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The
Privilege Communication between the
attorney and client covers any
communication made to the attorney by
his client during the course and for the
purpose of his employment as barrister,
pleader, attorney or vakil, by or on
behalf of his client and it continues
even after the employment has ceased.
The purpose of privilege granted to the
attorney-client relationship is to
encourage full and frank communication
between the attorney and client, wherein
the client is reasonably assured that
the information revealed to the attorney
in confidence is not disclosed, without
the client’s consent. In this way, the
attorney can better serve the client by
providing fully informed legal advice. |
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Communication inter-se fiduciary relationships are accorded the status of
‘Privilege Communication’ under the Indian Evidence Act, 1972 (“the Act”). Such
communications cannot be used in court, in evidence, due to the immunity
provided for non-disclosure under the Act, barring few exceptions. There are
different types of relationships which enjoy Privilege Communication status and
one of them is between the attorney and client. This article focuses on whether
the communication between the in-house counsel and the client enjoys the legal
privilege under Indian laws.
The Privilege Communication between the attorney and client covers any
communication made to the attorney by his client during the course and for the
purpose of his employment as barrister, pleader, attorney or vakil, by or on
behalf of his client and it continues even after the employment has ceased. The
purpose of privilege granted to the attorney-client relationship is to encourage
full and frank communication between the attorney and client, wherein the client
is reasonably assured that the information revealed to the attorney in
confidence is not disclosed, without the client’s consent. In this way, the
attorney can better serve the client by providing fully informed legal advice.
Due to the growing complexities of regulatory requirements and the need to
remain cost competitive, corporations are relying more heavily on the acumen and
skills of their in-house counsel to perform majority of the corporation’s legal
work. An in-house counsel is a full time salaried employee of the company
appointed to render legal advice regarding regulatory compliance, risk
management and ethics. The big question herein is whether the communication
between the in-house counsel and the corporations’ representative,, mainly upper
management, is privileged or not, and whether the same can be kept confidential
under the provisons of the Act.
Section 126 & 129 of the Act provides the privilege communication between the
attorney and the client. Section 126 of the Act is applicable to a barrister,
attorney, pleader or vakil. As per the provisions of this section, the privilege
communication can only be disclosed with the express consent of the client.
Privilege communication also includes the contents or condition of any document
with which he has become acquainted in the course and for the purpose of his
professional employment. It also includes any advice and the obligation stated
in this section and as discussed already. Section 129 of the Act provides that
no one shall be compelled to disclose to the court any confidential
communication which has taken place between the client and his legal
professional advisers, unless he offers himself as a witness, in which case he
may be compelled to disclose any such communications as may appear to the Court
necessary to be known in order to explain any evidence which he has given, but
no others. It has frequently been held that the rule as to privileged
communications of attorneys does not apply when the litigation arises between
attorney and client and when their communications are relevant to the issue.
The above discussion highlights clearly that an in-house counsel being in full
time employment of the corporation, does not fall in the category of the
advocates aformentioned. Thus, the communication between an in-house counsel and
corporation’s representatives namely director, officers are not considered as
‘privileged’. Therefore, such communication interse inhouse counsel and the
corporate houses cannot seek protection under the aforementioned sections of the
Act, but the interest of the corporate houses are safeguarded with the
confidential clause in the terms of employment although the clause is not
similar in nature to the privilege communication clause but provides protection
to the interest of the corporate clients.
To conclude, there is growing need of the in-house counsel with corporate
houses, even though they engage the services of independent advocates, to
execute legal work. However, it is the nature of employment that keeps the
fiduciary relationship between the inhouse counsel and the corporate house
outside the bracket of “Privilege Communication” as against the relationship
between the independent counsel and corporate houses. The stand is in
synchronisation with the view taken in this regard in catena of judgments as
well. Big corporate houses are at liberty to individually protect their interest
by the confidentiality clause in terms of the employment. Although, the American
legal system and the British system recognise such communication as “Privilege”,
the Indian system, where globalisation is a recent phenomenon and corporate
houses are growing in presence and size each day, is yet to decide whether the
umbrella of privilege communication should protect the inhouse counsel.
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