Attorney-Client Privilege

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Last week, the Florida Supreme Court adopted section 90.5021, Fla. Stat. – Florida’s fiduciary lawyer-client privilege – to the extent it is procedural and held that the decision is retroactive to the Florida legislature’s enactment of the statute in 2011.

The statute provides for application of the lawyer-client privilege when that client is a fiduciary, such as a trustee, personal representative or executor, or guardian.

In 2011, Florida’s legislature enacted section 90.5021, Fla. Stat., which provides for application of the lawyer-client privilege – even when the client is a fiduciary.

Specifically, the statute protects communications between a lawyer, on the one hand, and a client who is a trustee, personal representative or executor, or guardian, on the other hand. The privilege applies to the same extent as if the client were not acting as a fiduciary.

Why the need for a specialized statute? Isn’t the standard lawyer-client privilege statute good enough to protect communications between a lawyer and a fiduciary?

While attorneys provide legal advice to their clients, they are sometimes the recipients of such advice from their own counsel, including in-house firm counsel. Agreeing with recent decisions by the highest courts of Georgia and Massachusetts, a panel of the First Department Appellate Division this June handed down a decision declaring such advice protected by the attorney-client privilege. See Stock v. Schnader Harrison Segal & Lewis LLP.

I. The Attorney-Client Privilege and Work Product Doctrine in the United States and Abroad

The attorney-client privilege and work product doctrine are important and well-known concepts to nearly every lawyer in the United States. Generally, the attorney-client privilege shields from disclosure confidential communications between attorneys and clients for the purpose of seeking or rendering legal advice, while the work product doctrine guards documents or other tangible things prepared in anticipation of litigation by or for a party.[i] The United States affords litigants and lawyers relatively broad protections under these doctrines through the Federal Rules of Evidence and Civil Procedure or, as appropriate, analogous provisions under state law.  

Last Thursday, the New York Court of Appeals issued a stark reminder to transactional lawyers: no matter how much “common interest” two parties may have with respect to a transaction, the common interest doctrine may not protect their communications.

In Ambac Assurance Corp. v. Countrywide Home Loans, Inc., New York’s highest court held, in a 4-2 decision, that a party waives its attorney-client privilege if it shares privileged information with another party unless (i) those two parties share a common legal interest, (ii) the communication between the parties was made in furtherance of that legal interest, and (iii) the communication relates to pending or anticipated litigation.

In-house counsel often communicate with corporate management under the assumption that these communications are protected by the attorney-client privilege— absent some type of unusual and extraordinary circumstance, such as waiver of the privilege or the crime-fraud exception. A surprising number of both in-house and outside counsel, however, are unfamiliar with the longstanding “fiduciary exception” to the attorney-client privilege. Forty-five years ago, in Garner v. Wolfinbarger, the Fifth Circuit allowed the attorney-client privilege of a corporation to be pierced by the corporation’s shareholders upon a showing of “good cause.” While some courts have rejected this approach, a New York appellate court recently joined other courts, including the Delaware Supreme Court (see Wal-mart Stores, Inc. v. Indiana Electrical Workers Pension Trust Fund) in adopting it.