Foreign companies losing discovery battles when their in-house counsel don't meet US standards
In China, among other countries, in-house counsel aren’t required to have a law license. Nonetheless, lawyers say, it would be highly unusual for communications between in-house counsel and a client to be produced in litigation.
However, the discovery rules change for foreign companies when they are involved in litigation in the United States, reports the Wall Street Journal (sub. req.). Recent court rulings have required foreign companies in China, India, the Netherlands and Russia to produce material that might have be privileged if they had been operating in the U.S. and following customary practices here.
Last month, a federal judge in Manhattan required the Bank of China Ltd. to produce material concerning an internal investigation that had been overseen by the bank’s China-based in-house counsel and chief compliance officer. In an earlier ruling in the case, Judge Shira Scheindlin said attorney-client privilege was inapplicable in a jurisdiction that didn’t require in-house counsel to have a law license or be authorized to appear in court, the newspaper reports.
“The notion of U.S.-style discovery is simply unknown in China and other civil law jurisdictions,” said attorney Lanier Saperstein, who represents the bank.
To avoid such rulings, in-house counsel at foreign companies are copying U.S. lawyers on communications and reconsidering whether they need to be put in writing, corporate lawyers say.
