Everyone knows, whether from Law and Order or from popular culture in general, that words spoken to an attorney by a client are forever privileged, sacrosanct and private. As is true with many well-known facts, the true contours of the actual fact may not closely conform to the cliché. Often, widely held beliefs are simply urban legend.
The CPLR deals with attorney-client privilege in §4503:
an attorney or his or her employee, or any person who obtains without the knowledge of the client evidence of a confidential communication made between the attorney or his or her employee and the client in the course of professional employment, shall not disclose, or be allowed to disclose such communication, nor shall the client be compelled to disclose such communication, in any action, disciplinary trial or hearing, or administrative action, proceeding or hearing conducted by or on behalf of any state, municipal or local governmental agency or by the legislature or any committee or body thereof. Evidence of any such communication obtained by any such person, and evidence resulting therefrom, shall not be disclosed by any state, municipal or local governmental agency or by the legislature or any committee or body thereof. The relationship of an attorney and client shall exist between a professional service corporation organized under article fifteen of the business corporation law to practice as an attorney and counselor-at-law and the clients to whom it renders legal services.
How does this play out in real (litigation) life? There are questions of the extent of the privilege, waiver of the privilege and how putting the material “at issue” might affect the privilege.
The noble purpose of CPLR 4503 is to foster frank and protected dialogue between attorneys and clients in professional engagements, thereby ultimately promoting the administration of justice. The privilege applies to communications with attorneys relating to the attorneys’ representation (or potential representation), whether it’s the individual attorney, partners, corporate staff counsel or outside counsel. The privilege applies both to communications from clients to attorneys and from attorneys to clients.
Recognized long ago, the “attorney-client privilege rests not only upon the professional character of the employment, but also upon the confidential nature of the communication.” Bauman v. Steingester, 213 N.Y. 328, 333 (1914). New York’s protection of this privilege remains strong. “The attorney-client privilege shields from disclosure any confidential communications between an attorney and his or her client made for the purpose of obtaining or facilitating legal advice in the course of a professional relationship.” Ambac Assur. v. Countrywide Home Loans, 27 N.Y.3d 616, 623 (2016).
New York strongly upholds this privilege. “Since the reign of Elizabeth I, the law has as a matter of policy encouraged full disclosure between attorney and client. Matter of Jacqueline F., 47 N.Y.2d 215, 218 (1979). Typically the argument against the privilege is that it hides, obscures or otherwise gets in the way of determining the “truth.” Even in the face of “strong public policy considerations” favoring disclosure, it has been consistently upheld. In “matters communicated to an attorney in professional confidence” the privilege remains strong. Priest v. Hennessy, 75 A.D.2d 722, 722 (4th Dept. 1980).
The test of whether the attorney-client privilege applies to a communication from the client to attorney is whether it was for the purpose of obtaining legal advice and directed to the attorney who has been consulted for that purpose. Rossi v. Blue Cross & Blue Shield of Greater N.Y., 73 N.Y.2d 588, 593 (1989). When the communication is from an attorney to the client, it must be made for the purpose of facilitating the rendition of legal advice or services, in the course of a professional relationship. Matter of Creekmore, 1 N.Y.2d 284, 295 (1956).
What happens when there is a mix of legal and non-legal matters? So long as the communication is primarily or predominantly of a legal character, the privilege is not lost and covers the entirety of the communication. Britton v. Lorenz, 45 N.Y. 51, 57 (1871); Drennen v. Certain Underwriters at Lloyds of London, 575 B.R. 29 (S.D.N.Y. 2017) quoting Rossi v. Blue Cross. Mere review of CPLR 4503 might suggest that a communication between attorney and client is sacrosanct. However, even when the communication falls within the statute, the privilege can be lost. It can be lost by waiver, by operation of law or by the at-issue rule. The most common way to lose the privilege is by waiver.
The client may intentionally or carelessly reveal the communication or may deny that there is a claim of attorney-client privilege. It can be waived by the clients’ (perhaps unintentional) public disclosure of the statement in front of non retained attorneys. Peo. v. Mitchell, 58 N.Y.2d 368 (1982),
Waiver by Others
When two parties have a “common interest” in communications between them and counsel, either party can waive the privilege for both parties. The “common interest” doctrine generally operates to protect the privilege. “Thus, if A and B share a common interest, the disclosure by A to B of an otherwise privileged communication does not waive the privilege.” American Re-Insurance Co. v. United States Fid. & Guar. Co., 40 A.D.3d 486 (1st Dept. 2007). The “common-interest doctrine applies where multiple persons are represented by the same attorney. In that situation, communications made to the shared attorney to establish a defense strategy remain privileged as against the rest of the world. The clients may not, however, later assert the privilege against each other after their interests become adverse. North River Ins. Co. v. Phila Reins., 797 F. Supp. 363, 367 (D. N.J. 1992) The clients can, moreover, waive the privilege.
There can be inadvertent waiver. These arise in giving testimony and inadvertently uttering the communication, in the inadvertent misproduction of documents, in other missteps. Whether the privilege remains is determined by intent, need to use the communication and the manner in which the inadvertent production arose. “A client who voluntarily testifies to a privileged matter, who publicly discusses such matter or who permits his attorney to testify regarding the matter is deemed to have impliedly waived the attorney-client privilege.” Jakobleff v. Cerrato, Sweeney & Cohn, 97 A.D.3d 834 (2d Dept. 1983).
