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Attorney-client Privilege: Extended to Foreign Lawyers in China?

Posted in Corporate, Dispute Resolution, International Trade

Often, when Chinese lawyers deal with foreign-related cases they see the term "attorney-client privilege" in the foreign lawyer issued legal opinions and memorandums. Furthermore, many foreign lawyers would like to know if their communication with the Chinese lawyers they work with is provided the same amount of protection as their communication with their clients.

 

Black’s Law Dictionary defines attorney-client privilege as a client’s right to refuse to disclose, and to prevent anyone else from disclosing, confidential communications between him or her and his or her attorney. This privilege prevents attorneys from disclosing their communications with their clients. Furthermore, this protection prevents any other party, including, the attorney from using any information that could be considered "attorney-client privilege" as evidence in a litigation. However, there are exceptions. For example, an attorney has a duty to disclose privileged information if the disclosure is related to criminal activities. The attorney-client privilege was established to encourage honest communication between an attorney and his or her clients. This opportunity for honest communication will reduce the chance that a client will intentionally or unintentionally engage in an illegal activity due to ineffective communication with his or her attorney.

 

Gui Hongxia and  Li Xiang of King & Wood’s Dispute Resolution Group

 

I. PRC law does not protect confidential information between an attorney and a client as privileged

 

The concept of "attorney-client privilege" does not exist under PRC law. In other words, confidential communications between an attorney and a client are not privileged or protected.

 

Article 33 of the PRC Lawyer’s Law(1) ("Lawyer’s Law") provides that attorneys must protect the confidentiality of their clients’ private information, and if they are aware of any of their clients’ trade secrets they must also protect them. Furthermore, this article requires attorneys to protect all of the state secrets they discover while working with clients.

 

At face value, an attorney is only accountable for protecting these two very specific items. However, the scope of this protection is up to interpretation because there is no clear definition of exactly what private information entails. Yet, the more important point is the fact that this article does not exempt attorneys from being forced to disclose this information in a judicial action. Therefore, a court can order an attorney to testify about a client’s private information or trade secrets in a judicial proceeding.

 

Article 70 of the PRC Civil Procedure Law ("Civil Procedure Law") establishes that an attorney has a duty to testify about a client’s private information in court by stating that anyone (organizations or individuals) that knows any facts that are relevant to a case must provide those facts in court. Yet, Articles 66 and 120 of the Civil Procedure Law do provide a client with trade secrets some protection because these articles allow a case that involves trade secrets or a client’s private information to be held in a closed-door courtroom when a party requests that the proceeding not be held in public. The said provisions of theCivil Procedure Law create the basis for lawyers to be compelled to testify on a client’s confidential information, and these laws prevail over any ethical duty of a lawyer to protect a client’s information under attorney-client privilege. Furthermore, a lawyer cannot refuse to testify based on the fact that a client may request the information be discussed in a closed-door courtroom. A closed-door courtroom is only available for use in a case if a client requests one, and even if a client does request a closed-door courtroom, the request does not relieve his or her lawyer of the obligation to disclose the confidential information to the court.

 

On the contrary, Article 45 Section 1 Subparagraph 3 of the Lawyer’s Law states that if an attorney conceals facts, or threatens or solicits others to conceal facts from a court, the court may revoke that attorney’s bar license. Furthermore, depending on the kind of information that is concealed from the court the attorney could be subject to criminal liability.

 

Overall, prior to the 1996 Lawyer’s Law, an attorney had no legal duty to protect the information a client provided. Even after this law was put in place, if the information an attorney is aware of is important to a litigation, he or she can still be forced to disclose it in court. Furthermore, if an attorney does not provide this important information, he or she can be held criminally or administratively liable for not disclosing the information to the court.

 

PRC law does not protect any legal document and correspondence that is marked "confidential and privilege." This fact shows that attorneys and their clients are not exempt from disclosing information that would otherwise be protected by attorney-client privilege outside of the PRC.

 

II. PRC law does not protect the attorney-client privilege of foreign lawyers practicing under foreign laws in China

 

Under Chinese law, all parties with the knowledge necessary to decide a case are obligated to provide that information in court, and confidential communication between attorneys and clients is not exempt from this disclosure in court. International conflict of law principles establish that a court with jurisdiction over a case will establish the procedural rules for the case. Therefore, in China, foreign lawyers must comply with the Civil Procedure Law and the Lawyer’s Law, and they must testify in PRC courts about the evidence they have knowledge of.

 

Article 3 of the Administrative Rules for the Representative Offices of Foreign Law Firms establishes that foreign law firms and their attorneys must follow the PRC’s laws, rules, and regulations. Furthermore, Article 3 requires foreign attorneys in foreign law firms to strictly comply with the PRC’s rules for lawyers’ professional ethics and practice. Furthermore, foreign law firms and their attorneys must not jeopardize China’s national security and public interest when they provide their legal services in China. This provision indicates that, under PRC law, the rights and obligations of foreign attorneys working in China are the same as the rights and obligations of Chinese lawyers.

 

For the said reasons, foreign lawyers cannot be exempt from testifying in Chinese court based on a claim of attorney-client privilege under non-Chinese laws.

 

III. The 2008 amendments to the 1996 Lawyer’s Law reinforces the protection of confidential information between an attorney and a client

 

The 1996 Lawyer’s Law was amended on October 28, 2007, these amendments came into effect on June 1, 2008 ("Amended Lawyer’s Law"). Specifically, the amendments to the law increased the protection afforded attorney-client confidential communication.

 

Article 38 of the Amended Lawyer’s Law states provides that attorneys must protect the confidentiality of their clients’ private information, and if they are aware of any of their clients’ trade secrets they must also protect them. Furthermore, this article obligates attorneys to protect the state secrets they discover while working with a client. Moreover, if a client requests that the attorney keep certain information confidential, even though it would otherwise not be confidential, the attorney has the duty to keep this information confidential. However, if the information that the client requests be kept secret involves a criminal activity, which is, has, or will be committed, then the attorney must disclose this information to PRC authorities. Finally, if a client’s activities would jeopardize national and public security, or if a client’s actions could cause someone serious personal or property damage, then a lawyer must inform government authorities of those activities.

 

Article 49 Section 4 of the Amended Lawyer’s Law eliminates a lawyer’s duty to reveal all material facts of a case. Thus, an attorney may conceal a client’s confidential information from a court when he or she is litigating a case. Before these amendments to the Lawyer’s Law attorneys had the duty to present all of the facts of a case, and if they did not reveal everything they knew about a case they could be held liable for concealing that information.

 

The Amended Lawyer’s Law has strengthened client confidentiality requirements. However, the Amended Lawyer’s Law does not expressly establish that lawyers may refuse to give testimony in court based on attorney-client privilege, or the information that should be used as evidence because it is protected by "attorney-client privilege." The amendments indicate that the Amended Lawyer’s Law is taking steps towards establishing the basic concept of attorney-client privilege in the PRC. These efforts can be seen by the fact that the Law clearly establishes that attorneys must keep confidential information secret, and attorneys must also keep any additional information that clients request them to keep secret, even if, the information the client requests be kept secret would not otherwise be considered confidential. Furthermore, eliminating the possibility that an attorney could face liability for keeping facts from a court shows that there are items parties can keep from the PRC’s courts, which in some cases may be attorney-client confidential communication. These changes to the Lawyer’s Law show that the PRC’s government is becoming more receptive to the concept of attorney-client privilege, and that the government is likely to change Chinese law in more ways that will move China toward accepting the concept of attorney-client privilege.

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