In unity there is strength: the advantages (and disadvantages) of joint defense groups.

• Author: Nahrstadt, Bradley C.

We must indeed all hang together, or, most assuredly, we shall all hang separately.

--Benjamin Franklin, at the signing of the Declaration of Independence

IT IS NOT unusual today for counsel to be involved in cases with multiple defendants or in multiple cases involving the same defendant. In those types of cases it is often advantageous to work with counsel for the other defendants to prepare and present a joint defense to the pending claims. The best way to do so is to form a joint defense group. This article discusses the advantages associated with forming a joint defense group and the topics to be addressed in a joint defense agreement, identifies possible risks associated with creating a joint defense group, and discusses issues regarding preservation of the joint defense privilege.

1. Why Form a Joint Defense Group?

   There are several advantages to forming a joint defense group. Joint defense groups enable each defendant to substantially reduce the costs associated with its defense. These cost savings come in two forms. One is sharing the work: dividing legal research, splitting up the depositions, retaining expert witnesses, contributing paralegals for intensive document reviews. (1) Joint defense groups can also provide huge savings in expensive out of pocket costs. These include the costs of experts, consultants and court reporters. One of the largest costs incurred in "big document" cases is the cost associated with the creation of a computerized database to handle all the documents. Belonging to a joint defense group allows all defendants to share the sometimes enormous costs associated with creating and utilizing such databases. (2)

   Saving money is not the only benefit to be gained from belonging to a joint defense group. There is also the benefit derived from combining the expertise, knowledge and skills of the attorneys in the group. Some of the lawyers may have specialized knowledge about the substantive law at issue. Others may have experience dealing with the particular industry or business involved. Taken collectively, the joint defense group has deeper knowledge and more expertise than any single defendant's lawyer. (3)

   A third benefit of joint defense groups is the ability to coordinate strategy and tactics. Joint defense groups permit each attorney to fill knowledge gaps in the defense case and minimize the waste of judicial time that results from the presentation of uncoordinated defenses. A joint defense group enables the defendants to speak with one voice, thereby staying on message and avoiding (or reducing) conflict on their side of the case. A joint defense group can also help to ensure that one member's strategy doesn't work at cross-purposes with another's. (4)

   There are also drawbacks to participating in a joint defense group--conflicts that are inherent in the very nature of a joint defense effort. Major defendants in the case want to control the defense, in order to protect their large stake in the case. As a result, major defendants often do most of the group's work. Because they have more to lose, major defendants typically invest considerable time and effort in carefully establishing each possible defense and every basis for each defense. This can be extremely expensive, but for a major defendant the cost of a first class defense often pales in comparison to the potential liability it faces. (5)

   Minor defendants have a lesser stake in the litigation. Given their smaller risk of exposure, minor defendants sometimes balk at incurring the costs associated with the gold standard defense the major defendants insist upon. This conflict can easily create dissension within the group and threaten the major defendants' control of the group. (6)

   Major and minor defendants also frequently disagree on strategy issues. A minor defendant may want to file an early summary judgment motion which has the potential of eliminating a minor defendant from the case before it gets too expensive, while major defendants may be more interested in having the issue decided later in the case, after discovery has been completed and the record is fully developed. The minor defendant's desire for early resolution again interferes with the major defendant's strategic design and threatens the major defendant's control of the defense. (7)

   There may also be a conflict between the major defendants' interest in controlling the defense and their desire to spread the workload around. The major defendants want the other defendants to help carry the burdens associated with litigating the case, but they may not want to share control of the defense. If the other defendants answer a call for help, and become more active in the case, it becomes more difficult for the major defendants to continue controlling the defense, since the minor defendants will want more of a say in how the defense is being prepared and presented. Eventually, the major defendants will be forced to decide which is more important to them: saving money or controlling the defense of the case. (8)

   Minor defendants often face a mirror-image conflict, between their interest in cost savings and their opposing desire to actively participate in the defense of the case. Minor defendants want to be involved, but not the the extent that they incur huge costs. On the other hand, too much reliance on the group can be disastrous. Minor defendants must be active enough to protect their own interests while at the same time protecting their cash outlays. (9)

   Another potential conflict pits the need for group consensus against the need to be proactive. To move forward on any project whether it is the filing of a dispositive motion, the retention of an expert or the creation of a database the group must reach consensus. The larger the group, the harder it is to reach consensus in a timely fashion. And the failure to develop a timely consensus leads to missed opportunities, unfiled motions, depositions not taken, discovery not served and initiatives overlooked. (10)

2. There Can be no Joint Defense Absent Potential or Actual Litigation

   In order for a court to find that a valid joint defense agreement exists, the parties to the agreement must face actual or potential criminal or civil litigation--and not simply a common problem or shared business interests. (11) Absent pending legal action, parties cannot rely upon an ongoing past practice of sharing information to maintain the confidentiality of their communications. There is no such thing as a "standing" or "rolling" joint defense agreement. (12)

   In addition, the court will refuse to recognize a joint defense agreement unless the parties objectively agree that they will join forces. The mere impression of one party that other parties are, should or will cooperate does not suffice to prevent the disclosure of their discussions, including any admissions. (13) Even a general purpose meeting to discuss matters of common interest that is not intended to further the common purpose of an enterprise does not necessarily lead to the inference that there is a joint defense agreement. (14)

3. Joint Defense Agreements

   Although joint defense agreements do not have to be reduced to writing, the better policy is to do so. (15) Reasons to reduce the joint defense agreement to writing include: (1) a written agreement sets out the specific terms that govern the parties to the agreement so that there is no dispute on what is covered by or the scope of the agreement; (2) when a court examines whether the parties were operating as part of a joint defense group, the existence of a written joint defense agreement is strong evidence in favor of a positive finding; (3) written agreements usually dearly define the duties of the parties when someone withdraws or joins the group; and (4) the existence of a written agreement setting forth the parties' common understanding will bolster the argument that communications between the parties were made in the course of a joint defense effort. (16)

   When drafting a joint defense agreement, counsel should keep in mind that the court or an opposing party might someday read the agreement. While courts generally hold that joint defense agreements are privileged and protected from disclosure, a court might still order in camera review or compel disclosure. Counsel should take a great deal of time and devote a great deal of attention to carefully drafting a top-notch defense agreement.

   Key provisions that should be included in a joint defense agreement include:

   (1) The identity of the persons or entities engaged in the common effort;

   (2) A statement that the agreement covers all participating clients, their attorneys, their employees and agents and that the parties share a mutuality of interest in a common legal enterprise directed toward devising a common legal strategy;

   (3) The types of information covered by the joint defense agreement, i.e., witness interviews, legal memoranda, documents, legal strategies, etc., and how they may be used;

   (4) An explicit statement that the communications had or materials shared were confidential prior to disclosure to the parties and that the party sharing such communications or material has an expectation that they will be kept confidential;

   (5) An acknowledgement that any communications that may have occurred prior to the execution of the formal agreement are also subject to the joint defense privilege;

   (6) A specific statement that shared materials should be used solely for joint defense purposes;

   (7) The procedures to be followed when subpoenas, court orders or other demands are made for materials protected by the joint defense agreement;

   (8) A process for communicating and maintaining the confidentiality of information to third parties necessary for the defense of the common effort, such as consultants, investigators and experts;

   (9) A statement that communications or materials that fall within the attorney-client privilege or work product doctrine can be...