Article Challenges Basis for Business Negotiations Exception to Subject-Matter Waiver Doctrine

Courts increasingly consider whether the subject-matter waiver doctrine applies to disclosure of privileged subject matter waivercommunications in a non-litigation setting, such as disclosures made during business negotiations.  In an influential decision in November 2012, the Illinois Supreme Court ruled that the subject-matter waiver doctrine does not apply in extrajudicial settings.  I reviewed that decision, Center Partners LTD v. Growth Head GP, LLC, in an earlier post.


Courts refusing to apply the subject-matter waiver doctrine to extrajudicial settings such as business negotiations often cite the fear of a perverse incentive: parties will forego having their lawyers at the negotiating table for fear that their inclusion will later result in wholesale disclosure of privileged information.  Indeed, the Center Partners court, citing a First Circuit decision, based its decision, in part, on this theory.


But in a recent article in the Duquesne Law Review, noted privilege expert Professor Edward J. Imwinkelried challenges this theory. He states that, “[i]n truth, that prediction is a gross exaggeration, reflecting misconceptions about both the negotiation process and privilege law.”  Professor Imwinkelried argues that the subject matter waiver doctrine will not cause parties to leave their lawyers behind when they approach the bargaining table. Rather, there is a greater risk of waiver if lawyers are absent. The article, accessible here, is Protecting the Attorney–Client Privilege in Business Negotiations: Would the Application of the Subject-Matter Waiver Doctrine Really Drive Attorneys from the Bargaining Table?, 51 Duq. L. Rev. 167 (2013).

Professor Imwinkelried posits that the risk of waiver increases if business professionals cut their lawyers from the negotiating process because the business professionals will try to explain the legal basis for a particular position.  And because the legal basis necessarily comes from communications with the company’s lawyers, the business professionals’ explaining a legal basis for a position is tantamount to disclosing privileged communications.  By contrast, when lawyers explain a legal basis for a position, that explanation derives from legal research and analysis, and not from privileged communications with the client.

Professor Imwinkelried concludes as “plainly wrong” that application of the subject-matter waiver doctrine to business negotiations will prompt clients to remove lawyers from the negotiating table.  And he argues that, if there is a subject-matter waiver rule, then it should apply to business negotiations as well as litigation.

The issue of subject-matter waiver in the extrajudicial context continues to develop.  Professor Imwinkelried’s article lends another voice to this ripening debate, and lawyers involved in a subject-matter waiver battle as in Center Partners should take notice.

My thanks to Professor Imwinkelried and the Duquesne Law Review for permission to reprint the article in this post.

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