The attorney-client privilege is the most preserved and perhaps revered doctrine from ancient common law. However, that privilege may be knowingly and voluntarily waived. It can also be waived by action inconsistent with the holding of that privilege — such as by disclosure or litigation — whereby the court will not allow the privilege to be used as both a shield and a sword.

The Privilege

In Gillard v. AIG Insurance, 15 A.3d 44 (Pa. 2011), the attorney-client privilege was determined to operate in a two-way fashion to protect confidential client-to-attorney or attorney-to-client communications made for the purpose of obtaining or providing professional legal advice.

After an overview of each side and its amici’s arguments, the Supreme Court first determined that interlocutory appeal regarding the issue of attorney-client privilege is appropriate in the state even though expressly disallowed in federal court. The court also reversed the trial court’s discovery order compelling production of the insurer’s attorney’s underlying client file in this bad-faith matter arising out of an uninsured motorist claim, rejecting the plaintiff’s contention that the privilege applies only to communications emanating from client to counsel.

Legal Malpractice

Generally, a client waives the attorney-client privilege by filing a legal malpractice claim.

In O’Kinsky v. Perrone, Civ.A.No. 10-6075 (E.D.Pa. October 11, 2012), the U.S. District Court for the Eastern District of Pennsylvania analyzed whether the plaintiff in a legal malpractice action may assert the privilege during deposition in response to questions regarding the content of communications the plaintiff had with nondefendant counsel. While perhaps relevant as to the plaintiff’s knowledge or state of mind, the court held the disclosure is privileged even if “vital, highly probative, directly relevant or even go[ing] to the heart [of the] issue.”


While holding the privilege not waived by filing the legal malpractice action as to the nondefendant former counsel, the Gillard court further analyzed whether the former counsel’s opinion was waived when it was transmitted prior to litigation and during the course of the business transaction.

While holding that an email containing the underlying opinion constituted a waiver of the privilege, the court refused to impose a full waiver as to all communications between the plaintiff and former counsel. In adjudicating the fairness doctrine (preventing prejudice to a party and distortion of the judicial process that may be caused by the privilege-holder’s selective disclosure during litigation of otherwise privileged information), the court held that doctrine does not apply to the attorney-client privilege regarding all communications with prior counsel, as the email occurred prelitigation and not “in the course of a judicial proceeding, [where] the plaintiff deliberately injected in the case the advice he received from his attorney.”

Gillard cited In re Chevron, 650 F.3d 276 (C.A.3 2011) where a distinction was determined between the disclosure of an attorney-client privilege communication to a third party and the use of that communication in litigation.

Wrongful Use of Civil Proceedings (Dragonetti)

The privilege is waived for any relevant communication that the client asserts as a material issue in a proceeding that “the client acted upon the advice of a lawyer or that the advice was otherwise relevant to the legal significance of the client’s conduct.” See Segal v. Strausser Enterprises, 2011 WL 721902 (E.D.Pa.). When a party asserts an advice of counsel defense (such as is available in defending against a Dragonetti claim), that party waives the privilege “with respect to ‘all communication to and from counsel concerning the transaction for which counsel’s advice was sought.’” The waiver regards only the subject of the advice upon which the party intends to rely as a defense.

Mere denial of an averment within a pleading does not place the communication at issue so as to constitute waiver.

Case Illustration

In Koen Book Distributors v. Powell Trachtman, Civ.A.No. 02-971 (E.D.Pa. December 13, 2002), the Eastern District analyzed the scope of the attorney-client privilege within a legal malpractice action.

The plaintiff — a wholesaler and distributor of books — retained the defendant law firm for advice concerning a security interest from one of its customers. After that customer filed for bankruptcy, the law firm continued to represent the plaintiff as creditors in the bankruptcy proceeding. Ultimately, Koen Book Distributors became dissatisfied with Powell Trachtman Logan Carrle, informing the firm that it was considering a malpractice action against it. Nonetheless, the plaintiff continued to retain the claimed malpracticing law firm during the period in which it was consulting with other counsel concerning the quality of the defendant’s representation.

In that approximately one-month period (when Koen was consulting with other counsel but still retaining Powell Trachtman), the defendant was likewise consulting with in-house ethics and malpractice counsel regarding the plaintiff’s anticipated malpractice action. As a result, various internal documents were generated, which became the subject of the plaintiff’s ultimate motion to compel.

The firm argued that it was in an impossible position “and should not have to forego the benefit of the attorney-client privilege or the work-product doctrine” during the period. The court reasoned that the subject documents would have been protected from discovery by the attorney-client privilege or the work-product doctrine if a third party sought access.

However, applying Rule of Professional Conduct 1.7 (conflicts of interest), the court, following in camera review, found the documents as essentially communications from one lawyer to another lawyer within the firm, “concerning how to continue to represent the clients and to respond to the clients’ communications” to best position the firm in light of a possible malpractice action. As these communications clearly establish that the law firm was in a conflict of interest relationship with its client, the attorney-client privilege and work-product doctrine were vitiated.

Reflectively, we are taught to object and, in fact, instruct our client not to answer (or otherwise create a privilege log) at the mere insinuation of attorney-client communications being uttered in an adversarial proceeding. This law-school-borne approach to the attorney-client privilege is inappropriate, especially when the communication at issue is both discovery-relevant, litigation-implicated, and between instantly adverse parties.

In my experience, if properly analyzed, there is almost no place for attorney-client privilege in an attorney liability setting concerning inter and intracommunications — with the only exception being communications following representation with new (unrelated) counsel.

So evident is the counterintuitive inapplicability of a broad-based claim of privilege, my experience is that entire files (including communications, internal memoranda and other mental thoughts or impressions) are routinely exchanged in discovery merely upon request if parties are represented by experienced attorney liability counsel (who are, thus, aware of the limited scope of the privilege within such action).

To that end and full discovery, the inadvertent disclosure (as eliminating the privilege) needs to be revisited so as to have it stricken (i.e., inadvertent disclosure should never cause a waiver). If stricken, there would be no fear of inadvertent disclosure and the limited application of the privilege within an attorney liability matter would foster using an open exchange of underlying communications. •

Matthew Weisberg is the managing partner of Weisberg Law. He focuses the firm’s practice on consumer and individual rights throughout Pennsylvania and New Jersey. Weisberg Law represents victims of legal malpractice and other professional negligence resulting in financial injury, fraud, civil rights violations, consumer abuse and foreclosure actions.