Using joint defense privilege agreements in parallel civil and criminal proceedings: there are pluses and minuses to joint defense agreements, but the pluses might outweigh the minuses if the agreements are carefully drafted.

• Author: Wilson, Rebecca J.

MANY situations that involve parallel proceedings also entail multiple respondents, targets or defendants. Cooperation among them can be an essential component in mounting a successful defense to parallel proceedings, but cooperation and sharing of information among parties represented by separate counsel is not without risk. Among those are lack of control over disclosure of privileged information, waiver of privileges, and disqualification of counsel when respondents assert claims against one another or become government witnesses.

One way to minimize the risks and achieve cooperation is through the considered use of the joint defense privilege, embodied in a joint defense agreement. Cooperation in a joint defense effort allows respondents to pool information and coordinate strategies to defeat civil claims and to control investigations by governmental agencies. These shared efforts allow each respondent to develop a global view of the issues and to counter pressure by plaintiffs' attorneys, prosecutors and governmental agencies on individual respondents to incriminate others.

An awareness of the scope of the joint defense privilege and the key components of a workable joint defense agreement will facilitate an informed discussion among counsel for respondents about the potential benefits and disadvantages of such agreements in particular cases.

JOINT DEFENSE PRIVILEGE

The joint defense privilege is "an extension of the attorney-client privilege" and the work product doctrine. (1) It protects communications between an individual and an attorney for another when the communications are part of a joint effort to set up a common strategy. "Communications to an attorney to establish a common defense strategy are privileged even though the attorney represents a client with adverse interests." (2) The joint defense rule is applicable to both civil and criminal litigation and to both plaintiffs and defendants. It represents an exception to the general rule that disclosure of information protected by the attorney-client privilege to a third party waives the privilege.

The joint defense privilege does not create a new privilege. Rather, it serves to protect an existing privilege from waiver. In this manner, shared information is protected by the attorney-client privilege without the danger of waiver. (3) In addition to confidential communications, attorneys' work product also is protected under the joint defense privilege. (4)

The joint defense privilege has been held applicable in a variety of situations. Courts broadly construe the term "co-defendants," and they have extended the joint defense privilege to civil co-defendants; (5) companies individually summoned before a grand jury and who information before any indictment was returned; (6) potential co-parties to prospective litigation; (7) plaintiffs who were pursuing separate actions in different states; (8) and civil defendants who were sued in separate actions. (9)

The apparent justification for the rule is the belief that "persons who share a common interest in litigation should be able to communicate with their respective attorneys and with each other to more effectively prosecute or defend claims." (10) The need to protect the free flow of information exists whenever multiple clients share a common interest about a legal matter.

Because the joint defense privilege is an extension of the attorney-client privilege, parties seeking to benefit from it must establish all the elements of the attorney-client privilege, plus the added requirement that the communication in question involves a common legal interest. As with all privileges, the party seeking to invoke it has the burden of establishing all necessary elements.

In order to establish the existence of the privilege the proponent must show that:

* the communications were made in the course of a joint defense effort in prosecuting or defending actual or threatened litigation;

* the communications and exchange of information were designed to further that joint effort; and

* the privilege has not been waived. (11)

Because courts differ on the extent to which joint defense communications are protected, it is important to determine, before drafting a joint defense agreement, which jurisdiction will hear the lawsuit. (12)

1. Common Interest

   In parallel proceedings with multiple parties, the parties may have a true identity of legal interests but more often will be aligned on some but not all issues. Inasmuch as the joint defense privilege requires that the parties demonstrate a commonality of interest, does divergence of interests in any respect defeat the privilege? Some courts have held that a divergence of interests will defeat the privilege. (13) The majority of courts that have considered the issue, however, have held that the parties need not demonstrate an identity of interests in order to avail themselves of the protections afforded by the joint defense privilege. (14)

2. Actual or Pending Litigation

   In many cases, including those involving parallel proceedings, communications between parties with common interests are desirable prior to the actual initiation of litigation or administrative or criminal proceedings. The joint defense privilege protects such communications when they are made in the face of either actual or threatened litigation. (15)

3. Reasonable Expectation of Confidentiality

   As with all claims of privilege arising from the attorney-client relationship, a claim of joint defense privilege requires a showing that the communication in question was made in confidence. (16) In analyzing whether a given communication was meant to be confidential, courts will look to what the client reasonably understood at the time the disclosure was made. (17) The key question in analyzing the expectation of confidentiality is what was objectively reasonable in the circumstances.

   Although the joint defense doctrine applies where there is no explicit understanding that the communications are to be maintained in confidence, the circumstances of the communication must indicate that the communication was made in confidence. (18) A written joint defense agreement explicitly stating that confidentiality is agreed to is one way to help ensure that a court will find the communication to have been made in confidence.

4. Communications with Non-parties

   In defending parallel proceedings, counsel may need to rely on individuals other than co-defendants and their counsel to maintain and develop a successful defense. Communication made to persons other than co-counsel and their clients may be protected under the joint defense privilege if made in connection with the joint legal representation. (19)

5. Waiver

   Parties to parallel proceedings who wish to mount a joint defense effort often are understandably concerned about disclosure of confidential information to parties over whom they have no real control. Fears often are expressed by those contemplating entering into such efforts that disclosure to third parties might result in a waiver or loss of privilege relating to information protected by the attorney-client or work product privileges. These concerns can be addressed by understanding the doctrine of waiver as applied to joint defense agreements and by drafting joint defense agreements to guard against waiver.

   It is important to understand that the joint defense doctrine may be waived. A party to the communications may waive the attorney-client privilege by disclosing the confidential information to persons outside the scope of the "joint defense" relationship. (20) Communications made in the presence of parties not participating in the joint defense effort will waive any joint defense privilege that might have existed but for the presence of the non-participating party. For example, a disclosure of "confidential"...