Here, Sesto E Vecchi, Managing Partner of Russin & Vecchi takes us through the finer points of legal professional privilege under Vietnamese law. Turning the lens on in-house counsel, we learn a great deal about how and when the privilege can be preserved.
In-house counsel straddle the worlds of business and law. Particularly good balance is needed when it comes to issues of confidentiality. The unique characteristics of the attorney-client privilege in Vietnam make the tightrope act even more delicate to maintain.
Vietnam's Law on Lawyers1 provides a right of confidentiality between an attorney and her client. Generally speaking, the privilege is weak; for example, Vietnamese criminal law actually requires attorneys to disclose client information concerning criminal acts to government authorities. When it comes to in-house counsel, however, Vietnam's privilege does not distinguish between legal and non-legal communications.
In most countries, the right of confidentially is complicated by the nature of the in-house relationship. In-house counsel often discuss not only legal issues with their management, but commercial matters as well. For example, a discussion with the General Director, with the HR Manager, the Sales Director, or others does not often involve a pure legal issue in which a lawyer gives legal advice to her client, but rather a mixture of both business and law. In countries that distinguish between legal and non-legal discussions in recognising the privilege, discussions with in-house counsel may lose their privilege if a court determines that it is a business rather than a legal discussion.
Fortunately, because Vietnam's privilege does not distinguish between legal and non-legal discussions, in-house counsel communications are arguably covered under the privilege even when they involve primarily business matters. This broad privilege is obviously advantageous for organisations in Vietnam with in-house counsel.
A fine distinction...
There exists, however, a danger of being lulled into a false sense of security on account of this expansive privilege. While Vietnam's broader shield may lead in-house counsel and management in Vietnam to feel secure in discussing matters involving both business and law, such discussions may cause problems if an organisation finds itself embroiled in litigation abroad. Many jurisdictions do distinguish between legal and non-legal discussions, and a communication in Vietnam may be relevant in a civil or criminal case in, say, the US. A discussion of a non-legal nature may receive protection in Vietnam, but no protection in a jurisdiction where only legal content is privileged.
For example, even though a communication between in-house counsel and management may have taken place in Vietnam, the matter of privilege comes up regularly in the US under the Foreign Corrupt Practices Act, in the UK under the United Kingdom Bribery Act 2010, and elsewhere under the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. Vietnam is a signatory to the OECD Convention. In legal action taken abroad, US or other foreign prosecutors may seek corporate documents created in Vietnam and evaluate the applicability of the privilege under foreign law.
In-house counsel therefore, must take the limits of privilege protection into account. Both counsel and management must tailor their communications in sensitive matters in order to preserve the privilege in whatever jurisdiction the organisation may find itself litigating.
This article will speak primarily to the matter of privilege in Vietnam. It will describe the special problems in-house counsel face in Vietnam. It will also describe some of the ways in which in-house counsel of international companies can act to preserve the privilege in an international environment.
The privilege in general
If communications qualify as privileged, they are protected by law from disclosure by the lawyer. Both inside and outside of Vietnam, as a general rule, a lawyer is not allowed to disclose a client's legal communications on matters which she learns from a client to a third party, without the client's consent. The privilege, of course, belongs to the client, not the lawyer. That is, a client is free to release her lawyer from the privilege, and if the client directs her lawyer to disclose privileged information, the lawyer must comply. Generally, privileged communications between lawyers and clients are confined to legal communications (but, as we will see, Vietnam is different). The issue usually turns on whether a communication is of a legal nature, in which case it is protected, or whether it involves, say, a business discussion, in which case it is not protected. Many states will honour the privilege even when the third party that would benefit from disclosure is the state itself.
