Creating and Preserving Confidentiality and Privilege in Internal Investigations

Before any internal investigation begins, counsel must consider how information uncovered during the investigation is to be preserved in confidence. Of course, some of the information collected during the investigation may already be eligible for protection under some form of confidentiality or nondisclosure agreement. The confidentiality of internal investigation materials may be eligible for protection under the attorney-client, work-product or self-evaluation privileges, provided that such privileges are not waived during or after the investigation by inadvertent or intentional disclosure of the information.

In order to maximize the chances that the results of any investigation, or legal review for that matter, will be eligible for protection from unwanted disclosure, counsel should take the following steps:

  • Generate a record that supports an expectation of privacy and intent to prevent and cure violations of law.
  • Obtain formal authorization of the investigation from management that makes it clear that the purpose of the investigation is to render sound legal advice to the company. Counsel should make a written request for authorization that sets out the potential forms of litigation which may arise from any violations in the legal area under review. A formal authorization and retention letter also should be used for work to be done by outside counsel, and the letter should describe the procedures for the investigation and set out the details of the privilege.
  • Coordinate and control the investigation, including, without limitation, ensuring that all investigation participants are instructed to report directly to counsel.
  • Persuade management to formally direct employees to cooperate in the investigation and make sure employees are aware that counsel represents the corporation.
  • Employees should be admonished to avoid hyperbole, legal conclusions, speculation or offensive language in their internal communications.
  • Educate managers in the laws and practices relating to protection of internal communications, including the operation of the legal system and the role of counsel. Memorialize interviews in a way that integrates factual information with counsel's thought processes and opinions.
  • Counsel should avoid verbatim transcripts and tape recordings in favor of memoranda that include evaluations of the statements made by the interviewee and relate the interviewee's statements to other evidence that the interview either supports or refutes. Mark documents "privileged and confidential attorney work-product"; maintain separate files and limit access to the files only to persons in the legal department; retain custody and control of materials, and dispose of unnecessary materials. Distributions of copies of materials for which protection is sought, particularly e-mail communications, should be strictly limited.
  • Hire and control investigation experts and consultants and instruct experts and consultants to report directly to counsel and to submit reports that set forth the elements necessary for a privilege to be recognized.
  • Draft reports and summaries in a fashion that reflects the elements of the privileges. For example, counsel should include affirmative statements on documents (such as witness interview summaries) to the effect that information included therein was solicited and obtained for purposes of rendering legal advice.

The content in this post has been adapted from material that will appear in Business Transactions Solutions (Fall 2008) and is presented with permission of Thomson/West.  Copyright 2008 Thomson/West.  For more information or to order call 1-800-762-5272.

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