Welcome everybody to an extra, out-of-cycle edition of my China Tech Law Newsletter. Last week I talked here about data processing and export in cross-border investigations involving China. The companion article that my partner at
R&P China Lawyers
,
Qiao (Alice) Peng
I wrote was also published recently by our firm, on Attorney-Client Privilege in Internal Investigations involving China. That article was thorough but dense like the first one, so let me summarize the key points here.
- The attorney-client privilege is largely a common law concept invoked most often in U.S. courts. It prevents a party from having to disclose "communications" which were meant to be confidential between an attorney and client for the purpose of obtaining legal advice.
- The concept is most relevant in the context of discovery, where a party in litigation can demand the other party provide certain documents and information to help form their case. Discovery is quite broad in the U.S., while very limited in China. This is starting to change a bit with the increase of Chinese court "Document Production Orders."
- The idea behind the privilege is that we want to encourage open and honest discussions between a person and his or her lawyer so that the lawyer can provide the best, unfettered advice, without risk that the back and forth discussion might have to be disclosed to a third party.
- That third party can also be the government as part of an investigation such as for potential violations of the Foreign Corrupt Practices Act.
- China doesn't have the privilege but it does has a duty of confidentiality for lawyers to keep their clients' information confidential generally. But this duty is more of an ethical duty and open to potentially being superseded by requirements of the law (more so than the carve-outs in the U.S. such as concealing a fraud).
- In-house lawyers are seen more as business advisors and the duty applies less to them than to external lawyers.
- Whether U.S. law on privilege or foreign law applies depends on the "touch-base test" to see which country has the most predominant interest in the confidentiality of the communication.
- As to U.S. lawsuits and government investigations, confidential communications in China may still be privileged if the work was done at the "direction" of a U.S. qualified attorney. It is therefore important to get a U.S. attorney involved early if there is a chance the matter will be adjudicated in the U.S.
In summary, China does not have a U.S. style attorney-client privilege, but it does allow for a certain degree of confidentiality. The substance of those confidential conversations are less likely to be turned over in China litigation anyway, given the absence of extensive U.S. style discovery mechanisms in China. Have a U.S. lawyer engaged and directing the work if the U.S. is a likely forum, in order to try to keep the privilege there.
Okay, thanks again everyone for an extra China Tech Law Newsletter edition. Signing out and thanks for reading as always!
