Drowning in international waters?

How to stay abreast of treacherous cross-border e-discovery issues

The sweeping effects of globalization continue to transform the economic fortunes of many organizations. Companies that were previously content to limit their business operations to the U.S. are now branching into international markets in an effort to increase their revenues. As organizations push farther into unchartered economic waters, they are frequently encountering a range of murky legal issues. These issues, particularly cross-border discovery matters, can mushroom into costly and time-consuming tsunamis. Three cross-border discovery issues that have the potential to drown unsuspecting corporations in excess legal fees, lost opportunities and legal minutiae include:

  1. International discovery requests;
  2. Discovery requests made pursuant to 28 U.S.C. §1782; and
  3. The application of the attorney client privilege to corporate counsel.

Hostility to international discovery requests originating from the U.S.

Those organizations that safely navigate these complex provisions should have modest expectations about the results. Not only are such requests narrowly construed by foreign tribunals, they are rarely acted on with the alacrity required by the Federal Rules of Civil Procedure. Indeed, delays may stretch into months or years before a response is received. Given these factors, organizations should consider moving early in the case to acquire ESI from foreign venues if it is deemed essential to their claims or defenses.

28 U.S.C. §1782Enabling “American style” discovery in foreign litigation

The attorney client privilege may not extend to corporate counsel

A third discovery trap for unwary corporations lies in the limited recognition that many foreign countries have of the attorney client privilege for corporate counsel. Simply put, many nations do not extend the protections of the attorney client privilege to in-house lawyers. Continental Europe has a particularly deep-seated skepticism on this issue. That skepticism is based on the argument that in-house lawyers do not have sufficient “economic independence” from their employers to adequately provide unbiased legal advice. Such a view was recently affirmed by the European Court of Justice (ECJ) in Akzo Nobel Chems. Ltd. v. European Comm’n (Sept. 14, 2010). In Akzo, the ECJ held that the attorney client privilege does not encompass communications involving in-house counsel and company employees under European Union law. Invoking the issue of independence, the Akzo court reasoned that, “[i]t follows, both from the in-house lawyer’s economic dependence and the close ties with his employer, that he does not enjoy a level of professional independence comparable to that of an external lawyer.”

Contributing Author

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Philip Favro

Philip Favro brings over fourteen years of expertise to his position as Senior Discovery Counsel for Recommind, Inc. Phil is an industry thought leader, a...

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