A recent decision from the Alberta Court of Queen's Bench regarding solicitor-client privilege in the context of negotiating the sale of a wholly-owned subsidiary will likely be a wake-up call for corporate counsel. Madam Justice Horner applied well-known and accepted principles regarding solicitor-client privilege in holding that the target and parent were parties to a joint retainer/common interest as part of negotiating the share purchase agreement, such that when the target and purchaser amalgamated post-closing, the parent could not assert privilege as against the amalgamated entity over the solicitor-client communications.
There are many ways to protect the parent's interest over solicitor-client privilege. Perhaps the easiest and most cost effective would be to provide a clause within the share purchase agreement that indicates that privilege over joint retainer/common interest communications remains with the parent post-closing.
For a full summary of this case, view our client update, Share Purchase Transactions, Solicitor-Client Privilege and Multiple Representations: A Cautionary Tale for Corporate Counsel. For more information on legal privilege, read the Bennett Jones guide, Legal Privilege.
Please note that this publication presents an overview of notable legal trends and related updates. It is intended for informational purposes and not as a replacement for detailed legal advice. If you need guidance tailored to your specific circumstances, please contact one of the authors to explore how we can help you navigate your legal needs.
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