This is just between us

Lawyers are in the relationship business. The better theirs are, the more likely it is for them to have existing clients express pleasure with their services, potential clients reach out, opposing counsel listen to their ideas, and other lawyers refer business to them. And, a primary way that relationships are developed is communication. The cruel twist is that one aspect of lawyering that can frustrate some is that lawyers sometimes are precluded from sharing information, including some of the most fascinating stories they will ever know. That is due to their duty of confidentiality, which includes the obligation to preserve client secrets.

There are some limited circumstances where lawyers may share information learned in the context of the representation. One is where their client has a common interest with another party. The judicially-created common interest doctrine--sometimes also referred to as the common interest privilege--recognizes the practicality of sharing information with others whose interests are aligned. Not only does this permit the parties and their counsel to assess the matter better due to the greater amount of information, it also generally permits them to do so more efficiently, since they would benefit from not having to duplicate each other's factfinding efforts. In this context, the parties and counsel may share information with each other and their respective attorneys without destroying the attorney-client privilege. That is the point of it, and it is often memorialized in a joint defense agreement or a joint prosecution agreement. As good as this sounds, there are a few things to consider before diving in.

First, despite how it is sometimes referred to, there is not a unique privilege to these communications. In California, privilege may be created only by legislative act and, to date, no statute recognizes a common interest privilege. Rather, California courts have recognized through the doctrine that parties may be deemed not to have waived existing privileges. What that means is that a person relying on the common interest doctrine needs to do more than attest that a confidential communication occurred between parties with a common interest. First, they must establish that the shared information would otherwise be subject to a privilege, such as information from an attorney-client communication or ideas protected by the work product privilege.

It is only after that element is established that you would then look to whether there was waiver of that privilege or whether it should be protected by the common interest doctrine. The Second Appellate District has observed, "While involvement of an unnecessary third person in attorney-client communications destroys confidentiality, involvement of third persons to whom disclosure is reasonably necessary to further the purpose of the legal consultation preserves confidentiality of communication. ... [P]rivilege extends to communications which are intended to be confidential, if they are made to attorneys, to family members, business associates, or agents of the party or his attorneys on matters of joint concern, when disclosure of the communication is reasonably necessary to further the interest of the litigant."

In context of communications among parties with common interests, the participants must have a reasonable expectation that the shared information will remain confidential. It is for that reason that a written agreement, though not required by the doctrine, may be helpful in establishing the reasonableness of that expectation. Further, the disclosure of the information must be reasonably necessary to accomplish the purpose for the representation. Absent these factors--the existence of a privilege to begin with, a reasonable expectation of confidentiality, and a shared interest in the information for purposes of the representation--parties sharing information risk that their communications may not be protected.

Lawyers may also want to be careful about what obligations common interest agreements impose. The usual purpose of such agreements is to impose a duty of confidentiality on parties and their counsel, which often may establish the reasonableness of the confidentiality expectations. But this imposed duty can potentially pose new issues for the lawyers involved.

For example, in United States v. Henke, a Ninth Circuit matter, a lawyer was required to withdraw when a co-defendant became a cooperating witness. The lawyer indicated that the common interest agreement prevented the lawyer from being able to properly cross-examine that witness, thereby imposing a material impediment to advocate on behalf of the client. The court explained that similar to the inability to take a position adverse to a client in a substantially related matter, a lawyer should not be allowed to proceed against a person in a matter substantially related to one where confidential exchanges of information occurred between that person and the lawyer, even if the person had been represented by a different lawyer. As the Restatement (Third) of the Law Governing Lawyers section 132 provides, "Such a threatened use of shared information is inconsistent with the understanding of confidentiality that is part of such an arrangement."

One way to address some of these issues is through the written agreement. Some agreements, while detailing the confidentiality expected between the parties, might provide appropriate carve outs. For example, in addressing the subject, the DC Bar suggested it might be possible to specifically disclaim any attorney-client relationship with other parties to the agreement--aside from the participating lawyers' clients they already represented--and provide a specific waiver that would permit use of a confidential joint defense information for cross-examining any member of the agreement who later became adverse. Historically, the more closely tailored the agreement is to the situation that arises, the more likely the waiver is to be enforced. Indeed, that tends to hold true for advance waivers in any context. So, such an agreement may provide, for example, a specific acknowledgment that the type of confidential information that could be used to impeach or cross examine might be information the testifying witness shared with their attorney that was then shared with the common interest group.

The common interest doctrine can provide a wonderful means of streamlining litigation by increasing the scope of information received and the efficiency with which it is learned. But lawyers should consider how they are using the doctrine first to preserve their client's secrets and confidences and second to set appropriate limitations should an unexpected adversity develop.

The Klinedinst PC Ethics and Risk Management Team writes a monthly Practical Ethics Column to assist California Practitioners understand cutting edge ethics issues, manage risk, and ensure compliance. More about the Team and the authors--Heather L. Rosing, Dave Majchrzak, Christine Rosskopf, and Joanna Storey-- can be found here: https://klinedinstlaw.com/practice/legal-ethics-law-firm-risk-management