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Joint defense agreements: the benefits and the risks

Joint defense agreements: the benefits and the risks

By Gabriel McIntosh

Joint defense agreements have been around for a long time, and with them come both advantages and disadvantages. In a Sound Advice podcast from the American Bar Association Section of Litigation, Lee Ziffer of Kuchler Polk Schell Weiner & Richeson LLC explains the purpose of a joint defense agreement and offers guidelines for using the agreements wisely.

At its core, a joint defense agreement is an agreement among attorneys for different defendants in a case who agree to share confidential information that would otherwise be protected by the attorney-client privilege to further a common defense goal, Ziffer said. These agreements have many benefits.

“They allow defendants to share information with other defense counsel without relative fear of waiving work product or attorney-client privileges,” he said. “They allow development of a unified defense strategy to defend a claim and to avoid duplicative work. It allows defendants to divide the issues and conquer. One defendant can handle expert issues; another defendant can handle discovery issues, motions in limine and so forth.”

While the benefits of working with co-defense counsel on a common defense goal are fairly clear, often many attorneys overlook some of the dangers associated with sharing confidential information with attorneys representing other parties, Ziffer said.

Any time you’re thinking about entering into a joint defense agreement, there should be two questions that should frame your thinking about whether to enter into such an agreement, he said. “First, how does this affect me as the attorney, and second, how does this affect my client?” Ziffer asked. “In order to answer these questions, the attorney needs to have a proper understanding of why we enter into joint defense agreements in the first place.”

A joint defense agreement is really just a written recognition of the joint defense privilege, which is recognized as common law in most jurisdictions, Ziffer said. “The privilege itself doesn’t require a written agreement to apply, but, as with most implied agreements among attorneys or their clients, there are many reasons to make sure the parties define the scope of their agreement to share information in writing before proceeding,” he said.

Black’s Law Dictionary defines the joint defense privilege as the rule that a defendant can assert the attorney-client privilege to protect confidential communication made to a co-defendant lawyer if the communication was related to the defense of both defendants, Ziffer said. There are a couple levels to this definition, he said.

“First, the privilege keeps confidential information confidential when shared with co-defense counsel. That’s good, but here’s the caveat: The information is only kept confidential if the communication is related to the defense of both defendants,” Ziffer said. “Without a clearly defined scope, whether a particular communication is related to the defense of both defendants can be ambiguous. So with this framing in mind, the benefits of a written agreement to define this scope is clear. The joint defense agreement is a useful tool to make sure that everybody is on the same page as to the goal of the joint defense and the information that can be exchanged in furtherance of that joint defense before proceeding. In essence, it’s best to look at the agreement as simply a definition of the parameters of the joint defense privilege.”

As attorneys, there are a couple of pitfalls you should be aware of, Ziffer said. First, a joint defense agreement may create an implicit attorney-client relationship among your co-defendants. This implied relationship isn’t fully defined in most jurisdictions and differs among the jurisdictions. However, the relationship at least includes a duty of confidentiality owed to these co-defendants and a duty to avoid and disclose conflicts or potential conflicts to the defense group either before entering into the agreement or during the pendency of the agreement, he said.

“It’s important to frame the agreement carefully to define the scope of the joint defense to be only as broad as necessary,” Ziffer said. “Basically, you don’t want other defendants disclosing information that you treated as confidential, and you don’t want other defendants accusing you of using confidential information when you thought this information was not related to the defense or this information was not disclosed in confidence. So if properly framed, the joint defense agreement can make sure everyone is on the same page about the nature of the relationship among defense counsel upfront.”

In addition to the implied attorney-client relationship, the joint defense privilege creates some fiduciary relationship as to the co-defendants, Ziffer said. “This fiduciary relationship generally requires that an attorney not use the information obtained in the joint defense meetings against the other defendants,” he said. “If conflicts arise, an attorney can be disqualified for the conflicts. So, disclosing all pertinent potential conflicts and approved uses of the information upfront in the written agreement can discharge this fiduciary duty and make sure everyone is on the same page.”

For attorneys, signing a joint defense agreement, just like any contract, binds the signing attorney to the terms of the contract, Ziffer said. “So when you sign the joint defense agreement, you are bound by its terms, personally, to the extent the agreement is lawful,” he said. “If you violate the terms of this agreement, you can be held liable for breach of contract. It’s possible that if inartfully drafted, joint defense agreements and the contractual requirements that are placed upon the attorneys as parties to the agreement can conflict with the duty of loyalty that is owed to your individual client.”

Your client’s main concern should be making sure that the confidential information disclosed to defendants in the joint defense group stays confidential, Ziffer said. “This is important to understand when disclosing information subject to the joint defense privilege because the joint defense privilege is not nearly as broad as the attorney-client privilege in the way that we normally think of it,” he said. “It’s much more easily waived, and as your client’s attorney, you don’t have nearly as much control over the flow of information once it’s disclosed to the defense group. So before entering into an agreement, you should carefully analyze the case and understand all the theories of liability against your co-defendants as well as their available defenses.

“If there is a reasonable probability that one of the party’s interests may diverge from your own, you should seriously consider not entering into the agreement or at the very least limiting the scope of the agreement to a specific issue or goal where you know your interests will be aligned.”

Because you’ve entered into a joint defense agreement, this doesn’t mean that all confidential information you share is protected, Ziffer said. The protection only extends as far as is necessary to further the joint defense goal. “Now this problem underscores the basic purpose of the written agreement, which is to clearly define the scope and goal of the joint defense efforts,” he said. “Once you clearly define the goal, only disclose the information that is necessary to further that goal and nothing more. Before sharing any information, make sure that that written agreement is in place and signed by all defense counsel and parties to the agreement. Finally, as with any decision that affects your client, you should fully disclose to your clients the benefits and risks of entering into this agreement and obtain their informed consent before proceeding.”

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