The request for information from employers, insurers and claims administrators is commonplace in the litigation of workers’ compensation matters - so commonplace that the requests are frequently responded to without sufficient thought and care. The requests may be in the form of a subpoena demanding personnel files, injury files, claims files or other documentation or the request may be less formal such as a call from an expert retained in the case who hopes to gain information to which he/she may not be entitled or which will be used adversely.

Whereas the requests may appear totally reasonable there are pitfalls in disclosing any information without an analysis of potential privileges that could apply to prohibit or limit the disclosure. Failure to exercise a privilege may create a waiver which could be used to force further disclosure of material information that in turn can be used against the party for whom the privilege was created. For example, communication between clients and their attorneys is privileged. If settlement authority is extended to an attorney and that information is disclosed to the adverse party that would probably have a negative effect on the ability of the attorney to negotiate resolution on the file.

In the current world of fast paced communication with e-mail, cellular telephones and the internet, communications can be passed in seconds to a wide variety of locations across the globe. Events like these can severely damage and hamper the outcome of everyday litigation. Even before the advent of our current electronic capabilities our founding fathers identified the need for certain communications to be held in confidence. For just such a reason various statutes have been enacted on both the Federal and State level to provide a framework of privilege protection.

THE WHO:

A brief history of how laws are created is warranted for this discussion. In the United States, laws are written and established by the Legislative Branch of government, both Federal and State, which are in turn interpreted by both the Federal and State Courts. The attorney-client privilege is codified in both Federal and State evidence codes. Under Federal Law, the privilege is codified in section 501 et.seq. of the Federal Rules of Evidence. Under California state law, it is found at section 950 et. seq. of the California Evidence Code.

The attorney-client privilege protects confidential communications, whether written or oral, between an attorney and his or her client from disclosure. The privilege belongs to the client and is not to be waived by the attorney without explicit consent of the client. While various states treat this privilege differently, California provides one of the most expansive interpretations of confidentiality which essentially include all communications with a client without “unnecessary” third parties, for the purpose of seeking or rendering legal advice. Expressly included are those communications that are reasonably foreseeable to lead to the discovery of confidential communications. Scripps Health vs. Superior Court of San Diego County, 109 Cal. App. 4th 529, 534 (2003). Communications between the client and the attorney’s employees and agents, such as secretaries and paralegals are also protected as long as they are necessary to the attorney’s work.

For example, a client and his/her attorney discuss the merits of a case and the attorney is authorized to settle the matter up to a certain dollar value. The potential value of the case is significant enough that there is an advantage in retaining a settlement broker to identify structured annuities for payment of the settlement. The broker must be provided with a value to identify particular investment vehicles to accomplish a desired result.

If the client’s attorney contacts the broker and discusses a settlement value and authority the conversation is privileged and cannot be disclosed. If however, the client contacts the settlement broker directly, without involvement of counsel, and provides the broker with the maximum authority value for the case there is a question concerning whether the privilege would apply. When in discussion with the attorney the broker is a necessary third party. Without the attorney, one could say the communication was not for the purpose of rendering or seeking legal advice. If found to not be within the confines of privileged communication, the full authority is discoverable and the broker cannot avoid disclosure of the content of the discussion on the basis of privilege.

In this example, an opposing attorney may not have to worry about respecting a privilege in discussing with the broker the conversation regarding settlement value, because none may exist. On the other hand if a privilege does exist, the opposing attorney has an obligation to disclose his communication with the broker. If the privilege exists to protect a document, the document must be returned. State Compensation Insurance Fund v.WPS, Inc., 70 Cal. App.4th 644 (1999).

The ethical Rules that bind attorneys also mandate great responsibility in respecting the privilege and a duty to assert the privilege when necessary. There are some limited exceptions to the privilege. For example, disclosure is permitted to prevent a crime that will result in death or serious bodily injury. Legal counsel should be aware of these exceptions and the applicability of same depending on the state and jurisdiction/venue of legal actions.

THE WHAT:

The attorney-client privilege protects from disclosure the confidential communications between a client and his attorney. De Los Santos v. Superior Court of Los Angeles County, 27 Cal.3d 677 (1980). While the privilege of non-disclosure belongs to the client it can be claimed by either the client or the attorney. However, it can also be waived by either. It is thus critical that legal professionals not only aggressively guard client confidences but also assert the privilege on the client’s behalf when appropriate.

