Legal professional privilege: comparing different approaches within the United States and the European Union.

AuthorLefebvre, Paul

THE CONCEPT of privileged attorney-client communications has been a long standing tenet in legal communities for decades. However, the scope and justification for privilege vary by jurisdiction. This article compares current trends concerning the status of privileged communications made between a lawyer and his or her client within both the United States (US) and the European Union (EU). While at least one jurisdiction in the US has extended attorney-client privilege to protect attorney-to-client communications, in a recently decided case, the European Court of Justice ("EUCJ") affirmatively narrowed this privilege.

  1. Green Light: Pennsylvania Protects Attorney to Client Communications

In an Opinion issued on February 23, 2011, the Pennsylvania Supreme Court clarified the issue of attorney-client privilege and recognized that the privilege protects attorney-to-client communications as well as client-to-attorney communications. (1) Gillard vs. AIG Insurance recognized that:

"... in Pennsylvania, the attorney-client privilege operates in a two-fashion to protect confidential client-to-attorney or attorney-to-client communications made for the purpose of obtaining or providing professional legal advice."

The Gillard decision overturned the prior standard, articulated most recently in Nationwide v. Fleming. (2) The Nationwide case involved internal documents from in-house counsel. The Pennsylvania Superior Court held, based on statute, that the documents were discoverable as they were communications from counsel to the client. The case was then appealed to the Pennsylvania Supreme Court. Because of odd circumstances, only four Justices participated in the Nationwide opinion, with two Justices affirming and two voting for reversal. As a result, the holding of the Superior Court remained the law of the Commonwealth until the Gillard decision.

Gillard involved a claim for statutory insurance bad faith arising out of the handling of an underlying claim for uninsured/underinsured motorist benefits. The trial court ordered the Defendants to produce documents which were drained by counsel for the Defendants in the underlying underinsured motorist claim and directed to the claims handler. The underlying action was a UM/UIM arbitration. On the eve of the hearing, the underlying matter settled. Subsequently, the statutory insurance bad faith action was filed. Since the documents were created relative to the underlying action that had concluded, the attorney work product privilege was not available. In the bad faith action, defense counsel asserted attorney-client privilege. The trial court issued a blanket ruling from the bench that communications from an attorney to his client are not protected by the attorney-client privilege. The trial judge stated:

"According to the Pennsylvania statute, the attorney-client protection only applies to communications made by the client. That's my ruling." (3)

The statute in question states:

"Confidential communications to an attorney. In a civil matter, counsel shall not be competent or permitted to testify to confidential communications made to him by his client, nor shall the client be compelled to disclose the same, unless in either case this privilege is waived upon the trial by the client." (4)

Both the trial court and the Superior Court strictly interpreted the statute, holding that since it only referenced client-to-attorney communications, only those communications would be privileged. In its argument, AIG took the position that the codification of the attorney-client privilege did not change or limit the essential nature of the common law, which dated back to colonial times in Pennsylvania. Further, the current statute essentially reenacted an original statute dating to 1887. Many years prior to the reenactment, the Supreme Court decided the case of National Bank of West Grove v. Earle. (5) In that case, a group of unsecured creditors sought discovery from one "Counselor Johnson", who was an attorney involved in the reorganization of stocks for a company known as Record Publishing Company, in order to satisfy outstanding creditors. Johnson objected to the discovery, arguing that "a bill of discovery is not the proper method, if there be any proper method, to compel counsel to disclose the advice given to his clients." The Pennsylvania Supreme Court found that the advice was privileged, stating:

"If it were not, then a man about to become involved in complicated business affairs, whereby he would incur grave responsibilities, should run away from a lawyer rather than consult him. If the secrets of the professional relation can be extorted from counsel in open court, by the antagonist of his client, the client will exercise common prudence by avoiding counsel." (6)

The Earle case did not specifically reference the 1887 statute. Relying upon Earle in argument, AIG argued that the reenactment of the statute had to be interpreted in a consistent manner with the Supreme Court's holding in Earle.