The privilege under Vietnamese law
Depending on the circumstances, the privilege in Vietnam can be either stronger or weaker than the protections afforded in other countries. For example, in Vietnam, the law (Article 25 of the Law on Lawyers) imposes an obligation of confidentiality on lawyers, but this privilege does not protect lawyers or their clients from disclosure where a law overrides the obligation of confidentiality and requires disclosure. To that important extent, the privilege in Vietnam is partial and limited. But while the privilege in Vietnam is limited (in that disclosure is compulsory by law in some circumstances,) as a general matter the privilege is broad. In Vietnam, the privilege covers both legal and non-legal communications, whereas in many countries it covers only legal communications. Furthermore, cases where the law overrides the obligation of confidentiality in Vietnam are not common.
The privilege in Vietnam may protect clients and lawyers even in foreign courts. Many foreign courts will determine the nature of protection of communications that take place in Vietnam (say, between in-house counsel and employees of foreign invested companies) by examining the nature of the privilege in Vietnam. Thus, the issue of privilege in Vietnam is very important even though there are limits to such privilege.
Article 25 of the Law on Lawyers states:
- Unless [consent is given] by clients in writing or otherwise provided for by law, lawyers may not disclose information on cases, affairs or clients they [learn during] the course of professional practice.
- Lawyers may not use information on cases, affairs or clients they [learn during the course of] professional practice for the purpose of infringing upon the State's interests, public interests or legitimate rights and interests of agencies, organizations or individuals.
- Law-practicing organizations shall ensure that their staff members do not disclose information on their cases, affairs or clients.
The privilege in criminal law matters
The privilege in Vietnam is at its weakest in criminal law matters. The criminal law effectively dilutes the attorney-client privilege; in fact, it is a crime for lawyers to conceal certain types of client information. Articles 22, 313 and 314 of the Penal Code2 provide:
- Any person who knows a crime is being prepared, carried out or has been completed but fails to denounce [the crime, the perpetrator, or the suspect] shall bear penal liability for having failed to denounce it as provided for in Article 313 of this Code.
- Those who . . . conceal one of the offenses defined in the following articles shall be sentenced to non-custodial reform for up to three years or between six months and five years of imprisonment: [this Article provides a list of about 70 crimes that are subject to denouncement].
- [If a crime amounting to an abuse of position or power is committed in order] to obstruct the detection of crimes, or [if] other acts of concealing criminals [are committed], the offenders shall be sentenced to between two and seven years of imprisonment
- Those who have full knowledge of one of the crimes defined in Article 313 of this Code, which is being prepared, is being or has been committed, but fail to denounce [the crime, the perpetrator, or the suspect], shall be subject to warning, non-custodial reform for up to three years or a prison term of between three months and three years.
Irrational as it may seem, there is a substantial body of opinion by lawyers and law school lecturers that states that the obligation to disclose or "denounce" a crime extends to situations in which a lawyer has a client who has committed a crime and the lawyer has information about the crime. If this opinion is accurate, the protection is virtually meaningless in criminal cases.
Moreover, to underscore the fragility of the client's right of confidentiality, the Criminal Procedure Code3 (Article 58.3) requires a lawyer who has collected documents or items that relate to a criminal case to hand them over to the investigative authority, prosecutor, or court. Specifically, Article 58.3 states:
- . . . Depending on each stage of the procedure, when collecting documents and/or objects related to the cases, defense counsels shall have to deliver them to investigating bodies, procuracies or courts.
- [The lawyer is] not to disclose investigation secrets they [learn] while performing the defense; not to use notes taken and/or copied from the case files for the purpose of infringing upon the State's interests, [or] the legitimate rights and interests of agencies, organizations and individuals.
The privilege protection against disclosure to the Vietnamese state is also weak in civil cases. Article 94 of the Code of Civil Procedure4 (as amended) gives the Court extraordinary power to compel disclosure, even in civil matters. There is no suggestion of exemption for privilege in the following language:
Failure to do so may leave such individuals, agencies, or organizations subject to legal consequences.
There is a vast difference between either outside or in-house counsel being careful not to disclose confidential information to someone who may misuse or take advantage of it, and being compelled to disclose by law.
