Law Times

PAGE 10 FOCUS Solicitor-client privilege How do protections apply to M&A deal teams? BY JULIUS MELNITZER For Law Times knows what a deal team is. And just about everyone assumed that solicitor-client privilege ex- tended to the deal team. Th at was until the question J came up and no one could fi nd any direct Canadian authority on the subject. "Th e absence of authority was a bit startling to me be- cause we as litigators see deal teams all the time," says Mark Gelowitz of Osler Hoskin & Harcourt LLP. "But it was an issue that had to be decided." Th e issue arose when the global mining companies that were the defendants in the case involving Barrick Gold Corp. and Goldcorp Inc. retained out- side fi nancial advisers to help them negotiate the purchase of ust about everyone involved in a signifi cant mergers- and-acquisitions transaction an interest in a mining opera- tion in Chile. Th e deal team also included employees of the defen- dants as well as in-house and ex- ternal lawyers and tax advisers. Chris Paliare, Odette So- riano, and Tina Lie of Paliare Roland Rosenberg Rothstein LLP, representing the plaintiff Barrick, requested production of all deal team communica- tions that involved the external fi nancial advisers and sought or contained legal advice. Gelowitz and colleague Sar- ah Millar, representing Gold- corp and Sociedad Contractual Minera el Morro, joined coun- sel for the other defendants in arguing that the communica- tions were privileged because the fi nancial advisers' involve- ment was necessary to ensure that the deal team, including its lawyers, understood the fi - nancial implications of their decision on the transaction. Paliare and his team 'If you've got 15 investment bankers on the file, it would be prudent not to copy all of them with privileged materials,' says Mark Gelowitz. responded that the defendants were commercially sophisticat- ed parties that didn't require external fi nancial advisers to ensure that their lawyers pro- vided meaningful legal advice. While Superior Court Jus- tice Colin Campbell ruled that no blanket privilege for the deal team existed, he said the scope of the protection depended on the facts of each case. Here, he ruled, privilege extended to the fi nancial advisers be- cause their involvement was "necessary and appropriate to the consideration, structuring, planning, and implementation of very complex transactions in a very short time frame;" the "overall legal considerations" involved in the transaction re- quired their specialized advice; the interrelationship between consultants, clients, and law- yers was often a practical real- ity in complex matters where specialized expertise was nec- essary; and the fi nancial advis- ers in this case understood the importance of confi dentiality, which was a mainstay of solici- tor-client privilege. As Soriano points out, however, Campbell did engage in a document-by-document review before ruling on privi- lege, and it's likely that this will become a common exer- cise when questions around protection for the deal team come up in the future. For his part, Paliare says the issue is one worthy of appellate review. "I have my doubts about the correctness of the decision, but there's a certain urgency in this case which Justice Campbell is moving along very quickly, and that didn't make an appeal practical here," he says. "For the time being, I'm sat- isfi ed with the fact that privilege for the deal team won't be taken for granted anymore and that there will be a review of materi- als to determine what is prop- erly protected by privilege." However that may be, the ORGANIZE • ANALYZE • COLLABORATE Case Notebook – NEW – case is a useful guide for law- yers seeking to maximize the likelihood of maintaining solicitor-client privilege for deal teams. "Perhaps the most important thing to watch for is the unnecessary dissemina- tion of privileged communica- tions," Gelowitz says. "If you've got 15 investment bankers on the fi le, it would be prudent not to copy all of them with privileged materials. Th e best practice is to designate who at the top of the pyramid will participate in sensitive privileged communications." He suggests that parties INCREASE YOUR PRODUCTIVITY AND EFFICIENCY WITHOUT SACRIFICING QUALITY With Case Notebook, a centralized, electronic case file, you and your team can enter and share key facts, insights, notes, documents, main characters, evidence, legal research, and more. ORGANIZE KEY CASE DOCUMENTS What if you could easily organize important case information? What if you could push a button on your case file and the document you were looking for appeared at the top? What if you could access your working case file from anywhere? You can with Case Notebook. ANALYZE CASE CONNECTIONS Are your case files a rainbow of sticky notes and highlighted excerpts? Do you struggle to effectively make connections in your case? Wouldn't it be helpful if you could see a bird's-eye view of your entire case? You can with Case Notebook. COLLABORATE WITH YOUR LITIGATION TEAM Do you find it difficult to utilize the work of your entire litigation team? Does each team member have a separate way of marking issues and facts they deem important? What if you could ensure your litigation team members would never work in isolation again? You can with Case Notebook. For a FREE demonstration, call 1-866-609-5811 or visit www.westlawcanada.com that retain advisers who may be involved in legal communi- cations carefully consider the context of their engagement agreements with them and ensure that they're reduced to writing before the substantive work begins. "Th e agreements should also mandate strict confi denti- ality in deal team discussions, provide that the presence of a fi nancial adviser in legal dis- cussions is not intended to be a waiver of privilege, and refer to the importance of the fi nancial adviser's input in the context of receiving appropriate legal advice," Gelowitz says. "Although these features did not appear in the Barrick case and are therefore clearly not a prerequisite for maintaining privilege, they would be of as- sistance if the issue arose." August 8, 2011 • LAw times Untitled-2 1 www.lawtimesnews.com 8/3/11 11:03:54 AM

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