Aa a general rule, clients waive the attorney–client privilege when they assert an advice-of-counsel defense and, consequently, must produce their lawyer’s advice-related communications. The waiver’s scope, however, is not as well-known. Does the waiver apply to communications with outside counsel and in-house lawyers?
The Utah federal court faced this specific question and narrowly construed the scope of waiver. The court held that a client’s advice-of-counsel defense waived the privilege over its communications with outside counsel, but that the waiver did not extend to its communications with in-house counsel. Hoopes v. Owners Ins. Co., 2018 WL 1183374 (D. Utah Mar. 6, 2018). You may read the decision here.
A Geico insured struck an 11-year-old pedestrian on Main Street in Heber City, causing severe injuries to the minor. Geico paid its insurance limits, but the minor’s mother filed breach-of-contract and bad-faith claims against her uninsured-motorist carrier when it failed to promptly settle that matter.
The UIM carrier had retained outside counsel to investigate and opine on coverage and payment issues. The carrier asserted the advice-of-counsel defense and agreed that the defense waived the privilege over its communications with outside counsel. The carrier, however, refused to produce communications between its claims adjuster and in-house lawyer.
Sword and Shield
The mother moved to compel the claims-adjuster–in-house lawyer communications, essentially arguing that waiver is a broad concept and must include all advice-related communications, including those with in-house counsel.