United States: Tips to Avoid Waiving Attorney-Client Privilege in the Electronic World
Putting the Genie Back in the Bottle

"Artificial Intelligence is no match for human error."
… Anonymous

E-MAIL POSES NEW RISKS

With the ease and speed of computers, a click of a button can raise serious problems regarding waiver of the attorney-client privilege. The increased speed of communication - whether by fax, voice mail, or email - increases the opportunity for mistakes. For counsel, this poses an increasing danger of disclosing confidential communications of the client.

It remains critical to be vigilant to protect client communications, particularly in the world of proliferating electronic communication. Information inadvertently disclosed to opposing counsel or third parties might adversely affect the client's case. Disclosure of confidences can also lead to a malpractice claim.

In U.S. v. Keystone Sanitation Co., 995 F.Supp. 672 (M.D. Pa. 1994), the defendants inadvertently disclosed email messages with confidential communications. The Pennsylvania court determined this was a waiver of the privilege. However, in Transamerican Computer Co. v. IBM, a Ninth Circuit case, the court determined that some privilege review had been conducted, that there was a large amount of data produced, and that the disclosure was inadvertent and therefore not a waiver of the attorney-client privilege. (Transamerican Computer Co. v. IBM (1978) 573 F.2d 646.)

Attorneys communicate with their clients via email every day. Typically messages are tagged with a notice such as "this is intended as a confidential attorney-client communication … return to sender if inadvertently received".

Courts have ruled there is a reasonable expectation of privacy in email (United States v. Maxwell, 42 M.J. 568 (A.F.Ct.Crim.App. 1995), unlike cellular phones where interception of transmissions is a frequent occurrence. It is illegal to hack into email. But it remains remarkably easy to intercept e-mail with hacker software available on the Internet.

Law firms should be alert to the risk of sending documents over the public Internet and take steps to diminish the chance of error.

• Take Care with "Reply"

Sending a "reply" may broadcast the message to a larger audience than the identified sender. Some e-mail software programs will deliver your reply to all who received the original message from the sender. For example, if your client sends a message to you and others who may be witnesses, your "reply" to the client may be distributed to all. If the reply is not marked as a confidential communication intended only for the client, the attorney-client privilege may be waived.

• Watch out for strings of messages

If you are participating in an email string with all other counsel involved in the case, the danger of an errant message getting to the wrong party increases. Similarly if you have a fax machine programmed to send to all counsel in your case, a slip by your assistant can send the message intended for your client only to all opposing counsel. This may result in a waiver of the work product privilege.

• Use software to limit forwarding

E-mail messages can be changed when they are forwarded unless you have implemented technological steps to prevent this. This could result in a waiver of the attorney-client privilege if your client forwards the communication to outside third parties and adds comments which may be admissions. With appropriate authentication, the email itself may be admissible. Computer printouts are admissible as business records under the Federal Rules of Evidence 803(6), if the proper foundation is laid. U.S. v. Catabran 836 F.2d 453 (9^th Cir. 1988).

• Notice to Clients

If the Internet will be used for email and document exchange with clients, it would be prudent to inform the client about the risks of inadvertent disclosure. The client and counsel can then selectively use a more secure forum for sensitive documents and conversations.

• Encryption

The current standard of care does not require encryption of email in attorney-client communications. Once encryption protection becomes easily available it is likely that lawyers and clients will use it to armor their messages. It may also become a standard to demonstrate the intention that a communication be confidential.

• Mutual protection

Consider negotiating an agreement with opposing counsel that inadvertently produced documents, which are privileged, will be returned unread. Such an agreement will assist if necessary to get a Court order for return of documents withheld in violation of the agreement.

California has recognized that the privilege belongs to the client, not the attorney. (Evid. Code §953.) Underlying this rule is the notion that the client holds the privilege and only the client or the client's attorney with permission can waive the privilege.

As such, an attorney's inadvertent disclosure of a client's confidential communications during discovery is generally not a waiver of the privilege in California. Such inadvertent disclosure often occurs when a stack of documents is delivered without realizing that an attorney-client communication is contained within one of the files. (State Comp. Ins. Fund v. WPS, Inc. (1999) 70 CA4th 644, 652-654).

In Corey v. NH&D, counsel left documents in his office for plaintiff's counsel to review. In one of the boxes was a memo with a summary of a telephone conversation between counsel and the client. The memo had the words "CONFIDENTIAL AND LEGALLY PRIVILEGED" across the top. When plaintiff's counsel refused to return the document, the appellate court was called upon to review the nature of the disclosure and whether it resulted in a waiver of the privilege.

The Court concluded:

A California court declined to uphold sanctions against a law firm for failing to timely disclose that it received a privileged memorandum. Aerojet-General Corp. v. Transp. Indem. Ins., Cal. Ct. App., 22 Cal. Rptr. 2d 862 (1993).

The general rule that inadvertent disclosure of a confidential communication is not a waiver of the privilege is subject to exceptions. In other jurisdictions, the ethical rules may permit counsel to retain and use the communication if opposing counsel was innocent in the misdirection or disclosure. For example in Ciba-Geigy Corp. v. Sandoz, Ltd., 916 F.Supp.404 (D.N.J. 1995) the defendants produced all the documents from a database without conducting a privilege review. The court concluded this was "gross negligence" and a waiver of the attorney-client privilege.

A California court considered the reasonableness of the sender's precautions in determining whether a disclosure was truly inadvertent, or subject to adequate protections under the circumstances. Alldread v. Granada, D. Cal., 988 F.2d 1425 (1993).

California recognizes the ABA ethical standard that requires an attorney who receives privileged documents from the opposing party which appear disclosed by inadvertence to return the documents. This comports with ABA Formal Opinion 94-382 (1994) on the ethical duties of lawyers. Once it is apparent documents are subject to privilege counsel is required to refrain from examining the documents, notify opposing counsel of possession and promptly return them or refrain from using them without leave of court.

According to ABA Formal Ethics Op. 92-368 (1992) a lawyer who receives materials appearing to be subject to the attorney-client privilege or otherwise confidential, under circumstances where it is clear that they were not intended for the receiving lawyer, should refrain from examining the materials, notify the sending lawyer, and follow the lawyer's instructions on return or disposition of the documents.

If this is not done, counsel may be sanctioned or disqualified from representing the client in the matter. In Richards v. Jain (2001), 168 F, Supp. 2d 1195 the Court in Washington state disqualified a law firm for reviewing the adversary's privileged emails that were lawfully in the possession of the firm's client.

Electronic communication is a powerful tool to improve the efficiency and effectiveness of a law practice. The very ease of use increases the likelihood of inadvertently disclosing confidential and privileged information. Attorneys can and should take some common sense measures to reduce that risk to protect themselves and their clients.

###