DOJ Announces New Corporate Guidelines that Ease Pressure for Privilege Waivers
Updated: The U.S. Department of Justice has unveiled new guidelines that ease pressure on corporations to waive attorney-client privilege.
Under the new guidelines, corporations will no longer be required to waive the privilege to show their cooperation with the government and get more lenient treatment from prosecutors. Deputy Attorney General Mark Filip announced the new policy today at the New York Stock Exchange, according to a Justice Department press release.
ABA President H. Thomas Wells Jr. says in a press release that the guidelines are a step in the right direction, but no substitute for much-needed legislation to ensure that the rights of corporate defendants are respected.
“While the new guidelines are a welcome improvement over the McNulty Memorandum, the rights of American employees and the businesses they work for are too important to be subject to constantly shifting administrative policies. The Department’s new guidelines are its fifth such policy in ten years and can be changed again at any time,” he says in the statement.
“Unlike legislation, guidelines can provide no certainty that critical attorney-client privilege, work product, and employee constitutional rights will be protected in the future. These bedrock legal rights are sacrosanct and must not be dependent on the personal leanings of each new deputy attorney general. As a result, legislation like S. 3217 and H.R. 3013, the ‘Attorney-Client Privilege Protection Act,’ is urgently needed to permanently solve the problem of government-coerced waiver.”
The new guidelines state that credit for cooperation will not depend on the corporation’s waiver of attorney-client privilege or work product protection, but rather on the disclosure of relevant facts.
The new rules also instruct prosecutors that they may not penalize companies for paying the legal fees of their employees. The rules were released on the same day that a federal appeals court upheld the dismissal of 13 indictments against employees of the accounting firm KPMG because prosecutors had pressured the company to cut off their legal fees, ABAJournal.com reports in a separate story.
The guidance says prosecutors may not consider whether a corporation has sanctioned or retained culpable employees in evaluating whether to assign cooperation credit to the corporation.
Filip had outlined the upcoming changes in a letter to Congress as it considered legislation to protect attorney-client privilege.
R. William Ide III, chair of the ABA Task Force on Attorney-Client Privilege, has said the Justice Department changes don’t go far enough and legislation is still needed. He says the new guidelines won’t affect other agencies that pressure corporations to waive privilege, including the Securities and Exchange Commission and the Environmental Protection Agency.
The New York Times previewed the changes in a story this morning.
Updated at 12:55 p.m. and 3:10 p.m., central time, to reflect that Filip has announced the changes and include material from ABA press release, respectively.