We do not explore the general concepts, the history of enforcement, or possible permutations of the obligation to disclose. Neither do we compare the requirements of discovery in some foreign jurisdictions in which each side is required, under certain conditions, to share information with the other, except to say that this is a mutual requirement and is not an exercise of the state's power to compel disclosure. We repeat that the privilege of confidentiality as set out in the law appears to us to be of very limited value in criminal matters in Vietnam, and probably in civil matters as well. This suggests that the limited privilege that does exist should be vigorously defended. Moreover, a communication made in Vietnam, which may not be protected in Vietnam because it can be successfully challenged by the Vietnamese state, may nevertheless be protected in other jurisdictions if the Vietnamese state has not actually challenged the privilege.
The applicability of the Law on Lawyers' privilege of confidentiality to in-house lawyers
The foregoing discussion of the attorney-client privilege of confidentiality under Vietnamese law is easily applied to independent lawyers. But does the Law on Lawyers apply to in-house counsel? In our opinion, it clearly does. There is ample supporting language in the Law. Of particular relevance are Articles 52 and 53 of the Law on Lawyers, which are discussed later in this piece.
We also make a simple observation. A lawyer must obtain a practicing license from the Ministry of Justice and then register with a bar association. If the lawyer works as an in-house lawyer, (s)he is not obliged to modify or return the practicing license or change the registration with the bar association (as is the case if the bar member joins the government). (S)he is considered in such a case to belong to the bar. This indicates that an in-house counsel is indeed a "lawyer," and is thus governed by the Law on Lawyers and the rules on confidentiality.
Which exchanges are protected?
Inherently, and unlike a traditional outside lawyer/client relationship, in-house counsel discuss and often give advice on both legal and commercial issues. If we apply the already weak privilege of confidentiality to in-house lawyers, the privilege appears even weaker-not only because application of the law makes it weaker, but because the role and interaction of in-house counsel often make it difficult to conclude that, in a particular exchange or matter, it is a legal rather than a commercial matter which is involved.
Fortunately, however, content is apparently not an issue in Vietnam.
Vietnam's special situation
We have found no language that defines how broad the privilege under Article 25 of the Law on Lawyers is. In developed legal environments, as stated above, the attorney-client privilege of confidentiality usually relates only to legal communications. That is, while legal communications and legal advice are protected, communication on commercial issues is not protected. But it is not so simple to separate business/commercial communications from legal communications/advice. It is arguably easier to do so between a client and its outside lawyer. After all, one normally retains an outside lawyer to deal with legal issues. But what about communications between management and its in-house attorney? Such communications go on all day long at various levels. Some communications relate to law, but many are commercial discussions or involve mixed commercial/legal discussions. Often the context is very difficult to separate. To this we add the special circumstances of Vietnam, in which enterprises and entities (but not individuals) have no criminal liability. It may be hard to invoke the protection of confidentiality in Vietnam if it is enterprise rather than individual conduct that is questioned, the argument being that as an enterprise is not criminally liable, there is no attorney-client privilege for internal communications.
The privilege in Vietnam, however, might protect more than legal communications. Non-legal, commercial communications may also be protected. To requote Article 25 of the Law on Lawyers':
"Unless [consent is given] by clients in writing or otherwise provided for by law, lawyers may not disclose information on cases, affairs or clients they know in the course of professional practice."
Forgetting for the moment that the privilege may be challenged, the privilege itself is rather broad. It includes "disclose information on cases, affairs or clients [the lawyer learns through] the course of professional practice." This is broader than the traditional privilege which refers only to legal, not commercial, communications. The language of Article 25 seems to protect all information a lawyer learns while discharging her duties, providing for a broader privilege in Vietnam than the privilege often found elsewhere.
A technical reading of the Law on Lawyers suggests a privilege covering both legal and non-legal advice, but it also suggests a privilege limited to what a lawyer knows, not what he says. This is because the language of Article 25 refers only to the protection of information received. What of advice which an in-house lawyer gives her client? Can management claim that such advice is protected? The Law on Lawyers is silent on the matter. The only protection may be the unsubstantiated residual notion that the Law on Lawyers is intended to include all communication between a lawyer and client.
