Friday, February 13, 2015


A US Magistrate Judge, in the ongoing case against Bank of China, which is accused of banking a senior Palestinian Islamic Jihad official who moved millions of dollars through his accounts, has ordered the Bank to turn over materials from its pro-suit investigation of possible misconduct. The case is a matter of great public interest, due to persistent allegations that many international terrorist organizations are engaged in widespread use of Chinese banks, to evade global anti-terrorist sanctions. The plaintiffs were victims, and their families, of suicide bombings that occurred in Israel.

The Bank had objected to the disclosure of reports generated in an internal investigation, initiated after planitiffs' counsel had notified the Bank of an impending lawsuit filing, and offering to enter into settlement negotiations. Bank officials were advised, after the investigation had been conducted, that the plaintiffs allegations were baseless.

After suit was filed, and a demand for discovery made, the bank counsel objected on two grounds:
(1) That the investigative material was barred by the Attorney-Client Privilege, though it was not part of any correspondence between the bank and any American attorneys. Subsequently, it was delivered to counsel, for an opinion.

(2) That the material was also barred under the Work Product Doctrine, as it was prepared in anticipation of litigation, by agents acting under the orders of an attorney. The facts showed that no attorney was directing Bank staff in the pre-suit preparation of the report, which went directly to Bank management.

The Court, in an opinion filed by the Magistrate, held:
(A) That the information collected was not barred by the Attorney-Client Privilege, simply because the Bank's staff intended that it later would be transmitted to legal counsel for advice. Documents for the bank's own internal investigation of the matter, which were not direct attorney-client communications, were not privileged, just because they were later given to counsel, when he was retained.

(B) That the Work Product Doctrine did not apply, because the materials must result from the conduct of investigative or analytical tasks to aid counsel in preparing for litigation. Additionally, if the materials would have been performed in essentially similar form, irrespective of litigation, they were not barred by this privilege. The bank did not meet its burden of showing that the materials were protected as Work Product.

The plaintiffs' Motion to Compel Production was granted in January; the Order was recently unsealed.

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