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The attorney-client privilege is a fundamental of our civil justice system. It allows executive and middle management to ask difficult questions and reveal accurate but sensitive information when they seek legal advice--without fear of disclosure beyond company walls.

Until recent times, the privilege was impregnable. However, several factors have caused a steady erosion of this privilege.

Second, because the privilege shields relevant and sometimes critical information, judges have disfavored it, creating numerous "exceptions" to the privilege.

Third, the advent of e-mail and electronically stored information has resulted in massive data dump document disclosures including inadvertently-disclosed privileged communications. In many instances, inadvertent production of privileged documents has triggered court orders that all privileged documents must be produced.

In fact, I know of a civil case where one side inadvertently disclosed a document protected by the attorney-client privilege. The opposing lawyer took a picture of the document with his cell phone camera during the document inspection but did not designate the document for copying and production. When this came to light, the disclosing party demanded the photo be returned. Not only did opposing counsel refuse, but argued to the court that the inadvertent disclosure of one privileged document served as a blanket waiver of the privilege for all privileged documents!

Congress' recent passage of a new federal rule of evidence (FRE 502) is addressing such "inadvertent" waivers of attorney-client privilege. The rule solves the problem of courts making inconsistent rulings on the effect of an inadvertent disclosure. The possibilities ranged from no waiver, to a complete waiver for all privileged communications (or at least a waiver as to all privileged communications of a similar subject matter).

To avoid the horrendous consequences of unintended disclosures of privileged material, armies of lawyers and paralegals review massive amounts of paper and e-data to weed out the handful of communications that might be privileged, leading to enormous expense.

FRE 502 changes the landscape. In order for a disclosure operating as a privilege waiver to trigger a requirement that other privileged communications be disclosed, the initial disclosure must be intentional. What's more, the as-yet undisclosed communications that must be disclosed should relate subject matter-wise to the initial disclosure. And "in fairness," the disclosed and undisclosed communications ought to be considered together.

As to "inadvertent" disclosures of privileged communications, under the new rule such a disclosure is not even a waiver if the disclosure is unintentional, and the disclosing party took reasonable steps to prevent disclosure and correct the error leading to the disclosure.

FRE 502 is the solution we needed. It now permits parties to put the horse back in the barn so long as they acted reasonably when the horse escaped.

PHILIP G. KIRCHER is co-chairman of the commercial litigation department at the law firm of Cozen O'Connor.

November 1, 2008

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