Professional Liability Matters

The attorney-client privilege encourages full and frank communication between attorney and client, whether the client is an individual or a large corporation. Protecting confidential communications promotes broader public interests in the observance of law and the administration of justice. However, in shareholder derivative actions alleging harm by the corporation against stockholders, some courts have held that the corporate attorney-client privilege should be balanced with the interests of the shareholders, and that the privilege may therefore be subject to limitations. This is known as the “fiduciary exception,” which was recently upheld in Delaware.

Generally, we’re encouraged to share, to cooperate, and to collaborate. But, that’s not always the case for lawyers. Attorneys may shy away from these niceties because open communication may result in the unintended disclosure of non-public information during discovery. The attorney-client privilege obviously protects those communications between professional and client. The common-interest privilege goes further. The common-interest privilege protects the confidentiality of communications passing amongst attorneys for different parties, often in the context of a joint defense effort. This privilege affords all parties the opportunity for open communication, in turn enabling counsel to strategize in anticipation of or in the course of litigation. This privilege was significantly expanded in a recent decision out of New Jersey which expressly adopted broad confidentiality protections in the common interest scenario.

The attorney-client privilege does not provide an excuse to withhold all damaging documents. Documents in an attorney’s possession are not necessarily privileged and the refusal to produce discoverable materials may be grounds for sanctions. A Massachusetts court is currently considering whether a prominent, global law firm should be sanctioned for the allegedly imprudent conduct of a former partner. An appellate panel ruled that the trial court erred in deciding that the partner acted in good faith when he invoked the work-product doctrine to conceal key information in a suit against a former client. The appellate court has yet to determine whether sanctions are appropriate.

Anything you say can and will be used against you. Well, not always. Attorneys, litigants, and experts may be immune from liability arising from certain acts and statements made in connection with the pursuit of litigation in light of the litigation privilege. This privilege can provide an important and useful defense for professionals. But what is it and when may it be asserted? Read on to find out.