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Overview
• Attorney-Client Privilege Protects Confidential
Communications Between Attorneys and Clients
• Protection Over Otherwise Privileged
Communications May Be Lost If Shared With Third-
Parties
• Disclosure to Brokers and Insurers May Waive The
Protection Afforded By The Attorney Client Privilege
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The Attorney-Client Privilege
• The Attorney-Client Privilege Protects:
1. “a communication
2. made between privileged persons
3. in confidence
4. for the purpose of obtaining or providing legal assistance
for the client”
RESTATEMENT (THIRD) OF THE LAW GOVERNING
LAWYERS § 68 (2000)
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Communications With Third-Parties
• Privilege Extended Where Communication
Necessary For Effective Consultation Between
Attorney and Client
• No Privilege Extended If Business Advice, Not
Legal Advice, Sought Or If The Advice Sought
Is The Consultant’s, Not The Lawyer’s
• Communications With Third-Parties Cannot Be
Imbued with Privilege By Simply Passing It
Through Counsel
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Communications with Insurance Broker
• Courts Split as to Whether Attorney Client
Privilege May Extend to Communications
Shared with the Insured’s Broker
• Even if the Court Holds the Attorney Client
Privilege has been Waived, a Work Product
Argument May be Persuasive
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Disclosure of Confidential Information
Model Rules 1.7(a), 1.8(f), 1.6(a) and 5.4(c)
• Defense Counsel May Not Disclose the
Insured’s Confidential Information to the
Insurer Without the Insured’s Consent if Such
Disclosure will Adversely Affect the Insured
• Defense Counsel May Not Disclose the
Insured’s Confidential Information to Third-
Parties Without Insured’s Consent
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The Tripartite Relationship: Who Is The Client?
• The Policyholder is Always the Client
• Duty of Loyalty Owed Always
• Depending on the Circumstances,
the Insurer May Also be a Client and
Entitled to otherwise Confidential
Communications
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Attorney-Client Relationship Arises When:
(1) A person manifests to a lawyer the person’s
intent that the lawyer provide legal services for
the person; and either
a) The lawyer manifests to the person consent to do
so; or
b) The lawyer fails to manifest lack of consent to do
so, and the lawyer knows or reasonably should
know that the person reasonably relies on the
lawyer to provide the services . . .
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Consequences of Insurer Being Deemed a Client
• Co-Client (or Joint Client) Privilege
– Default Rule in Some Jurisdictions: Insurer Pays for Defense, Co-Client
Relationship Exists
– If Not by Default, Relationship Still May Exist – Examine Parties’ Intent
and Expectations
• Disclosure to Insurer May be Compelled
• Communications Disclosed to the Insurer are Protected from
Compelled Disclosure to Outside Third-Parties
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Consequences of Insurer Being Deemed Not To Be a Client
• Compelled Disclosure Based on Policy’s Cooperation
Clause or Other Factors
• Element of Confidentiality is Absent
• Disclosure to Non-Client Insurer May Waive Privilege
and Require Disclosure of Communications to Other
Third-Parties
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Workers’ Compensation Issues
• Insurers are Exclusively Liable for Workers’
Comp Claim
• Attorney Client Privilege Waived When
Workers’ Compensation Insurers Share
Information with Employer Insureds
Tripartite rel formed when Insurer providing or paying its Insured’s defense;
2. Special considerations concerning the A-C Priv. may be implicated
Confidential Info shared by Insured with Defense Counsel may be subject to production to Insurer in Coverage Dispute
Confidntial Info shared by Insured or Defense Counsel with Insurer may be subject to production to TP’s, such as underlying Plaintiff
Tripartite Rel. Most typically implicates Items 2 & 3; If Insurer not a Client of Defense Counsel, Then communication is not between “privileged persons” and any confidentiality attaching to the communication is destroyed.
The Nature of the Insurer’s Rel. with defense counsel determines the contours of the A-C Priv.
If Insurer also a client, then Defense Counsel also owes duty of loyalty to Insurer
Information exchanged between Insured and Defense Counsel subject to production to Insurer, but not TP’s
Tripartite Rel. Is A Nec. Evil, but try to avoid a “Three Stooges” Situation
Confidential Information that could affect coverage determination
Disclosure to Third Party Auditors
What are some indicators of A-C Rel?
Retainer Agreement
Retention by InsurerInsured
Panel Counsel or Insured’s regular outside counsel
