Work-product and Attorney-client Privileges in Colorado
| Publication year | 1987 |
| Pages | 15 |
1987, January, Pg. 15. Work-Product and Attorney-Client Privileges in Colorado
Dwight L. Pringle, Denver, is an associate of the firm of Semple & Jackson.
In the recent decisions of the National Farmers Union Property and Casualty Co. v. District Court(fn1) and Western National Bank of Denver v. Employers Insurance of Wausau,(fn2) Colorado courts took a restrictive view of the privileges traditionally asserted to shield insurance claims and investigation files from discovery. Both the work-product doctrine and the attorney-client privilege have been narrowly construed so as to permit discovery of an insurance company's files in all but the most limited circumstances.
This article discusses the work-product doctrine, with particular emphasis on the problem of determining whether a document was prepared "in anticipation of litigation," and is thus protected from discovery. It then analyzes recent Colorado case law applying the doctrine to insurance claims and investigation files and compares the work-product doctrine to the attorney-client privilege.
Insurance companies and counsel wishing to preserve the confidentiality of investigation files should be cognizant of the increasingly restrictive interpretation by the courts of the work-product and attorney-client privileges and should structure their investigations accordingly. They must be prepared to make the strict showings required by the courts when a claim of privilege is asserted. Moreover, insurance claims file discovery cases may have broader significance in that they appear to reflect a strong judicial bias in favor of liberal discovery generally.
The work-product doctrine was officially recognized by the U.S. Supreme Court in Hickman v. Taylor,(fn3) a case arising out of the drowning death of five sailors when a tug capsized. The plaintiff served on defendants an interrogatory inquiring as to the existence and content of any witness statements. Defendants objected on the ground that the interrogatory called for privileged matter obtained in preparation of litigation.(fn4) The federal district court upheld the objection,(fn5) but the Third Circuit Court of Appeals reversed.(fn6) On certiorari, the U.S. Supreme Court affirmed, noting that "[e]xamination into a person's files and records including those resulting from the professional activities of an attorney must be judged with care."(fn7) The court concluded that the plaintiff should not have been allowed to discover the statements because she had made no showing of necessity for the discovery:
However, the Court stopped short of laying down any absolute rule of nondiscoverability of trial preparation materialsHere is simply an attempt, without purported necessity or justification, to secure written statements, private memoranda and personal recollections prepared or formed by an adverse party's counsel in the course of his legal duties. As such, it falls outside the arena of discovery and contravenes the public policy underlying the orderly prosecution and defense of legal claims.(fn8)
We do not mean to say that all written materials obtained or prepared by an adversary's counsel with an eye toward litigations are necessarily free from discovery in all cases. Where relevant and non-privileged facts remain hidden in an attorney's file and where production of those facts is essential to the preparation of one's case, discovery may properly be had.(fn9)
The Court's holding recognizing a qualified work product immunity in Hickman subsequently was codified as Federal Rule of Civil Procedure ("F.R.C.P.") Rule 26(b)(3) in 1970 in an effort to harmonize into a single rule the varying standards regulating the scope of pre-trial discovery.(fn10) Colorado Rules of Civil Procedure ("C.R.C.P.") Rule 26(b)(3) follows its federal counterpart.
C.R.C.P. Rule 26(b)(3) provides a qualified privilege for the work product, not only of attorneys, but that prepared or
obtained by other representatives as well, including a party's ". . . consultant, surety, indemnitor, insurer, or agent. . . ."
The work-product rule applies on its face to "documents and tangible things." Thus, the privilege does not bar inquiry into an attorney's or other representative's knowledge of the existence of documents(fn11) nor does the recitation of facts to an attorney or representative render those facts privileged as work product.(fn12) Furthermore, some courts have held that documents obtained or compiled by an attorney in preparation for litigation do not necessarily constitute work product unless it is shown that the compilation reflects the use of the attorney's professional judgment.(fn13)
Thus, it has been held that documents not otherwise subject to work-product protection are nonetheless immune from discovery if the selection and arrangement of those documents reflect the compiling attorney's or representative's thought processes and conclusions as to their legal significance.(fn14) While the rule applies only to documents and things, clearly not all documents and things compiled in anticipation of litigation are protected by the rule.
Work-product immunity is subject to waiver in a number of ways. The most significant manner in which it may be waived is by voluntary disclosure to third parties, such as governmental agencies.(fn15) While disclosure to co-parties in litigation does not constitute a waiver,(fn16) disclosure to adversaries does.(fn17) Also, waiver may occur by disclosure of work product to a party's own expert.(fn18) Work-product protection is also waived if "the work was performed in furtherance of a crime, fraud, or other type of misconduct fundamentally inconsistent with the basic premises of the adversary system."(fn19) Moreover, one court has held that the work-product privilege is waived if it is asserted in "bad faith."(fn20)
The courts are split on whether materials obtained or produced in anticipation of other litigation fall within the rule. Three distinct approaches can be identified. Some courts have adopted the view that the rationale behind the rule---protection of the integrity of the adversary process---requires that the work-product privilege apply to materials prepared in anticipation of other litigation.(fn21) Taking a middle ground, some courts have held that the privilege applies only where the previous litigation for which the materials were prepared was related to the litigation in which they were sought.(fn22) Finally, some courts have held that prior litigation work product is always discoverable, even if the issues in the prior litigation are related to the issues in the case in which production is sought.(fn23) No position appears to command a majority and the Notes of the Advisory Committee on the 1970 Amendments to the Federal Rules(fn24) offer no guidance.
One of the most vexing problems in applying the work-product rule is determining whether a document was prepared "in anticipation of litigation." Courts have used many approaches to resolving this question, but none appears to be satisfactory in all cases. Attempted discovery of insurance claims files has given rise to a diversity of rules for applying the "anticipation of litigation" standard.
In what has been referred to as the "direction of counsel" approach, some courts have held that all insurance claims and investigation files are subject to discovery unless the insurance company demonstrates that the file was prepared by or under the direct supervision of counsel.(fn25) This approach has been justified on the theory that it is the ordinary business of insurance companies to process and investigate claims and therefore, barring attorney involvement, claims files constitute ordinary business records that are subject to discovery without any special showing.(fn26)
This approach has been criticized because the plain language of the rule rejects the proposition that only materials prepared or requested by an attorney fall within the work-product privilege.(fn27) The rule applies generally to materials prepared in anticipation of litigation ". . . by or for another party or by or for that other party's representative (including his attorney, consultant, surety, indemnitor, insurer, or agent. . . ."
An even more extreme approach is taken by some courts that have held that any documents prepared or obtained by an insurance company after an occurrence which might give rise to a claim fall within the work-product privilege.(fn28) This approach is rationalized on the theory that any time an event occurs which might result in a claim, "[t]he seeds of prospective litigation have been sown, and the prudent party, anticipating this fact, will begin to prepare his case. . . ."(fn29) The problem with this analysis is that it broadens F.R.C.P. Rule 26(b)(3) so as to effectively shield all insurance claims files from discovery, even where the possibility of litigation was remote or purely hypothetical at the time of the investigation.(fn30)
Some courts have avoided per se rules and approached the problem from a purely semantic perspective by simply restating, in a variety of ways, the "in anticipation of litigation" standard. Among the recharacterizations of the showing necessary to trigger work product protection cited by these courts are that the materials were prepared pursuant to "some possibility of litigation," "with an eye to specific litigation" or "done with litigation in mind."(fn31) This "recharacterization approach" is unsatisfactory because it merely restates the problem and does not help to solve it...
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