Privileges, Clawbacks, and Inadvertent Disclosures–Is Technology the Solution?

E-discovery requirements raise at least two significant concerns for in-house counsel: (1) controlling costs associated with collection and production; and (2) inadvertently producing privileged information.   And these two concerns force in-housecatch22 lawyers into a Catch-22 situation: a complete pre-production privilege review constitutes a significant cost item; yet, producing documents with limited to no pre-production privilege review risks inadvertent disclosures and privilege waiver, which could result in adverse ethical and legal-strategy consequences.

In my article, Privileges, Clawbacks, and Inadvertent Disclosures–Is Technology the Solution?, published in the January 2013 issue of The Corporate Counselor, I argue that Federal Rule of Evidence 502 and clawback agreements have proved inadequate to control costs and reduce privilege waiver risks.  Instead, in-house lawyers should consider technology assisted review (TAR) software as a tool for handling these competing concerns.  TAR software, also known as computer assisted review or predictive coding, uses sophisticated algorithms to review electronically stored information and return only highly relevant documents.  Use of the TAR software was recently approved by Magistrate Judge Andrew Peck in Da Silva Moore v. Publicis Groupe, 2012 WL 607412 (S.D.N.Y. Feb. 24, 2012), and this decision will likely persuade other courts to approve its use in e-discovery processes.

The article discusses FRE 502, clawback agreements, courts’ treatment of inadvertent disclosures, and how TAR software provides an alternative, and better, solution.  You may access the article at this link.  Thanks to ALM and The Corporate Counselor for permitting use of the article in this blog post.

Informative Article Analyzes Trustee’s Attorney-Client Privilege

Jurisdictions diverge on whether and to what extent the attorney-client privilege protects from compelled disclosure a trustee’s communications with an attorney.  With this uncertainty, it is imperative that attorneys representing trustees know whether their jurisdiction recognizes a privilege for attorney-trustee communications, the extent of any privilege, and emerging trends in this area.

A recent article authored by Molly S. Magee and published in the Arkansas Law Review provides a thorough overview of the attorney-client privilege as applied to attorney-trustee relationships.  See Molly S. Magee, Who is the Client? Who Has the Privilege?: The Attorney Client Privilege in Trust Relationships in Arkansas, 65 Ark. L. Rev. 637 (2012).  You may access the article here.

Ms. Magee concludes by offering an approach for Arkansas, but first outlines and explains the three primary approaches that state courts apply when ruling on themagee discoverability of attorney-trustee communications.  The majority approach holds that the trust’s beneficiaries, not the trustee, are the client and, consequently, the attorney-client privilege does not protect a trustee’s communications with an attorney.  This approach, known as the fiduciary-duty exception to the attorney-client privilege, was first adopted by the Delaware Chancery Court in Riggs Nat’l Bank v. Zimmer, 355 A.2d 709 (Del. Ch. 1976).

The second, and minority, approach provides that the attorney’s client is the trustee, not the beneficiaries.  In jurisdictions following this approach, the attorney-client privilege protects attorney-trustee communications from discovery by the beneficiaries.

The third approach, which Ms. Magee identifies as the intermediate approach, distinguishes between attorney-trustee communications during litigation and communications made during day-to-day trust administration.  Under this approach, the privilege applies to communications made during litigation, but not during normal administration of the trust.

Ms. Magee’s article provides excellent and thorough information about the three divergent approaches for applying the attorney-client privilege to attorney-trustee communications.  It is well worth the read.  My thanks to the Arkansas Law Review Editorial Board for granting permission to allow access to Ms. Magee’s article in this post.

Silence! Article Discusses Prohibition of (Privilege) Objections at Nonparty Witness Depositions 1

In February 2010, a New York appellate court issued an alarming ruling that “counsel for a nonparty witness does not have a right to object during or otherwise participate in a pretrial deposition.” Thompson v. Mather, 894 N.Y.S.2d 671 (App. Div. 2010).  In this medical malpractice case, the court prevented counsel for nonparty physicians from asserting objections during their pretrial depositions.

In a recent article, noted evidence and civil procedure author David Paul Horowitz explains that, while recent New York decisions somewhat erode the Thompson decision, caution is in order.  See Not Sure if I can Say Something, 85 N.Y. St. Bar J. at 22 (Jan. 2013).Be Quiet  The article, available here, reviews recent decisions that, despite Thompson, (1) permit attorneys representing a party and the nonparty deponent to interpose objections; (2) allow attorneys to interpose objections, including privilege objections, where the nonparty deponent is a party’s agent; (3) prohibit nonparty reporter’s deposition because Thompson prevents her counsel from asserting the journalist privilege; and (4) authorize the nonparty deponent’s counsel to object to disclosure of confidential, trade-secret information.

Mr. Horowitz advises that “practitioners representing non-party witnesses should check for new decisions before representing their clients at depositions.”  And while Thompson interprets a New York civil procedure rule on pretrial depositions, attorneys in other states should take notice.  Several states permit pretrial evidentiary depositions for some individuals, such as doctors and accountants, in lieu of personal trial attendance.  And when these nonparty deponents bring counsel with them, a court’s adoption of the Thompson decision could prove fatal to privilege objections before they are ever asserted.  Lawyers should certainly “check for new decisions” before representing nonparty witnesses at depositions, but they should first check out Mr. Horowitz’s article.

Thanks to Mr. Horowitz and the New York State Bar Association Journal for permission to republish the article in this post.