Disclosure to a Third Party of Attorney/Client Privileged Communication — A Potential Waiver

By Jeffrey P. Lewis

Two recent cases have revisited the sometimes murky issue of when disclosure of attorney/client privileged communication to a third person constitutes a waiver. The extreme examples are easy to analyze. For example, client communications with his or her lawyer in the presence of a consulting expert do not constitute a waiver, but the same conversation in the hearing of a nonparty trial witness would.

In Lynch v. Hamrick, ___So.2d___, 2007 WL 1098574 (Ala.), the Alabama Supreme Court addresses whether a trial court had abused its discretion in finding that the elderly client had waived the attorney/client privilege by conversing with her counsel in the presence of her adult daughter. In a suit against the daughter to set aside a real estate conveyance by the client to her, the daughter wanted to call the lawyer as a witness to establish the competency of her mother to have made the conveyance. But her mother and related parties all objected on the basis of the attorney/client privilege.

The court found waiver in part because the daughter’s participation was not required to assist the lawyer in preparing the deed. The mother, as found by the trial court, possessed full mental and physical capacity to speak for herself.

The absence of waiver, however, would not totally disqualify all of the lawyer’s testimony. Because the lawyer was the attesting witness to the deed, she was permitted (pursuant to an official comment to Alabama’s Rule of Evidence 502, for which Pennsylvania does not have a substantially similar provision) to “divulge information received in the attorney’s capacity as an attesting witness.” Moreover, she could also testify to any nonprivileged matters, such as her perceptions regarding her client’s “capacity to convey real estate and whether the conveyance was voluntary.”

The other recent case of interest in this area, Roush v. Seagate Technology, L.L.C., 150 Cal.App.4^th 210, 58 Cal.Rptr.3d 275 (2007), considers but does not decide whether a client waives her attorney/client privileges where she makes a confidential communication in the presence of one of the lawyer’s other clients, who has a different claim against the same corporate defendant. The issue was litigated in the context of a motion to disqualify defendant’s counsel where the lawyer’s second client had replaced him with new counsel and then settled with the defendant. An express term of that settlement agreement, however, provided that the second client agree to waive the attorney/client privilege with respect to his first lawyer and disclose any such privileged information to defendant’s counsel. The first client contended that this gave defense counsel inappropriate access to her attorney/client privileged communication made in the presence of the second client. She further contended that she and the second client “enjoyed a joint privilege that could not be waived absent consent from both of them. …” She also argued application of the “Common Interest” doctrine, also recognized under Pennsylvania law, which provides that a client does not waive the privilege where the confidential information is shared with someone who is “present to further the interest of the client in the consultation” or is “reasonably necessary for the transmission of the information or the accomplishment of the purpose for which the lawyer is consulted.” Again, confidential communication with the consulting expert presents a classic example of this doctrine’s application.

In support of the motion to disqualify, the first lawyer filed a declaration in which he stated that he had informed both clients that he characterized the representation as a “joint representation” and that “information could be shared without losing its privileged nature.” He further indicated that he had shared each client’s confidential communication separately with the other client.

But the two clients had asserted separate claims against the common defendant based upon different liability-producing conduct, one for sexual orientation discrimination and harassment and the other for retaliation under the whistleblower provision of the Sarbanes-Oxley Act. Therefore, in the defense view, such communication was not automatically subject to any joint privilege doctrine because there was no showing that the first and second clients were joint clients. Absent such status, they could not necessarily share attorney/client information without waiver. If they were joint clients, then neither client could waive the privilege unless both did.

The trial court refused to disqualify. The first client took an immediate appeal, but the appellate court affirmed. After conducting a thorough analysis of this issue, it failed to reach a conclusion because it found that the first client had failed to demonstrate that she or counsel had shared her confidential information with the second client, that they constituted joint clients or that sharing information “was reasonably necessary to her case.”

Lynch and Roush do not dictate the application of waiver under Pennsylvania law because they interpret the law of other jurisdictions. The lesson they teach, however, concerns the peril that can occur in instances where a party who is not germane to a representation in a given case becomes privy to attorney/client communications. Despite the intention of all involved to keep such communication confidential, a court could later rule that the client had waived any otherwise applicable privilege.

Jeffrey P. Lewis is a shareholder in the West Chester office of the Philadelphia-based law firm of McKissock & Hoffman P.C., with offices also in Harrisburg, Doylestown, Westmont, N.J., and Wilmington, Del. He serves on the PBA Professional Liability Committee and is a PBA Zone 9 delegate.