Supreme Court Rules In-House Lawyers Do Not Have Privilege Under New Indian Law

The Supreme Court of India, in its judgment In Re Summoning Advocates, has determined that in-house legal counsel do not hold the status of 'advocates' as required by Section 132 of the Bharatiya Sakshya Adhiniyam, 2023. Consequently, communications and advice provided by these internal lawyers are not entitled to legal privilege under this specific provision.

This ruling has far-reaching implications, particularly for multinational corporations with significant operations in India. Internal legal teams often handle crucial advice, draft risk assessments, and engage in frank discussions regarding legal matters. Previously, such information might have been protected by privilege. Now, if legal proceedings commence in India, this confidential information could be subject to disclosure, posing a substantial risk to business strategy and sensitive data.

The judgment overlooks established principles seen in common law jurisdictions, where litigation privilege encourages candid communication for legal battles (Waugh v. British Railways Board). It also contrasts with the approach taken by the Bombay High Court in Larsen & Toubro Ltd v. Prime Displays Pvt Ltd, which acknowledged privilege for documents created in anticipation of litigation.

The modern corporate world relies heavily on in-house legal counsel for timely, commercially nuanced advice, a scenario largely different from when privilege rules were drafted nearly a century ago. The court's strict adherence to the BSA's wording may not align with current commercial realities.

Given India's ambition to become a hub for international commercial disputes, maintaining predictability in legal privilege is vital. The article suggests the issue warrants revisiting, either through legislative amendments or a judicial review of the In Re Summoning Advocates decision, to preserve trust in legal counsel, regardless of their employment status.

Impact: This ruling could increase legal risks for corporations by potentially exposing internal legal advice to discovery. It might necessitate a recalibration of how companies manage and protect confidential legal communications in India, especially those involving cross-border aspects. Rating: 8/10.

Difficult terms: * **Privilege**: In a legal context, privilege refers to a right to refuse to disclose certain information or to prevent others from disclosing it, typically protecting confidential communications between specific parties (like lawyer-client) from discovery in legal proceedings. * **In-house counsel**: Lawyers employed directly by a company or organization to provide legal advice and services related to the company's business operations. * **Bharatiya Sakshya Adhiniyam, 2023 (BSA)**: India's new criminal evidence law, which replaces parts of the Indian Evidence Act, 1872. * **Conflict of law**: A branch of law that governs legal disputes involving parties, property, or events located in different jurisdictions, determining which jurisdiction's laws should apply. * **Litigation privilege**: A form of legal privilege that protects communications made in contemplation or furtherance of litigation, encouraging parties to gather information and prepare their cases freely. * **Cross-border transactions**: Business deals or financial exchanges that involve entities or individuals from more than one country.