Regulatory Investigations And Litigation Privilege: Proceed With Caution

Author:Mr Michael Twomey and Elizabeth Upton
Profession:Arthur Cox
 
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A question we are asked regularly is whether litigation privilege applies to documents created for the purpose of a regulatory investigation or, in other words, whether the regulator can get access to these documents. Unfortunately, there is no definitive answer to this question. Much depends on the type of investigation, and the best approach is to proceed with caution and to work on the assumption that the documents you create may not be protected from disclosure.

Traditionally litigation privilege only applied to adversarial court proceedings. However, recent years have seen a dramatic shift in the regulatory landscape: regulators have more far-reaching powers than ever before, their investigations are becoming increasingly adversarial, and the consequences for the person/body under investigation can be significant. As a result, the Irish courts have been more willing to allow litigation privilege to apply in the context of regulatory investigations. However, the position is not certain, and there is no rule that litigation privilege applies in all such cases.

WHAT IS LITIGATION PRIVILEGE?

Communications which are privileged - whether because of legal advice privilege or litigation privilege - do not have to be disclosed to the other side or to the court in legal proceedings.

Legal advice privilege applies to communications between a lawyer and his/her client that give or seek legal advice. Legal advice privilege applies in the same way in regulatory investigations as it does in legal proceedings, i.e. communications protected by legal advice privilege do not have to be disclosed to the regulator.

Litigation privilege applies to:

confidential communications between a lawyer and a client, or between either of them and a third party; where the communication was for the dominant purpose of litigation; and at the time the communication was made, the litigation was in being or reasonably contemplated. The rationale behind litigation privilege is that parties to litigation should be free to prepare their case without being concerned that they will have to disclose their preparatory materials to their opponent.

The question which arises here is whether a regulatory investigation constitutes "litigation" for the purposes of litigation privilege.

IS A REGULATORY INVESTIGATION "LITIGATION" FOR THE PURPOSES OF LITIGATION PRIVILEGE?

The view of the Irish courts as to what constitutes "litigation" appears to have been broadened in recent years to...

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