A Primer on Attorney-Client Privilege: Part 2 By Charles A. Weiss This article continues our series on attorney-client privilege. In the prior edition of our newsletter, we presented the basic rule of attorney-client privilege as generally applied in the United States, and addressed two problems seen commonly in the case of corporate clients. (See Holland & Knight's China Practice Newsletter: January-February 2021.) The first problem concerned the role of intermediaries or advisors who are involved in a substantive but informal manner in the company's communications with its lawyers. The second problem concerned the distinction between legal advice and business advice, and the issues created by lawyers who wear two hats (legal and business). This article examines the issue of cross-border privilege, such as how a U.S. court applies attorney-client privilege when the communications at issue are between a non-U.S. lawyer and his or her client. Lawyers involved in drafting, interpreting or litigating commercial contracts are thoroughly familiar with choiceof-law provisions, which specify what jurisdiction's law will govern. In contract cases when the governing law is specified, U.S. courts will generally adhere to the parties' choice, especially in cases involving commercial agreements, when the parties were represented by counsel and had the opportunity to negotiate and bargain for the choice of law. By contrast, the choice of law to be applied to claims of attorney-client privilege in cross-border cases is rarely so simple. First, many disputes do not involve a contract between the litigants, such as, for example, patent or trade-secret cases, antitrust disputes and other types of business torts. Second, even when a dispute does involve a contract, the contract's choice-of-law provision will not necessarily be applicable to claims of attorneyclient privilege, which are collateral to the terms of the contract itself. Accordingly, a court hearing such cases will independently determine what law to apply to claims of attorney-client privilege. Indeed, this is true even in cases that involve solely U.S. litigants, as when a Delaware corporation with its headquarters in New Jersey that obtained advice from a New York lawyer is litigating in a Florida court against a Nevada corporation with its headquarters in Arizona that obtained advice from a California lawyer. Happily for the sanity of the litigators, and the legal budgets of the litigants, cases like this will more often than not involve what is referred to as a "false conflict," meaning that the various states' rules of privilege are either not materially different, or that the differences that do exist would not affect the outcome of the privilege issue. In the case of a false conflict, the court does not have to decide what law applies because the result would be the same under all potential choices. A false conflict may also exist in a cross-border dispute, but oftentimes one party will perceive an advantage in raising a choice-of-law issue. For example, a U.S. company that has been advised only by U.S. lawyers, which knows that its own privilege claims will be evaluated under the very protective U.S. standard, may assert that its non-U.S. adversary's privilege claims should be governed by less-protective laws of the adversary's own jurisdiction. On the other hand, a U.S. litigant may argue for the application of U.S. privilege rules if its non-U.S. adversary's legal communications would be protected under the laws of its home jurisdiction, but would not be protected under the U.S. privilege standards.
CHOICE OF LAW TESTS: "TOUCH BASE" APPROACH VERSUS "FUNCTIONAL" APPROACH Complicating matters, U.S. courts use to different tests, which will often result in different outcomes, to adjudicate cross-border privilege issues. Most often, court use the "touch base" approach, which asks which jurisdiction has the predominant interest in the confidentiality of the communications at issue. This will usually be the jurisdiction in which the lawyer and client entered into their relationship, or which was at the center of Copyright © 2021 Holland & Knight LLP All Rights Reserved
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