What is a confidential communication? California Evidence Code, Section 952 provides that confidential communication:

. . . means information transmitted between a client and his or her lawyer in the course of that relationship and in confidence by a means which, so far as the client is aware, discloses the information to no third persons other than those who are present to further the interest of the client in the consultation or those to whom disclosure is reasonably necessary for the transmission of the information or the accomplishment of the purpose for which the lawyer is consulted, and includes a legal opinion formed and advice given by the lawyer in the course of that relationship. (Emphasis added)

But what is considered information or knowledge such that the privilege will apply? The California Supreme Court has examined this issue from a corporation standpoint and established the “dominant purpose” test to determine what will be considered a confidential communication regardless of the form either written or spoken. Under the dominant purpose test, the actual purpose of the communication dictates whether the attorney-client privilege will apply. D.I. Chadbourne, Inc. v. Superior Court, (1964) 60 Cal. 2d 723, 736-738 In other words, if one made the communication in anticipation of litigation or intended the communication to be confidential in the event of litigation or during litigation, the privilege would apply. Scripps Health vs. Superior Court of San Diego County, (2003) 109 Cal. App. 4th 529, 534-535.

Further facts may be used to demonstrate the actual purpose of the communication so that the privilege will apply. These may include accident and analysis reports, disciplinary reports or the like. A recent case provides an illustration of just such a document being inadvertently disclosed. However, the attorney client privilege protected its use against an employer who was accused of a 132a violation in a proceeding before the Workers’ Compensation Appeals Board of the State of California.

In this case, the attorney representing the employer on the 132a allegations requested the company president to prepare a summary of employment and personal information concerning the applicant. The document was transmitted to the attorney who later forwarded the document to the employer’s insurance company. There, it was placed in the claims file. It was also forwarded to the adjusting agency for the insurance company.

A short time later a second insurance company subpoenaed the file of the adjusting agency. Among the documents copied was the employer’s summary. The attorney for the applicant received a copy of the summary in the subpoenaed records. At a Mandatory Settlement Conference the employer’s attorney noticed that his opponent had a copy of his client’s summary. He immediately filed for a protective order, for disqualification and for sanctions against the applicant’s attorney. A trial ensued after which the Workers’ Compensation Judge (“WCJ”) found for the employer, prohibited the use of privileged materials and ordered sanctions against the applicant’s attorney. Reconsideration was denied and the WCAB adopted and incorporated the opinion of the WCJ. A Petition for Writ of Review filed by applicant’s attorney was also denied. The Appellate court however opined that the evidence in the record amply supported the finding that the employer’s summary was privileged. The court further found that no waiver had occurred merely by the act of the employer’s attorney forwarding the summary to the insurance company. Counsel for the applicant had an obligation to return it to the defense counsel which he did not do. William Lamouree v. Workers’ Compensation Appeals Board, 70 CCC at 640 (2005). Writ Denied. This example illustrates how unintended disclosures may occur and the lengths used to protect privileged materials.

Other communications are and will likely include employer’s records, reports, videotapes, recordings and documentation of all different kinds and medium that contain thoughts or impressions of employees for most employer purposes if for or in anticipation of litigation or during active litigation. It is irrelevant whether or not there is active litigation at the time the communication was made. Thus, while the entire employer file is not in and of itself protected from disclosure, certain portions of the file may be protected and excluded from production. Additionally, documentation considered normal business records may also contain privileged communications that can be disclosed through inadvertence if not carefully reviewed. In this day and age of electronic communication the definition of communication is continuingly expanding creating a need for increased vigilance and assertion of the privilege when it applies.

One of the most recent discoveries is hidden codes created by computer software that can be disclosed when discovery is transmitted via computer disk. This metadata is embedded when documents are created using word or data programs. If analyzed, it may contain mountains of information about the creator of the documents. At present, this is a new field that is yet to be protected by statute and or court analysis.

THE WHY:

Why do we have this concept? The attorney-client privilege has long standing roots in ancient history going back even to Roman law. It was established so that the Governor of Sicily could not call the governor’s advocate as a witness since to do so would cause the accused to lose confidence in the very system which was designed to protect them. The privilege was further refined through the ages under English Common Law and continues to evolve to date.

The main purpose of the privilege is to encourage full disclosure of information from client to legal counsel without fear of disclosure. The privilege extends to both individuals and entities. Upjohn Co. v. United States, 449 U.S. 383 (1981). Only with all the facts can an attorney properly represent his or her client. Full disclosure also allows earlier resolution of matters saving time and resources for other issues. All in all, the privilege allows the client the right to “full and frank disclosure” knowing that the information will remain confidential even after death. In re Sealed Case, 124 F.3d 230 (D.C. Cir. 1997)

SUMMARY:

This analysis is only a brief synopsis of the attorney-client privilege. The computer and other forms of communication created since its birth has brought new and ever changing challenges to this area of law. One merely needs to look at the information that can be stored and sent with a quick key stroke on a Blackberry (whether purposefully or accidentally) to understand the dynamics of applying the attorney-client privilege to modern day communications. Always consider the broad scope of the privilege and remember to consult your attorney before disclosing any information so that your attorney can assure that no privileged item is inadvertently disclosed.