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.

Vietnam's Law on Lawyers1 provides a right of confidentiality between an attorney and her client. Of some interest to in-house counsel, Vietnam's privilege does not distinguish between legal and non-legal communications, that is, non-legal communications are also protected. While the language of the privilege is clear, the privilege itself is weak--even in some civil matters. Vietnamese criminal law actually requires attorneys to disclose client information to government authorities when certain criminal acts are involved.

Confidentially in the in-house relationship is special. 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 only 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 extend the privileged only to discussions involving legal issues, discussions with in-house counsel may lose their privilege if a court determines that business rather than pure legal issues were discussed.

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 certainly an advantage.

A fine distinction...

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. They may ignore the broader Vietnam protections and apply their own rules which often deny the privilege if the discussions involve business matters--event if those discussions would be protected in Vietnam.

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 protect the privilege and maximize it 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. It will also describe some of the ways in which in-house counsel can act to preserve the privilege in Vietnam and 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 the client, 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 have said, Vietnam protects all communications). In an international context, 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

Article 25 of the Law on Lawyers states:

  1. 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.
  2. 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, organisations or individuals.
  3. Law-practicing organisations shall ensure that their staff members do not disclose information on their cases, affairs or clients.

The law (Article 25 of the Law on Lawyers) imposes a broad obligation of confidentiality on lawyers, but as we will learn below, 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. as it covers both legal and non-legal communications, whereas in many countries it covers only legal communications.

Some foreign courts may determine the nature of the protection of communications which takes place in Vietnam and apply the privilege as in exists in Vietnam. In such cases, the privilege in Vietnam can be extended to foreign litigation. However, applying the privilege as it exists in Vietnam, in foreign litigation is not normal. Foreign courts will normally apply the rules that apply in their own jurisdiction.

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:

Article 22:

  1. 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.

Article 313:

  1. 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.
  2. [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.

Article 314:

  1. 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 fails 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, and in view of these provisions of the Penal Code, 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 on most criminal cases.

Moreover, and 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:

  1. . . . Depending on each stage of the procedure, when collecting documents and/or objects related to the cases, defense counsel shall have to deliver them to investigating bodies, procuracies or courts.
  2. [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, organisations and individuals.

Being civilised?

The 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:

"2. The court may request directly or in writing [that] individuals, agencies or organisations that are managing or keeping evidence, to supply it. The individuals, agencies or organisations that are managing or keeping such evidence shall have the responsibility to supply the evidence fully and in time as requested by the courts within fifteen days as from the date of receiving the requests.

There is a vast difference between being careful not to disclose confidential information and being compelled by law to disclose it. There are legal consequences for failure to disclose.

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? There is ample supporting language in the Law that it clearly does. 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, she is not obliged to modify or return the practicing license or to change the registration with the bar association (as is the case if the bar member joins the government). She continues to belong to the bar. 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?

The privilege in Vietnam, as written, protects more than legal communications. Non-legal, commercial communications may also be protected. To repeat Article 25.1 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 [learn during] the course of professional practice."

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:

  1. "Lawyers practicing law individually under labor contracts may provide legal services according to the contents of labor contracts [entered into] with agencies or organisations.
  2. "The rights and obligations of lawyers practicing law individually under labor contracts [with the] agencies and organisations hiring those lawyers shall comply with the labor law, this Law and relevant laws."

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 should reference both legal and non-legal communications. Use of enhanced confidentiality agreements which deal with exchanges between management and in-house counsel define the obligations and expectations.

Making demands

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 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.

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 entitled to 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, the privilege of confidentiality cannot be directly claimed. It is 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

We return to the basic circumstances of protection to the extent it exists. The extent of the privilege--both criminal and civil--is weak and it can be challenged by a court in Vietnam.

Even 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. We simply point out some practices that companies with in-house counsel should seek to adopt. We include situations where a communication takes place in Vietnam, but where it may be important to assert Vietnam's privilege of confidentiality abroad.

  1. They should mark particularly sensitive documents "Client Confidential." It establishes a presumption of client privilege which a challenger of the privilege must overcome. However, overuse on matters which clearly do not involve confidential information can undermine the value of the "Client Confidential" designation.
  2. 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 information has been so widely disseminated that it is no longer confidential and is no longer protected.
  3. 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 ["X"] and this memorandum is considered to be confidential and privileged". 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.
  4. 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 and staff 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 narrowly shared. A further means to demonstrate that a separate legal department deals with legal matters is to create and maintain a separate legal file management system.
  5. 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 outside counsel and is the principal communicator with an outside lawyer.
  6. If advice is both legal and non-legal, do not present them both in the same document. That is, set apart and identify 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.
  7. 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 counsel to serve as an outside "legal advisor" to such a committee and not to take part in committee votes or other actions apart from giving legal advice.
  8. 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

Footnotes

1. Law on Lawyers with effect from 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)

3. [Criminal Procedure Code], No. 19/2003/QH11 (26 November 2003)

4. [Civil Procedure Code], No. 24/2004/QH11 (15 June 2004)

5. The 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.