirely undesirable. It means clients and lawyers cannot speak freely, in writing, to one another.”
“It is crucial that lawyers are involved right from the outset to assist and advise clients concerning any internal investigations or in conducting any other preparatory work in the context of external regulatory investigations. ENRC will look to appeal this decision but as matters stand this is hugely worrying, especially for big corporates as well as key individuals, who are more likely to be subject to these kinds of regulatory investigations.”
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