  1. Nationwide v. Fleming

    In Fleming, the document at issue was a sensitive litigation strategy memorandum from a nationwide in-house lawyer to other nationwide lawyers and executives. The document provided the author's opinion regarding the case, as well as strategy. The trial court ordered the document to be produced based upon waiver, not privilege. The Court concluded that Nationwide had waived the privilege by producing other related documents. On appeal, the Superior Court affirmed, but on a different basis. The Superior Court held that the document was not privileged at all. The Superior Court held that the privilege protected only client-to-counsel communications, not counsel-to-client communications. As such, they held that the document was never privileged because it was a counsel-to-client communication that did not reveal any prior client-to-counsel communications. Curiously, two Superior Court judges who authored the opinion were subsequently elected to the Pennsylvania Supreme Court. A third Justice on the Pennsylvania Supreme Court is a sister of one of the attorneys who represented a party in Fleming. Therefore, when Fleming came before the Supreme Court, three of the seven justices had to recuse themselves, leaving only four justices to render a decision. As often happens in such situations, there was a tie. In baseball, a tie goes to the base runner. In this case, however, the tie left the existing decision of the Superior Court as the law of the state.

    It should be noted, though, that the two justices who voted in favor of affirming the Superior Court opinion based their position not on the reasoning of the Superior Court, but on the reasoning of the trial court. They held that they did not need to address the issue of whether or not there was a privilege since there had been a waiver. The two justices who voted to reverse held that there was no waiver and that a privilege should apply.

  2. Gillard v. AIG

    Shortly after the Fleming opinions were issued, the Supreme Court accepted allocatur on Gillard. Of particular concern in Fleming was the potential of a "chilling effect" that the ruling may have on communications by in-house counsel. Without privilege, it would be extremely difficult for in-house counsel to perform their daily job functions communicating with co-workers. Although allocatur was accepted in Gillard, the communication in Gillard was from outside counsel to the claims handler and, therefore, the facts would not directly address the in-house counsel dilemma. Nonetheless, the waiver issue was not present in the Gillard case, meaning that the Supreme Court would have to address the issue of attorney-client privilege directly.

    Compounding the challenge in Gillard was the fact that all seven Justices would sit for the case. Included among the seven justices were the two who did not participate in Fleming because they wrote the Fleming Superior Court opinion, and were subsequently elected to the Supreme Court. Their position was known from the Superior Court opinion, in which they opined that the privilege was unilateral. Additionally, the justice whose brother had sought the documents in Fleming was also sitting on the panel. The Court also included the two justices who wrote the Fleming Supreme Court opinion affirming Fleming on the trial court's reasoning that there had been a waiver of the privilege.

    To address the position of those two justices, AIG focused upon the waiver issue in Fleming. The argument to the Court was that one cannot find waiver unless there was a privilege to waive. Therefore, although those two justices did not address the privilege issue in their Fleming opinion, by finding a waiver of a privilege, the privilege must have existed.

    With respect to the position taken by the justices who authored the Superior Court opinion in Fleming, AIG argued that the statute could be read consistent with the common law. Even though the statute only addresses communications from client-to-counsel, this does not mean that the attorney-to-client communications are not also protected. The common law, as enunciated in Earle, has always recognized that all communications between attorney and client were privileged. Counsel argued that the statute merely provided direction to counsel that they could not reveal communications from the client.

    Joining in support of AIG were several amici filers, including the Philadelphia Bar Association, the Pennsylvania Bar Association, the Allegheny County Bar Association (Pittsburgh), the Association of Corporate Counsel, Chamber of Commerce of the United States of America, the Energy Association of Pennsylvania, the American Insurance Association, the Pennsylvania Defense Institute, the Insurance Federation of America, and the Philadelphia Association of Defense Counsel. The amici filers focused on the impact of the privilege to corporate counsel, which could not directly be addressed by AIG. Further, the amici...

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