Attorney-client Privilege and Duty of Confidentiality: Distinction and Application

• Publication year: 2002
• Pages: 97

31 Colo.Law. 97 Colorado Lawyer 2002.

2002, January, Pg. 97. Attorney-Client Privilege and Duty of Confidentiality: Distinction and Application

---

97

Vol. 31, No. 1, Pg. 97

The Colorado Lawyer
January 2002
Vol. 31, No. 1 [Page 97]

Specialty Law Columns
Estate and Trust Forum
Attorney-Client Privilege and Duty of Confidentiality Distinction and Application
by Anette C. Wilson, D. Edward Brown

Distinctions exist between the attorney-client privilege and the attorney's duty of confidentiality in the estate planning context. This article discusses when these are waived and when each applies

This month's article was written by Anette C. Wilson Boulder, a sole practitioner—(303) 442-4803, and Edward D. Brown, Greenwood Village, an associate at Engel Reiman & Lockwood pc—(303) 741-1111. The authors wish to acknowledge the assistance of Eric R. Kaplan, an associate at Engel Reiman & Lockwood pc.

Estate planning involves minimizing estate taxes for clients. Just as important, estate planning should include organizing clients' assets and affairs in advance to safeguard against risks to which they may otherwise be exposed while they are still living. For purposes of this article, these concepts are referred to as the clients' "estate plans."

During the entire estate planning process, the attorney and client often are required to communicate with third parties in connection with the client's estate plan. For example, trustees, beneficiaries, certified public accountants, financial advisors, co-counsel, and sometimes even creditors may be consulted or informed regarding certain aspects of the structure and administration of the estate plan.

One challenge presented to the attorney during the estate planning process is to be able to communicate with third parties while adhering to the attorney's obligation to maintain client confidentiality. This obligation is two-fold in that the attorney has an obligation under the rules of evidence not to disclose attorney-client confidential communications (under the attorney-client privilege), as well as an ethical obligation to keep such communications confidential.1 Confidentiality obligations exist so that clients will be encouraged to make full disclosure to their attorneys, which thereby promotes broader public interest in the observance of law and administration of justice.2

Attorneys must balance the simultaneous goals of effective representation and confidentiality. This balance can be effectively achieved once the attorney understands how to communicate with third parties without having those communications act as a waiver of the attorney-client privilege or a breach of the attorney's duty of confidentiality. Communications can be conducted without waiver or breach of confidentiality under strict rules that permit some limited third-party disclosures. Attorneys should obtain their clients' informed consent prior to any such disclosures, thereby preserving client confidentiality in furtherance of the clients' intentions.

In some situations, the disclosure of confidential information is permitted or even required. This article explores the application and limitations of the client's right to assert the attorney-client privilege and the attorney's ethical duty of confidentiality. These duties are similar in the sense that they both protect confidential communications, but there are some distinctions.

Attorney-Client Privilege

The attorney-client privilege is an exclusionary rule of evidence. It prevents compulsion of privileged communication in a legal action, unless the privilege is waived by the client. The privilege protects written and oral communications between a client and his or her attorney in the course of obtaining advice regarding the client's rights or obligations.3 In Colorado, the privilege is governed by CRS § 13-90-107(1)(b), the attorney-client privilege statute, which codified Colorado's common law attorney-client privilege. Confidential communications remain privileged even if no representation develops from consultation.4 The attorney-client privilege also can survive the death of the client. Presumably, this is partly because a client may not be as candid if the attorney is required to disclose attorney-client conversations after the client's death.5

The U.S. Supreme Court has stated that the attorney-client privilege protects not only information and advice communicated between attorneys and clients, but also information communicated by third parties to attorneys to enable them to give sound and informed legal advice. For example, it has been asserted that in the corporate setting, only corporate agents (for example, the president and vice-president) are covered by attorney-client privileges, and that other corporate employees are considered third parties. However, the U.S. Supreme Court held that any corporate employee can communicate to the corporation's attorneys, regardless of the employee's position in the corporation. This communication is protected when the information is being communicated to the corporate attorneys to enable them to provide legal advice to the corporation.6

The privilege protects only communications with the attorney; it does not protect underlying and otherwise unprivileged facts incorporated into a client's communications with the attorney. Because the privilege protects certain communications and not facts, per se, pre-existing documents and items that would be discoverable if held in the client's possession, such as tax returns, will not gain privileged protection if merely placed in the attorney's possession.7 Nevertheless, documents can be protected under the privilege8 if they reveal a communication between a client and an attorney that was made to obtain or deliver legal assistance intended to be treated as confidential.9

Waiver of the Privilege

The attorney-client privilege may be waived by voluntary disclosure of privileged information to a third party.10 If a client makes a statement or comment to the attorney with the intent and purpose that it be communicated to others, the statement may not be privileged,11 even if the subject matter is ultimately not disclosed.12 The significant factor causing the waiver is that the information given to the attorney was to be communicated to others, and was not intended to be kept in confidence.13

An example of an inadvertent waiver by a client involves the situation in which a third party is present at a conference where the attorney-client communications occur. The attorney should make the client aware of this implied waiver. The attorney also should communicate to the client that any waiver of the attorney-client privilege not only affects transmitted data, but acts as a waiver of privilege as to the details underlying that information.14 Such details are not privileged because the waived privilege attaches to the substance of a communication, not to the particular words used to express the communication's content.15 Thus, any voluntary disclosure to a third party waives the privilege to the more detailed circumstances relating to the specific communication.16

The scope of waiver of the attorney-client privilege was recently addressed by the U.S. Court of Appeals for the Federal Circuit.17 In In re Pioneer Hi-Bred International Inc., the disclosure of legal counsel's privileged opinions and communications about the tax consequences of a proposed business merger in a proxy statement was held to waive the merger partners' attorney-client privilege for all documents pertaining to the tax...