Vol. 12, No. 1, Pg. 32. Cutting the Fishing Trip Short: Protecting an Adjuster's Claims File.

• Author: By Robert L. Reibold

South Carolina Lawyer

2000.

Vol. 12, No. 1, Pg. 32.

Cutting the Fishing Trip Short: Protecting an Adjuster's Claims File

32Cutting the Fishing Trip Short: Protecting an Adjuster's Claims FileBy Robert L. ReiboldPlaintiff's attorneys increasingly seek to invade the sanctity of an insurance adjuster's claims files. They have even, on occasion, deposed adjusters to learn what information the adjuster may have uncovered during his or her investigation of a particu lar claim. These efforts disrupt the claims handling operations of insurers and interfere with the efforts of the insurer and defense counsel to coordinate the insured's defense.

34 To minimize the disruption caused by these efforts, both defense counsel and insurers should be aware of the legal tactics that might be employed by plaintiff's counsel embarking on a "fishing expedition."

Unlike winning a hand of poker, however, preventing plaintiff's counsel from accessing the contents of an adjuster's claims file cannot often be accomplished by bluffing. The secret is to stack the deck. Insurers and defense counsel can structure their claims-handling procedures so that, from the outset, their files receive the maximum amount of protection.

Protection for the contents of a claims file stems from two primary sources: the attorney-client privilege and the work-product privilege. This article will discuss each of these privileges separately. First party claims and bad faith claims are outside the scope of this article.

ATTORNEY-CLIENT PRIVILEGE

To establish that the attorney-client privilege shields a specific communication or document from discovery, counsel must show that the relationship between the parties was that of attorney and client and that the communications were of a confidential nature. See State v.Love, 271 S.E.2d 110, 112 (S.C. 1980), cert. denied, 449 U.S. 901 (1980). Furthermore, the communication involved must relate to a fact of which the attorney was informed by his or her client without the presence of strangers primarily for the purpose of securing either an opinion on law, legal services or assistance in some legal proceeding. Marshall v. Marshall, 320 S.E.2d 44, 47 (S.C. Ct. App. 1984).

The difficulty of making such a showing varies according to the type of communication or document at issue. The simplest type of communication to shield from discovery is one from the insured to counsel about the insured's defense, the classic attorney-client communication. Other communications that occur in the context of a third party liability claim, however, carry with them greater potential for exposure.

There are no reported South Carolina cases addressing the attorney-client privilege and its effect on the discoverability of an adjuster's claims file. The general law on this issue is summarized below.

Communications between the Adjuster and Counsel. The relationship between an insured, his or her attorney and an insurance adjuster is perhaps the situation that best calls for application of the common interest doctrine. Pittston Co. v. Allianz Ins. Co., 143 F.R.D. 66, 71 (D.N.J. 1992). Under the common interest doctrine, "although an attorney actually represents only one party, there is no waiver of the attorney-client privilege by disclosure of privileged communications to third persons with 'a community of interest.'" Pittston, 143 F.R.D. at 69; see also James M. Fisher, The Attorney-Client Privilege Meets the Common Interest Arrangement: Protecting Confidences whileExchanging Information for Mutual Gain, 16 The Review of Litigation 631, 637 (1997). In other words, because the insurer and the insured share a common interest in the defense of the insured, statements made to counsel by either of them remain privileged.

Of...