Shari Klevens and Alanna Clair, Dentons. Shari Klevens (left) and Alanna Clair, Dentons. (Courtesy photo)

Many transactions, litigations or business disputes can involve multiple parties who have different attorneys but aligned interests. As a result, those parties may want to communicate with one another on issues of strategy or planning without risking the waiver of any applicable privileges or immunities. In such a situation, clients and counsel can benefit from the options developed by courts, including by sharing a joint defense or common interest privilege.

The prerequisites, scope and boundaries of the joint defense or common interest privilege can differ significantly, depending on the jurisdiction. State and federal jurisdictions vary over whether they even recognize a joint defense or common interest privilege, as well as to what extent such a privilege applies. To bridge these gaps, many attorneys will pursue a formal written agreement on behalf of their clients, although such an agreement does not always need to be in writing to be enforceable.

One thing to keep in mind is that some jurisdictions distinguish between—and strictly define— the joint defense privilege and the common interest privilege. Some courts have determined that the former is a narrow privilege, most often arising from actual litigation, while the common interest privilege is generally viewed as broader and does not require litigation to be pending. Adding to the complexity of this issue, some courts use the terms almost interchangeably, with no meaningful distinction between the two.

Thus, many attorneys addressing this issue will attempt to recognize the commonly accepted distinctions between the two privileges and then try to create enforceable protections. Here are some tips to consider.

What is the Joint Defense Privilege?

In litigation, co-defendants often share a common interest in defeating the plaintiff’s claims. Particularly in situations where the co-defendants are not seeking to shift blame to each other, courts have recognized that the defendants might engage in a joint defense, sharing confidences and secrets (as well as expenses). In that context, although communications among the defendants are likely not protected in the event of a subsequent dispute between them, the communications could be protected from discovery by the plaintiff if the defendants share a joint defense.

As a strictly legal matter, the joint defense privilege is something of a misnomer, because it is not actually an affirmative privilege. Instead, it is typically considered an exception to the rule on waiver. In most contexts, sharing privileged and confidential information with a third party constitutes a waiver of the privilege. However, parties to a joint defense agreement can generally preserve their privilege, even after sharing confidential information with each other.

To maintain the privilege in sharing communications with others, a party typically is called to show three things: that the communications were made pursuant to a joint defense, that the communications were made to further the goals of that joint defense and that the privilege was not otherwise waived (i.e., the joint defenders are not sharing the communications beyond their limited group).

Although it may not be required, many practitioners will document in writing the scope, duration, boundaries and parties to the joint defense privilege.

Defining the Relationship

A joint defense agreement that simply says parties are co-defendants and want to share information may not be enough to invoke the joint defense privilege. Some courts are skeptical of efforts to hide behind the joint defense privilege or even reluctant to extend the privilege to third parties, absent evidence that such extension is supported.

In reviewing the validity of a joint defense agreement, courts generally focus on whether the interests of the co-parties are truly aligned. For example, some high profile cases have declined to apply a joint defense agreement where parties had similar, but not identical, legal interests or where the parties’ shared interest was largely commercial in nature, not legal. Indeed, some courts have found that simply sharing a desire to win a litigation is not enough to define a joint defense (or a common interest).

By articulating the shared legal interest in writing, practitioners may be able to increase the likelihood that their clients’ shared confidences will be protected.

Potential Conflicts of Interest

It is sometimes difficult to assert that parties who have separate attorneys also share entirely identical interests. Indeed, the fact that separate counsel is involved could suggest there are some issues on which the parties’ interests do not align. When those differing interests evolve into actual differences in approach, strategy or resolution, the very predicate of the joint defense is called into question.

If unaddressed, such differences can jeopardize all parties to the joint defense agreement. Thus, one term to consider for a joint defense agreement is to address exactly what happens if one party decides to terminate it or abandon it (for example, if one of the parties to the joint defense agreement becomes adverse to another).

For the attorneys, this can include addressing any duties to nonclients who are parties to the joint defense agreement. Most joint defense agreements will specify that the joint defense relationship shall not serve as a basis to try to disqualify another counsel in the future, nor does it support an attorney-client relationship between one party and another party’s lawyer.

Common Interest Agreements

Of course, not every matter in which parties want to exchange information with each other involves litigation. To address this possibility, many courts have extended the principles of the joint defense privilege to the nonlitigation context for those parties that share common interests.

The concepts and predicates for an enforceable common interest agreement are substantially similar to those of the joint defense agreement. Because the existence of common interests is not as obvious as in the litigation context, clients and attorneys will often take special steps to document the inception, duration, scope, boundaries and termination of any common interest in an agreement. Provisions confirming the attorneys’ duties, or lack thereof, are again helpful to avoid needless future disputes including costly motions to disqualify.

Joint defense and common interest agreements can be effective tools to advance the interests of clients and reduce expense. The key is to get them right so that they do not themselves become the basis of litigation.

Shari L. Klevens is a partner at Dentons US in Atlanta and Washington and serves on the firm’s U.S. board of directors. She represents and advises lawyers and insurers on complex claims and is co-chair of Dentons’ global insurance sector team.

Alanna Clair is a partner at Dentons US in Washington and focuses on professional liability and insurance defense. Shari and Alanna are co-authors of “The Lawyer’s Handbook: Ethics Compliance and Claim Avoidance” and the upcoming 2019 edition of “Georgia Legal Malpractice Law.”