The sanctity of attorney-client communications and attorney work-product is a bedrock principle of our legal system. It exists to encourage clients to be candid and truthful with their attorneys, so that the attorneys are empowered to provide the best advice and most effective representation. However, in our era of communication overload and big eDiscovery—which shows no signs of slowing—preserving the attorney-client privilege and work-product protection during discovery is often a huge burden. Reviewing responsive information for privilege is tedious and expensive work, and vulnerable to human error. A simple mis-click that results in coding error (not caught in quality checks), can have significant negative consequences. A party’s production of a privileged document can result in an expensive fight over waiver. Unless the attorney-client privilege is declared a casualty of the end of privacy (or of sheer expense), attorneys should routinely consider whether a tailored order regarding waiver is appropriate for a given case.
Prior to 2006, there was a real risk that the disclosure of privileged information would result the waiver of that privilege, regardless of how extensive the efforts a party had made to keep it confidential or how big the error that resulted in the disclosure. In 2006, Federal Rule of Evidence 502(b) was amended to include a three-pronged safe-harbor that protects a party’s privilege where the party (1) inadvertently discloses privileged information, (2) takes reasonable steps to prevent the disclosure, and (3) takes reasonable steps to rectify the error. While this rule change reduce the likelihood that an expansive waiver will result if a single document is miscoded, the rule has also created new opportunities for litigation over “inadvertence,” and “reasonable steps.” Invoking the safe-harbor can be expensive on account of all of the fact-finding required to meet the criteria. Accordingly, attorneys and their clients should consider whether different parameters are appropriate for a given case.
Orders that override the safe-harbor requirements in Fed. R. Evid. 502(b) are increasingly common. Attorneys and their clients may consider seeking an agreed order that provides that no disclosure of privileged information will result in waiver. Alternatively, parties may seek an agreed order provides that that any disclosure is ipso facto inadvertent, and/or that the steps being taken to attempt prevent the disclosure of privileged information are ipso facto reasonable. These types of orders are often referred to as “FRE 502(d) Orders” since they are expressly authorized by Federal Rule of Evidence 502(d).
These 502(d) Orders provide enhanced predictability, reduce the risk of a privilege waiver, and reduce the risk of an expensive fight about waiver. The Federal Rules of Evidence Advisory Committee contemplated that parties may enter into such orders, explaining in the Notes to Fed. R. Evid. 502 that, “a court order may provide for return of documents without waiver irrespective of the care taken by the disclosing party; the rule contemplates enforcement of “clawback” and “quick peek” arrangements.”
Nonetheless, attorneys and clients should exercise caution because protecting truly sensitive privileged communications remains important. While a broad FRE 502(d) Order may protect your client from waiver (and you from malpractice), information once learned by your adversary cannot be unlearned. In addition, if parties expect that the scope of the privilege will be contested, such an order may not be appropriate. For example, if a fact witness is also an attorney and not all communications fall within the privilege, parties may want to attach consequences to disclosure so that the party asserting the privilege is incentivized to define the scope it is asserting at the earliest point possible.
I have been on both sides of an inadvertent disclosure of privileged information. On the receiving end, I was given a report prepared by a consulting expert hired by my adversary that thoroughly analyzed the strengths and weaknesses of my adversary’s primary defense. It was not labeled confidential or privileged. I read it, in its entirety. After the fact, I deduced what I had read. Although I advised opposing counsel and destroyed the memo, the knowledge I gained could not be similarly returned. I suspect that the disclosure of this memo caused a great chasm between the client and its lawyers. I believe that the disclosure of this memo changed the course of the litigation and led to a favorable settlement for my client. The accidental disclosure of this memo did not result in a privilege waiver, but its harm was significant. Further, while the scope of the harm in this case was limited to that single dispute, the potential harm is significantly increased for parties that face repeated lawsuits with the same parties or opposing counsel, where the knowledge gained as a result of one error in one case can be a road map for the next case.
On the producing end, I was privy to a situation where a team produced a series of emails an attorney had sent to his client from his personal email account on his mobile device. Upon discovery, the producing party was able to clawback these documents and the privilege remained intact. It was clear to all parties that both the attorney’s use of the personal email account and the production were inadvertent. Fortunately, also, there was little substantive discussion in these emails, so no important strategy was revealed to the other party. However, it was an anxiety-producing experience and a reminder of all the risks.
In our era of communication overload and big data, there risk of disclosing privileged information in litigation is high. A tailored FRE 502(d) Order can attempt to mitigate some of the risk and reduce costs. Nonetheless, even the most finely tuned order cannot protect a party from the harm caused by disclosing legal strategy. Even when a 502(d) order is in place, it is no substitute for using humans and technology to keep confidential legal strategy and advice a secret.