In-House Counsels: How Privileged Are You?
Article By: Leon Vincent Chann, ex-intern and current 3rd year NUS Law Student.
The recent Singapore Court of Appeal case of ARX v Comptroller of Income Tax  SGCA 56 sheds light on legal professional privilege (“LPP”), more specifically legal advice privilege, accorded to in-house counsels. The SGCA extensively discussed this issue and concluded that in-house counsels are indeed accorded LPP – via the common law before the 2012 amendments of the Evidence Act (Cap 97) and via both statutory and common law after the 2012 amendments. This article will firstly look at the requirements for the privilege to be attached to communications between in-house counsels and their clients, the requirements for the communications to be privileged and the exceptions to the privilege.
The starting position is not the title that in-house counsels carry but the very fact that they possess professional legal expertise per the Legal Profession Act (Cap 161). For the communications between the in-house counsel and his client to be privileged, the in-house counsel must further be consulted in his capacity as a legal adviser, and the communication must be confidential. What this means is that administrative matters are not privileged unless they are legal in nature. It thus follows that publicly available information cannot be privileged.
Prior to the 2012 amendments to the Evidence Act for LPP, in-house counsels were already protected under the common law. This is because of the crucial need to allow for “full, free and frank disclosure” between clients and their in-house counsels. It would be entirely artificial to say that this privilege is not accorded to in-house counsels when they are exercising the same function as advocates and solicitors in law firms. The SGCA in ARX held that this common law rule was not inconsistent with the Evidence Act.
That said, what the 2012 amendments did was to codify in-house counsels’ LPP within the Evidence Act when Minister for Law K Shanmugam and MP Hri Kumar Nair spoke in Parliament, to cement the point that LPP in the Evidence Act would apply “equally” to in-house counsels. The exceptions embodied within the Evidence Act would also equally apply to in-house counsels – where communications are in furtherance of an illegal purpose, where the in-house counsel has observed facts showing that any crime or fraud has been committed since the commencement of his employment, and where the client waives the privilege.
Illegality as an exception
It is self-explanatory that where communications evince illegality, the communications would no longer be privileged because it would be unconscionable and an abuse to the system to allow the communications to remain privileged. When one wants to rely on LPP, he cannot behave improperly. To allow the privilege in such situations would be tantamount to encouraging the wrongdoing. Therefore, in-house counsels should cease to act for the client if there is evidence of such wrongdoing according to rule 10 of the Legal Profession (Professional Conduct) Rules 2015.
Waivers as an exception
Express waivers are without a doubt the clearest way for privilege to be lifted on communications. Most useful to note will be the concept of implied waivers which has long been murky. The SGCA in ARX laid down the test as whether it is consistent and fair, in light of the whole case, for the full disclosure of the document after considering what has already been revealed. This is a fact-sensitive and objective exercise of discretion by the courts. A waiver would not be easily implied because the LPP is meant to benefit clients and to protect the confidentiality of communications. In addition, the courts have the discretion to look behind the communications to ascertain if the privilege was rightly asserted by the party. Lastly, the client may not pick and choose what to disclose or not disclose to their advantage.
LPP has been revered and would continue to be upheld with utmost importance in future. It would seem that the courts would be open in time to come to recognise newer situations where LPP may be of concern where it facilitates business. In the meantime, in-house counsels can have a peace of mind in knowing that they are no different from their counterparts in law firms in terms of privilege when providing legal advice to their clients.
by Leon Vincent Chan, ex-intern and current 3rd year NUS Law Student.