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June 01, 2018 Scruples

Invoking and Waiving the Common Interest Privilege

This extension of attorney-client privilege allows confidential communication between a group of lawyers and clients with a common interest in a legal matter.

Michael Downey | The author is a legal ethics lawyer and founder of Downey Law Group LLC, St. Louis.

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Do you know much about the joint prosecution and joint defense privileges?” Paradox asked Ethox.

“A bit,” Ethox assured Paradox. “What seems to be your problem?”

“Our client ACME has identified a potential defect with its rocket sleds,” Paradox said. “It concerns how the axles connect to the sled. ACME would like to share this information with the axle manufacturer but is worried that a plaintiff in a future lawsuit may obtain the communications. Senior Partner suggested that I speak with you and see if I might be able to protect the communications under the joint defense privilege.”

“You are raising a good question,” Ethox responded. “One that might not have an easy answer. The key to understanding the ‘joint prosecution privilege’ (for plaintiffs) or ‘joint defense privilege’ (for defendants)—or what is also sometimes and better described as the ‘common interest privilege’ since most jurisdictions allow it to apply even outside the litigation context—is to recognize that this privilege is really just an extension of the attorney-client privilege. It allows communications to remain privileged when shared among persons and their lawyers, as long as each person present shares a ‘common interest.’

“Sometimes,” Ethox resumed, “it is easiest to think about the ‘common interest privilege’ by considering three evolutions of the attorney-client relationship. The first evolution is very simple. One client engages one lawyer. As you know, the attorney-client privilege then protects confidential consultations between the lawyer and client regarding the representation. The presence of a third party may waive the privilege, if that third party is not reasonably necessary to the lawyer and client’s communications.

“In the second evolution,” Ethox continued, “two clients engage one lawyer to handle a joint representation. This is a ‘joint representation.’ Both clients may be present for confidential legal consultations with that lawyer regarding the joint matter, without waiving the privilege.

“But what if the two clients decide to hire two separate attorneys to handle the joint representation, instead of sharing a lawyer?” Ethox mused. “This is the third evolution, where the common-interest privilege applies.

“Despite hiring separate lawyers, the two clients still have a ‘common interest’ in what in the second evolution was recognized as a ‘joint representation,’” Ethox explained. “Courts therefore allow confidential communications about the legal matter between the two clients and their counsel to remain privileged, as long as the communications relate to the ‘joint’ or ‘common interest.’ The second client is treated as part of the privileged relationship, not as an outsider whose presence waives the attorney-client privilege.”

“That makes sense,” Paradox responded. “So the term ‘common interest’ is really a shorthand referring to a legal matter that could be subject to a joint representation, if the two clients had decided to share an attorney.”

“Precisely,” Ethox encouraged Paradox. “Realize it is possible for two clients to have a ‘common’ or ‘joint’ interest in some issues, and differing interests in other aspects. In a corporate transaction, for example, the buyer and seller of the company are adverse parties. But they may also share a common interest—for example, in trying to obtain regulatory approval of the transaction.”

“Wait,” Paradox interrupted. “Couldn’t one party to a joint representation simply disclose the other’s confidences to the adverse party?”

“No,” Ethox responded. “All parties to the common-interest arrangement must agree to waive the common-interest privilege for an intentional waiver to be effective.”

“That sounds great.” Paradox smiled. “Do we need some type of agreement?”

“No,” Ethox answered, “you do not need a joint-defense or common-interest agreement for the privilege to apply. The privilege will attach without the agreement. But you may want an agreement to memorialize and evidence the arrangement—and to deal with contingencies, in case problems with the relationship arise later.”

Michael Downey

The author is a legal ethics lawyer and founder of Downey Law Group LLC, St. Louis.