Editors

Harry Cassin
Publisher and Editor

Andy Spalding
Senior Editor

Jessica Tillipman
Senior Editor

Richard L. Cassin
Editor at Large

Elizabeth K. Spahn
Editor Emeritus

Cody Worthington
Contributing Editor

Julie DiMauro
Contributing Editor

Thomas Fox
Contributing Editor

Marc Alain Bohn
Contributing Editor

Bill Waite
Contributing Editor

Shruti J. Shah
Contributing Editor

Russell A. Stamets
Contributing Editor

Richard Bistrong
Contributing Editor

Eric Carlson
Contributing Editor

Bill Steinman
Contributing Editor

Extend the privilege to compliance officers

The privilege is there to protect the privacy of our most important conversations. It’s a rule of evidence that excludes certain private statements from being used in legal, regulatory, or administrative proceedings.

What important conversations are now covered by the privilege? Those between attorneys and clients, doctors and patients, clergy and communicants, husbands and wives, therapists and patients, parents and children.

The question is, do conversations with compliance officers rise to that level of importance? I think they do.

Any society serious about fighting graft now recognizes the crucial role of compliance officers. They are the generals who direct their organization’s anti-bribery campaigns. They design and create compliance programs. While they train others to comply, they answer thousands of questions. They handle complaints from whistleblowers and help keep the whistleblowers safe. They talk to board members and answer their questions too.

So yes, if fighting corruption is important (which it is), then compliance officers have important conversations every day.

Is it even possible to expand the privilege to compliance officers? The privilege, after all, is an old doctrine. It must be chiseled in granite, fixed and unchangeable, right?

Not true. It turns out the privilege is as malleable as Silly Putty.

The Federal Rules of Evidence say that the privilege is part of the common law. And Rule 501 (“Privilege in General”) goes on to tell courts to handle claims of privilege “in the light of reason and experience.”

That’s it. If there’s no conflict with the U.S. Constitution, a federal statute, or “rules prescribed by the Supreme Court,” then federal courts can apply the privilege to any situation where it makes sense — “in light of reason and experience.”

(In civil cases governed by state law, the privilege is decided under the state law.)

To extend the privilege, lawyers representing those who seek to protect their communication with a compliance officer would argue that fighting graft is important, that compliance officers are important to the fight, and therefore conversations with compliance officers are themselves important as a matter of public policy and should be protected.

Privilege is generally decided on the facts of each case. Courts can and do reach various conclusions. Some recognize the parent-child privilege, for example, while others don’t.

It’s entirely possible that a court today, in the right case, could expand the privilege to conversations with compliance officers.

The arguments for it aren’t complicated. A good place to start would be the familiar comment to Rule 210 in the ALI Model Code of Evidence (1942), itself derrived from case law. Just replace “lawyers” and “legal advice” with “compliance officers” and “compliance advice.”

In a society as complicated in structure as ours and governed by laws as complex and detailed as those imposed upon us, expert legal advice is essential. To the furnishing of such advice the fullest freedom and honesty of communication of pertinent facts is a prerequisite. To induce clients to make such communications, the privilege to prevent their later disclosure is said by courts and commentators to be a necessity. The social good derived from the proper performance of the functions of lawyers acting for their clients is believed to outweigh the harm that may come from the suppression of the evidence in specific cases.

It’s time to extend “full freedom” to those who talk to compliance officers, not to suppress evidence but to bring more power and honesty to the fight against graft.

____

Richard L. Cassin, pictured above, is editor at large of the FCPA Blog.

Share this post

LinkedIn
Facebook
Twitter

4 Comments

  1. Is the simple answer to qualify as a Lawyer?

  2. It's an interesting suggestion. Quite a lot of the compliance officers I speak to regard legal professional privilege as harmful to their organisations and suggest it facilitates cultures of secrecy (a la GM) and lawyers having the back of the CEO rather than the interests of the company (their real client) as their guiding light.

  3. Professor Morehead might be on to something. In my organization (>100K employees in international private company), I regularly observe a differing treatment and/or response/behavior from employees when interacting with in-house counsel. I experience it myself when employees learn that I was in the legal department prior to Compliance. Did Shakespeare have it right?

  4. Interesting observations. As an attorney by education and current compliance officer at a big company, I see the difference in treatment and responsiveness to someone in Compliance vis-à-vis someone in Legal. I don't think companies are yet giving compliance its due importance and not sure management would be onboard with affording compliance officers the same degree of deference as it gives the legal department and investing the needed awareness/education extending the privilege would entail. Where I truly struggle with extending the professional privilege to compliance officers is in the wide range of backgrounds (both educational and experience) compliance officers have, thus the level of understanding that would be applied to having such privilege.


Comments are closed for this article!