A couple of recent court rulings have produced new issues for lawyers advising their clients about professional legal privilege with regard to internal investigations.  Whereas up until recently legal privilege has protected communications between clients and lawyers for litigations that are both in progress and contemplation, the court cases of Serious Fraud Office v. Eurasian National Resources Corporation Ltd., Bilta (UK) v. Royal Bank of Scotland, and R (on behalf of the Health and Safety Executive) v. Paul Jukes have seen judges take a narrower view of what communications should be protected.

The rulings in these cases have important consequences for companies mounting internal investigations, and for the documents created during those investigations. In the case of SFO v. ENRC it was ruled that documents created by lawyers and forensic accountants during an internal investigation were not privileged as they were made with no more than a general apprehension of future litigation. In this criminal case, the internal investigation had been mounted in response to an email received from an apparent whistleblower, alleging that the company’s Kazakh subsidiary had engaged in acts of bribery and financial wrongdoing.

In the Bilta v. RBS case, a judgment was made that if litigation is not the sole purpose for creating documents, and if that litigation is not adversarial, then they are not protected. Bilta was required to show evidence that they were anticipating litigation when they started their internal investigation in order for interview transcripts produced during this process to be protected. They needed to show documentation of the outset of litigation in the form of their lawyers’ retainer letter and internal emails in order to argue that their internal investigation was in response to a letter received from the HMRC making allegations of tax fraud.

In the criminal case of R. v. Jukes it was ruled that an employee’s statement made to their company’s solicitor was not privileged. In this case a statement made by Paul Jukes – the transport and operations manager at a waste and recycling company where an employee was fatally injured in 2010 – to his employer’s lawyer, in which he stated that he was responsible for health and safety on site, was deemed admissible to contradict a later statement made to the HSE in which he denied any such responsibility. The court ruled that documents created for a criminal investigation or to avoid prosecution were not protected. As a result, Jukes was sentenced to nine months imprisonment.

So, what do these rulings mean for your company? The SFO v. ENRC case is currently being appealed, and until the result of this appeal is known lawyers are somewhat in limbo with regard to how to advise their clients on what is covered by legal privilege. There are, however, several steps that you can take in order to protect yourself. It is vital that you proceed with caution when beginning internal investigations. It is more important than ever before that your investigation procedures are robust. We would advise that you engage lawyers as soon as possible, and that you make sure that the circumstances surrounding the beginnings of investigations, and the cause of such investigations, are documented as thoroughly as possible.

If you would like advice on how to prevent yourself from being put in a situation where you are having to mount an internal investigation, Amalgamate is here to offer support and guidance on how to improve your safety management system, as well as to review your incident reporting procedures.

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