Does the Cautionary Language on a Fax Coversheet Protect From Inadvertent Disclosure of Confidential Information?

By Jeffrey P. Lewis

Fax cover sheets sent by law firms typically contain substantially the following language: “This is a confidential facsimile within the attorney/client privilege. It is intended for review and discussion only by those who appear in the caption above or at the end as recipients of copies. It is not intended to be copied or distributed to others.”

This constitutes an attempt to avoid waiver of attorney/client privileged communication through inadvertent disclosure where the sender faxes the document to the wrong person. But does the language accomplish that purpose? After all, notwithstanding that the attorney-client privilege belongs to the client, his or her lawyer’s negligence in protecting the privilege may cause a waiver. Last year, this author wrote a column noting the nonexistence of any reported appellate decision that addresses this issue under Pennsylvania law. But in recently deciding Carbis Walker v. Hill, Barth and King, L.L.C., —- A.2d ——, 2007 WL 2080599 (Pa.Super.), 2007 PA Super 221, the Superior Court finally creates such case law.

In Carbis Walker, the sender (located in Ohio) inadvertently faxed a confidential document with a coversheet containing the language quoted above to opposing counsel in Pennsylvania. The receiving party contended that by this conduct, the sending party waived the privilege as to the document transmitted.

Before the court could address this issue, it was required to conduct a choice of laws analysis to determine whether to apply Pennsylvania or Ohio law, with the court finding that Pennsylvania law applies. The next question presented was which analysis should apply under Pennsylvania law to determine whether a waiver has occurred.

The court adopted an analysis commonly used in other jurisdictions and previously applied by a Pennsylvania district court in Fidelity & Deposit Co. v. McCulloch, 168 F.R.D. 516 (E.D.Pa. 1996). In this approach, the court considers five factors to decide whether an inadvertent disclosure constitutes a waiver: “(1) the reasonableness of the precautions taken to prevent inadvertent disclosure in view of the extent of the document production; (2) the number of inadvertent disclosures; (3) the extent of the disclosure; (4) any delay in taking measures to rectify the disclosure; and (5) whether the overriding interests of justice would or would not be served by relieving the party of its errors.”

Applying this analysis, the court affirmed the trial court’s finding that a waiver did occur, notwithstanding the cautionary language on the coversheet. Disclosure of a single document was deemed minimal, because it was only a single document and not one in the midst of several other discoverable documents produced at the same time. Notwithstanding, the court reasoned that the sending party could have taken reasonable precautions to avoid this inadvertent disclosure. The trial court found and the Superior Court agreed that the sending party has a heavier burden to avoid disclosure of privileged materials to avoid waiver when sending only a single privileged document than when sending it as part of a group of nonprivileged documents. Moreover, the court was struck with the fact that the sending party waited at least 17 days after the receiving counsel notified the sender of the inadvertent disclosure before taking steps to rectify the disclosure. The court also considered the fact that the receiving counsel had already read all of the transmitted materials before the sending party took any action to retrieve the sent materials, which in the court’s view meant that the transmission was “utterly complete.” In terms of the fifth factor (the overriding interests of justice), the Superior Court had no difficulty with the trial court returning to consideration of the previous elements to conclude that the interests of justice were served by finding waiver under these circumstances.

No one knows at the beginning of a lawsuit whose assistant will inadvertently fax a confidential document to the opposition. This becomes even more true in a joint defense context if an assistant to counsel for one of the defendants were inadvertently to fax a trial strategy report containing the collective thoughts of the defense of the various defendants to plaintiff’s counsel instead of to one of the carriers, as intended.

Now that an appellate court has spoken on Pennsylvania law under these circumstances, the moral to this story remains the same: At least in litigation, a nonwaiver agreement would protect against inadvertent disclosures. What is clear is that by itself, the standard cautionary language on the cover sheet will not protect against a finding of waiver.

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.