A recent master’s opinion in the Delaware Court of Chancery may expand the scope of a waiver of the attorney-client privilege. While not without precedent, the ruling may come as a surprise to some. It warrants caution by all who consider waiving a privileged communication.
Mennen v. Wilmington Trust, Del. Ch. C.A. 8432-ML (September 18, 2013), involved an unusual situation. The defendant, Wilmington Trust, was accused of mismanaging the investments of a large trust. One of Wilmington Trust’s defenses was that it was required to follow the investment decisions of an individual co-trustee and the co-trustee was responsible for the allegedly poor investment decisions. That issue turned on the meaning of the so-called “powers and responsibilities” clause of the trust instrument that dealt with the respective roles of Wilmington Trust and the individual co-trustee. Wilmington Trust argued that the trust gave it immunity when it acted on the advice of counsel that the meaning of the powers and responsibilities clause required Wilmington Trust to do what the co-trustee directed. Hence, advice of counsel was central to Wilmington Trust’s defense.
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