However, the policy remains that “the fact that information is publicly available does not necessarily make it admissible in evidence. Moreover, although confidentiality can never be restored to a document already disclosed, a court can repair much of the damages done by disclosure by preventing or restricting use of the document at trial.” Manufacturers & Traders Trust Co., v. Servotronics, 132 A.D.2d 392, 398 (4th Dept. 1987).
Assertion of an insanity defense immediately waives all patient-psychiatrist privilege and often associated attorney-client privilege on the insanity issue. Peo. v. Edney, 39 N.Y.2d 620, 626 (1976).
Legal Malpractice and the ‘At Issue’ Doctrine
The attorney-client privilege is treated differently in a legal malpractice setting. The first and most obvious difference is that the client-defendant privilege is immediately waived when the client sues his attorney. The reason for this is that the client-defendant communications are “at issue.” By bringing the action against former attorneys for legal malpractice all of their communications are now at issue.
Beyond the client-attorney communications, clients often communicate with other attorneys. Sometimes, the client seeks later advice on how to deal with the defendant, or earlier advice on how to deal with the situation. These communications with other attorneys may become “at issue.” If the client places the subject matter of the privileged communication in issue, or where invasion of the privilege is required to determine the validity of the client’s claim or defense and application of the privilege would deprive the adversary of vital information, the privilege will be lost. Jakobleff, 97 A.D.3d 834 (2d Dept. 1983). Defendants routinely allege that any client-attorney communications are “at issue.”
“A waiver of the attorney-client privilege may be found where the client places the subject matter of the privileged communication in issue or where the invasion of the privilege is required to determine the validity of the client’s claim or defense and application of the privilege would deprive the adversary of vital information.” Sousis v. Lazer, Aptheker, Rosella & Yedid, P.C., 91 A.D.3d 753, 754 (2d Dept. 2012). At-issue waiver occurs where the party affirmatively places the subject matter of its own privileged communications at issue. Deutsch Bank Trust Co. of Ams. v. Tri-Link Inv. Trust, 43 A.D.3d 56, 63 (1st Dept. 2007)
Several types of conduct might place communications at issue. One is the “advice of counsel” defense. Connell v. Bernstein Maculay, 407 F. Supp. 420 (S.D.N.Y. 1976); Village Bd. of Vil. of Pleasantville v. Rattner, 130 A.D.2d 654 (2d Dept. 1987). In an “advice of counsel” defense the party asserting the privilege defends the case by saying, in essence, “My attorney told me to do this, and I did it, and did nothing wrong because I followed my attorney’s advice.” There is no protection of the advice used by the client as a “shield.”
Another situation is where the client asserts that it took certain affirmative action on the advice of its attorneys, and that advice was negligent. These communications will also be “at issue” in the legal malpractice case when the client uses them as a sword against the attorney-defendant.
The uniting theme is whether a party affirmatively places the subject matter of its own privileged communications at issue in litigation, so that the invasion of the privilege is required (and is fair) to determine the validity of a claim or a defense of the party asserting the privilege. Credit Suisse First Boston v. Utrecht-America Fin. Co., 27 A.D.3d 253 (1st Dept. 2006). Whether the communication contains information relevant to the issues being litigated is not the end of the inquiry. If it were, “the privilege would have little effect. Deutsch Bank Trust Co., 43 A.D.3d 56 (1st Dept. 2007).
“All of these established exceptions to the rules of privilege have a common denominator.” IMO Industries v. Anderson Kill & Olick P.C., 192 Misc.2d 605 (Sup. Ct. N.Y. 2002). In each instance the party asserting the claim placed information normally protected at issue through some affirmative act for his own benefit. To allow the protection of such information would be manifestly unfair to the opposing party. Information may be incidental or may be integral to the case. When it is integral, the privilege is waived. Id.
Put another way, the test is whether a party affirmatively places the subject matter of its own privileged communication at issue in litigation by “asserting a claim or defense which it intends to prove by use of the privileged materials.” North River Ins. Co. v. Columbia Cas. Co., 1995 U.S. Dist. LEXIS 17 (S.D.N.Y. 1995). There is no “at issue” waiver where the party asserting privilege does “not need the privileged documents to sustain its cause of action. Manufacturers & Traders Trust Co., 132 A.D.2d 392, 398 (4th Dept. 1987).
As an example, in Deutsch Bank Trust Co., 43 A.D.3d 56 (1st Dept. 2007), client decided to settle the underlying case where it was defendant. Agents for a group of lenders objected to a bankruptcy sale and were sued for that decision. Settlement was followed by an indemnification suit. At issue were the communications with attorneys concerning the reasonableness of the settlement and the amounts of attorney fees. In Deutsch, while the reasonableness of the settlement was at issue, the attorney communications were not. The reason given was that plaintiff had not “premised its claims for indemnity on the legal advice it received in the litigation, nor had it made any self-serving, selective disclosure of any protected material.” Deutsch, 43 A.D.3d 56 (1st Dept. 2007). Lastly, plaintiff was able to demonstrate its cause of action through non-privileged materials.
In client-attorney settings, many but not all communications are privileged and will withstand demands for disclosure. The privilege can be lost, intentionally or inadvertently. In legal malpractice settings, the privilege is much harder to retain. Many attorney-client communications become “at issue” because of the nature of the legal malpractice dispute.
Andrew Lavoott Bluestone is an attorney located in Manhattan specializing in legal malpractice litigation, as well as an adjunct law professor and the author of the New York Attorney Malpractice Blog, at blog.bluestonelawfirm.com