Policy, Privilege and Methodology in Cases Involving Implied Waivers of The Attorney-Client Privilege
By: Richard Granofsky

Issues regarding the waiver of attorney-client privilege frequently arise in legal malpractice cases. Privileged communications may show that attorneys other than the defendant lawyer played a substantial role in bringing about the plaintiff’s loss. In order to obtain privileged communications between the party and his or her lawyer that re relevant to the claims or defenses in the malpractice case, counsel often argues that the party’s conduct amounts to an “implied waiver” of the attorney-client privilege. In other words, the party’s conduct in bringing the malpractice case or in defending it puts at issue his own privileged communications, and this serves to waives requires him to disclose his privileged communications.

In analyzing whether an implied waiver has occurred, courts frequently balance our legal system’s interest in finding out the truth against its interest in protecting counsel-client communications. Three tests have emerged for determining whether a plaintiff has waived the attorney-client privilege by injecting an issue into the case that requires him to disclose privileged communications: the automatic waiver rule, the balancing test, and the “Hearn Test,” which derives from Hearn v. Rhay, 68 F.R.D. 576 (E.D. Wash. 1975). Under the automatic waiver rule, a litigant waives privilege by asserting a claim, counterclaim or affirmative defense that places in issue a matter otherwise privileged. Many courts reject this approach because of its rigidity. Under the balancing test, disclosure is required if some or all of a communication is “vital” to defendant’s case, and defendant cannot reasonably obtain the necessary from any other source. This approach has been criticized as inconsistent with concepts of absolute privilege. The Hearn Test is the majority approach.

In Hearn, an inmate sued prison officials for civil rights violations. Defendants argued they acted on counsel’s advice, and plaintiff sought to obtain their communications, arguing implied waiver. The court held a waiver occurs where: (1) assertion of the privilege is the result of an affirmative act, such as filing suit, by the asserting party; (2) through this affirmative act, the asserting party put the protected information “at issue,” by making it relevant to the case; and (3) application of the privilege would deny the opposing party access to information vital to his/her defense.  The court found an implied waiver occurred.

Two other cases have often been cited by courts dealing with the implied waiver issue under the majority approach: Jakobleff v. Cerrato Sweeney & Cohen, 97 A.D.2d 834 (N.Y. App. Div. 2003) and Pappas v. Holloway, 787 P.2d 30 (Wash. 1990).  Jakobleff was a legal malpractice case in which plaintiff sued his former attorneys for damages resulting from their alleged negligence in securing a divorce settlement. Defendants brought into the case the attorney retained by the plaintiff to prosecute the malpractice claim, alleging that this attorney failed to mitigate the plaintiff’s damages by not pursuing remedial actions against plaintiff’s ex-husband. The defendant’s lawyers sought to depose the plaintiff’s attorney arguing waiver.

The court observed that a waiver could be found in two situations: (1) where a client places the subject matter of the privileged communication “in issue” or (2) “where invasion of the privilege is required to determine the validity of the client’s claim or defense and application of the privilege would deprive the adversary of vital information.” The court found that the communications were protected. By bringing an action against her former attorneys for legal malpractice, the court found that plaintiff placed her damages in issue. Plaintiff did not, however, place her privileged communications with her present attorney in issue, and discovery of such communications was not needed to enable defendants to assert their defense. Any other outcome would render the privilege illusory in all legal malpractice actions, because the former attorney, i.e., the defendant, could, by asserting a contribution counterclaim against the present attorney, invade the privilege.

Pappas began with the lawyer defendant trying to compel a client, the Holloways, to pay a legal fee arising from legal services that Pappas provided in a litigation case. During that litigation, the client was represented by four attorneys. Pappas withdrew prior to trial. After a finding of liability against the Holloways in the underlying litigation, the Holloways refused to pay Pappas, and Pappas sued for his fees. The Holloways, predictably, counterclaimed for malpractice. Pappas brought third-party claims against the attorneys who represented the Holloways in the underlying case, after Pappas withdrew from that case, including the attorney who tried the case. Pappas sought notes and correspondence regarding the litigation from the third-party defendant attorneys, who argued the documents were privileged.

On motion to compel, Pappas argued his advice was not the proximate cause of the Holloway’s damages, and that any damages suffered were caused by the inadequate representation of the impleaded, third-party defendant attorneys. The Pappas Court held the Holloways had placed their communications with the other attorneys “at issue” when they counterclaimed for malpractice. The court distinguished cases where malpractice could not be attributed to attorneys because they were hired after the events constituting the malpractice. The Holloways could not counterclaim against Pappas for malpractice and at the same time conceal from him communications having a direct bearing on the malpractice issue. Doing so would enable them to use as a sword the protection the legislature created for them as a shield.

In Jakobleff, the lawyer accused of malpractice’s conduct was not “at issue” because it could not have been a proximate cause of plaintiff’s injury. The “malpractice” was a distinct event in which the later-retained attorney’s conduct played no part.  In Pappas, because the later-retained lawyers’ conduct could have been a proximate cause of plaintiff’s malpractice-caused injury, the privileged communication was “at issue” – it was relevant to malpractice liability and, also, the amount of damages. Permitting discovery of communications in cases like Pappas does not render privilege “illusory” in all malpractice cases, the concern in Jakobleff, because waiver would, per the Pappas court, only be found where the later-retained lawyer’s conduct could be a proximate cause of plaintiff’s malpractice-caused injury. In all other cases, including cases asserting mitigation-type defenses, as in Jakobleff, privilege remains a shield.

The cases reflect three important policies: (1) that the privilege, meant to be a shield, not be used as a sword to defeat the rights of the attorney accused of malpractice, (2) that the malpractice defendant should not, by artful pleading of defenses, be able to determine whether privilege should be invaded, and (3) that the privilege will be upheld if the otherwise protected communications is reasonably available from other sources. Courts generally permit defendants to discover communications relevant to the causation of all malpractice damages, regardless of whether the attorney’s conduct occurred after an episode of malpractice by another attorney, at least where the conduct may have contributed to the plaintiff’s injury. The sequence of representations remains critical. Courts are reluctant to permit defendants to exploit the implied waiver doctrine where they appear to be attempting to obtain a tactical advantage. Courts are willing to find an implied waiver where any part of plaintiff’s malpractice damages may have been caused by another attorney’s representation, even if that representation post-dated the defendant’s act of malpractice.

Mr. Granofsky is senior trial attorney and head of the Professional Liability Practice at the ALFA New York, NY firm of Lester Schwab Katz & Dwyer.