Report: companies left with little choice but to waive rights

Strong-arm tactics by US authorities are having a 'devastating' impact on attorney-client privilege in the US - and could lead to international companies inadvertently waiving privilege in the UK as well, lawyers warned this week.


A report by an American Bar Association task force claimed that the actions of US authorities in pressuring companies to waive privilege rights during investigations were undermining lawyers' abilities to advise their clients.


The task force claimed current policies by authorities such as the Securities & Exchange Commission and the Department of Justice leave clients with little practical choice but to waive their privilege rights. It reported that many agencies have the authority to impose substantial costs on corporations that choose to assert rather than waive privilege.


Task force chairman Bill Ide told the Gazette: 'If it is a truly voluntary waiver, that is one thing - but where there is pressure to waive privilege, that is inappropriate. It will have a devastating impact on compliance and the prevention of wrongdoing. The first defence against that is good counsel, and if lawyers are to provide that, we need confidentiality.'


He added: 'There are concerns about lawyers being used as agents of the government both in the US and abroad, with the money laundering requirements that have been imposed post-9/11.'


Colin Passmore, partner and privilege expert at City firm Simmons & Simmons, said: 'There are clear authorities from the courts in this country that no one can be criticised for not waiving their privilege.


'But this is a concern for companies that are active in the US. They may find that by succumbing to these pressure tactics in the US, they have waived all of their privilege rights, in the UK and elsewhere.'