The impact of an employment agreement from an employee's perspective
The relationship between an in-house counsel and her company can and should be governed by the in-house counsel's employment agreement. The agreement's provisions concerning the in-house counsel's duties and relationship with the company should be drafted with preservation of the privilege in mind.
Article 53 of the Law on Lawyers, which governs the rights and obligations of a lawyer who is practicing pursuant to a labour contract, provides that:
- "Lawyers practicing law individually under labor contracts may provide legal services according to the contents of labor contracts [entered into] with agencies or organizations.[sic]
- "The rights and obligations of lawyers practicing law individually under labor contracts [with the] agencies and organizations hiring those lawyers shall comply with the labor law, this Law and relevant laws."[sic]
What are the implications of these provisions? An employment agreement may specify in separate, more detailed language which types of communications are considered to be client confidential. It might perhaps specify the persons/officers with whom exchanges are prima facie considered to be confidential. The agreement might specify the independent role of the lawyer in respect of company affairs and the lawyer's obligations to exercise confidentiality. Even if language in an employment agreement appears self-serving, it can help to frame the larger issue of what is considered by the employer to be confidential and to underline the independent role of the lawyer.
The matter of confidentiality might be specified in a separate, more detailed confidentiality agreement which all employees (or at least management) are routinely required to sign. Such an agreement could cover both legal and non-legal communications.
The value under Vietnamese law of language in an employment agreement or in a separate confidentiality agreement in respect of confidentiality remains unclear. Even so, as one should try to maximise all opportunities to define and protect the privilege of confidentiality, use of enhanced confidentiality agreements which deal with exchanges between management and in-house counsel should be considered.
As described above, Vietnamese law allows the state to compel disclosure of certain attorney-client communications. However, a naked demand from a government officer, in circumstances not supported by the law and legal process, is not sufficient to require an in-house lawyer to disclose information that she obtains from her employer. Moreover, despite the draconian measures in the law, there is nevertheless a sense of attorney-client confidentiality that even law enforcement agencies acknowledge. One would expect that the rights of the state under the Penal Code, for example, would be applied only in extreme cases.
Many questions remain, however. For example, assume that the privilege of confidentiality exists in prescribed circumstances, and assume that a government official demands the release of documents or other information. What precise circumstances will trigger the obligation to disclose? What authorities, signatures, etc. must an official provide in making the demand? What grounds are there to refuse to comply? Does the obligation apply to secondary evidence, to one's opinion, to both legal and non-legal communication, etc? To what extent will counsel be able to defend the privilege? Answers to these questions lie in the future.
Who is a lawyer?
We mention another matter in passing. The attorney-client privilege in Vietnam applies to lawyers. There is language to the effect that staff "of legal practice organisations" are also covered and bound by the privilege. But as a matter of caution, many law school graduates hold themselves out as lawyers during the time that they are qualifying for admission to the bar. Some such persons work in law firms and some work in-house. To state the obvious, to the extent that a person is not yet formally admitted to the bar, we do not believe that any privilege of confidentiality can be directly claimed and is probably available to such person only indirectly, as a member of a "legal practice organisation".
Steps which in-house counsel can take to protect communications with their employer
So what can in-house counsel do to strengthen the argument that its communications are privileged? We make no attempt to be exhaustive or to advise which steps have more legal value in Vietnam as opposed to other jurisdictions. We simply point out some practices that companies with in-house counsel should seek to adopt. We pay particular attention to situations where a communication takes place in Vietnam, but where it may be important to assert the privilege abroad where rules may be different.
- A very basic piece of advice for in-house counsel is that they should mark particularly sensitive documents "Client Confidential." This is at best a partial solution, but it does establish a presumption of client privilege which a challenger of the privilege must overcome. The "Client Confidential" label, however, should be used sparingly and with some caution. Overuse on matters which clearly do not involve confidential information can dilute the value of the "Client Confidential" designation.
