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Thursday
Mar312016

SFO: How should companies handle attorney-client privilege during investigations?

Alun Milford, SFO General Counsel (image courtesy fo the SFO)In a speech this week to compliance professionals at the European Compliance and Ethics Institute in Prague, the general counsel of the UK Serious Fraud Office talked about attorney-client privilege in connection with SFO corruption investigations.

Alun Milford tried to explain when it's safe for companies to assert the privilege and when they should waive it.

If a claim of privilege is well made, Milford said, the SFO won't hold it against a company. And when a company with a good claim of privilege waives it, that's a mark of cooperation. But when claims of privilege are bogus, the SFO will assume the company is being uncooperative, he said.

All that's good to know. It shows that the SFO is trying to find the balance between honoring the privilege and crediting a corporate target with cooperation when it waives the privilege.

But the real dilemma comes when a company thinks its claim of privilege is well made and the SFO thinks otherwise. That's when companies and executives can feel cornered by prosecutors and pressured to waive the privilege to the detriment of individual officers and employees.

Abusive pressure to waive the privilege is a big topic and won't be resolved by one speech. The debate about it in the United States has been going on for years.

But Milford's remarks this week about privilege (and other topics) were still helpful, if only to help frame the discussion.

Here's part of what he said:

*     *     *

And that brings me to the question of privilege.

Let me be clear. We have no interest in communications between client and lawyer on questions of liability or rights. We are focussed on the underlying facts, including the accounts of witnesses spoken to in corporate investigations. We do not regard ourselves as constrained from asking for them even if they are privileged and, as with our colleagues in U.S. DOJ who do operate under that constraint, our experience is that at least some corporates are not themselves constrained from letting us know what their investigators were told. As the saying goes, there are more solutions than problems.

Of course, there will be cases in which we are told that the corporate concerned does want to claim privilege over the witness accounts. Whether privilege in fact applies depends entirely on the facts of the case, something we will review very carefully. And then what?

  • We will view as uncooperative false or exaggerated claims of privilege, and we are prepared to litigate over them: to do otherwise would be to fail in our duty to investigate crime.
  • If a company’s assertion of privilege is well-made out, then we will not hold that against the company: to do otherwise would be inconsistent with the substantive protection privilege offers. We will simply judge the question of co-operation in our normal way against our published criteria.
  • By the same token if, notwithstanding the existence of a well-made-out claim to privilege, a company gives up the witness accounts we seek, then we will view that as a significant mark of co-operation: here again, to do otherwise would be inconsistent with the substantive protection privilege offers.
  • For the same reason, we will view as a significant mark of co-operation a company’s decision to structure its investigation in such a way as not to attract privilege claims over interviews of witnesses.

*     *     *

Alun Milford also issued a general warning about using overseas agents.

Will dealing with agents someday lead to a presumption of guilt or even be a per se violation of anti-bribery laws somewhere?

Here's what the general counsel of the SFO just said:

Intermediaries and agents are a classic red flag, particularly where they are purporting to offer assistance in winning business in a country other than the one in which they are based. Only last year the OECD reported following a study of 427 foreign bribery cases from across the world that in the vast majority of such cases the bribery was carried out via an agent or intermediary. Agents or intermediaries are of real interest to us, therefore. Our natural curiosity is piqued further if those agents or intermediaries take the form of companies based in a jurisdiction that permits beneficial ownership to be concealed.

*     *     *

Alun Milford's full remarks at the European Compliance and Ethics Institute in Prague on March 29, 2016 are here.

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Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.