- In-house counsel and management should take steps within the organisation to limit access to confidential, privileged communication so that a prosecutor, for example, cannot say that the information has been so widely disseminated that it is no longer confidential and is no longer protected.
- Be certain that any legal advice is introduced or couched in language which makes it clear that the information is legal, not commercial. That is, for example, one could introduce documents with language like "This responds to your request for legal advice in respect of [ o ] and this memorandum is considered to be confidential and privileged." This and other, similar statements should be considered. Taking the matter a step further, if legal advice is provided generally within the organisation, it should come from the Legal Department or with its clear approval.
- Also, an in-house lawyer should have a clear legal title. The legal title should be used for legal type communications. Consider special stationery marked 'Legal Department.' It may be easier to defend the confidentiality of communications from lawyers who are part of the "Legal Department" rather than, say, the HR Department. Legal advice should come from the Legal Counsel. That is, junior lawyers report to the Legal Counsel and the Legal Counsel reports to the General Director. The perception should be that the advice of lawyers in the Legal Department is privileged. A further means to demonstrate that a separate legal department deals with legal matters would be to create and maintain a separate legal file management system.
- As a further separation of legal and commercial affairs, if outside counsel is necessary, then it should be the head of the Legal Department, not management, who selects the outside counsel and is the principal communicator with it.
- If advice is both legal and non-legal, it is best not to present them both in the same document. That is, it is wise to set apart and identify the advice that is clearly legal, and it is even better to do so in a separate document. Email chains are dangerous if they blur the distinction between what is legal and what is commercial.
- An in-house counsel should probably not serve as a member of a committee that considers and acts on both legal and non-legal, that is, commercial) matters, even if the primary role is to give legal advice. It is better for such counsel to serve as an outside "legal advisor" to such a committee and not take part committee votes or other actions apart from giving legal advice.
- Management, when requesting legal advice from in-house counsel, should make it clear that legal advice (as opposed to business advice) is being requested.
The matter of in-house client confidentiality is as important in Vietnam as it is elsewhere. The law on the subject is weak due to the counter interests of the State in criminal matters and the language of the law in civil matters. To assure that the privilege can be exploited to the fullest extent, it is necessary to act in ways that will define, preserve, and defend the privilege.5
1[Law on Lawyers] (effective 1 July 2013).
2[Penal Code], No. 15/1999/QH10, (21 Dec. 1999), amended by. [Law Amending and Supplementing a Number of Articles of Penal Code], No. 37/2009/QH12, (19 June 2009), available at http://moj.gov.vn/vbpq/en/Lists/Vn%20bn%20php%20lut/View_Detail.aspx?ItemID=610.
3[Criminal Procedure Code], No. 19/2003/QH11 (26 Nov. 2003), available at http://www.noip.gov.vn/noip/resource.nsf/vwResourceList/3457A7711572E0534725767200203DDA/$FILE/CRIMINAL%20PROCEDURE%20CODE.pdf
4[Civil Procedure Code], No. 24/2004/QH11 (15 June, 2004), available at http://www.noip.gov.vn/noip/resource.nsf/vwResourceList/3457A7711572E0534725767200203DDA/$FILE/CIVIL%20PROCEDURE%20CODE.pdf
5The author acknowledges the useful ideas set out in the following articles: The Conundrum of Preserving In-house Attorney-Client Privilege prepared by Thomas B. Cronmiller (NYS Bar Journal, January 2010), The Continuing Erosion of the Attorney-Client Privilege for In-house Counsel, George A. Schieren and Jonathan B. Austin (a paper presented at the FINRA (Financial Industry Regulatory Authority) Annual Conference in Washington, DC, May 23, 2011); and Keep Your Clients Close, and Your In-House Counsel Closer, prepared by Sascha Hindmarch and Martin Meredith (Asianmena Counsel, Volume 10, Issue 1, 2012.)
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.