The attorney-client privilege

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  • | 12:00 p.m. April 21, 2003
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Following the recent disgraceful bankruptcy of Enron and of other large American companies, debate about the attorney-client privilege became the central focus of formal comments published in response to proposed new standards of conduct for all lawyers practicing before the Securities and Exchange Commission. Responding to the Congressional mandate embodied in Section 301 of the Sarbanes-Oxley Act, the SEC proposed rules that provoked widespread dissent from corporate lawyers all over the world. One of the SEC’s proposed rules called for an “up the ladder” reporting scheme where an attorney who knew or reasonably should have known that a material violation of securities laws had occurred, was occurring, or was about to occur was required to bring this information to the attention of the chief legal counsel or chief executive officer and, ultimately, effect a “noisy withdrawal” from further representation if no corporate action were taken in response to the attorney’s report.

At issue for most lawyers that opposed the proposed standards was the attorney-client privilege, one of the cornerstones of western jurisprudence and an integral part of a system of justice that imposes a fiduciary duty of abiding trust and confidence upon all lawyers who represent clients. Fred Krebs, president of the American Corporate Council Association, stated in an interview with the ABA that “there is a very real fear that [these] rules will change the relationship with the client.” M. Peter Moser, chair of an ABA task force that studied the SEC’s proposed rule changes, noted that, by definition, a so-called “noisy withdrawal” would hinder a lawyer’s ability to advise clients against bad decisions. The fundamental privilege that attaches to most lawyer-client communications helps to encourage clients to share information fully and openly with the lawyer. If clients suspect or fear that their secrets are unsafe they may be very reluctant to even seek legal advice. Such are the time-honored rationales for the privilege. Not surprisingly, in response to overwhelming criticism against the proposed rules, the SEC abandoned the “noisy withdrawal” provision when it published its rule making in January 2003.

What effect does use of the attorney-client privilege have upon the development of deposition testimony? Obviously, if used improperly or spuriously, the privilege itself can become just another weapon in a lawyer’s arsenal of discovery abuse tactics. When a lawyer asserts the attorney-client privilege and orders his client not to answer a particular question or set of questions the deposing attorney is powerless to get the witness to respond. Questions posed to witnesses who have been ordered to remain silent can be certified to the court for a ruling on the applicability of the privilege but this remedy, in addition to being fraught with weeks or months of delay, does nothing to reestablish the rhythm and flow of a deposition shut down by the objection.

Section 90.502 of the Florida Evidence Code sets forth requirements that must be established in order to properly assert the attorney-client privilege: “a client has a privilege to refuse to disclose, and to prevent any other person from disclosing, the contents of confidential communications when such other person learned of the communications because they were made in the rendition of legal services to the client.” The privilege will not lie unless all elements of the above rule are satisfied, i.e., 1) a communication, 2) between privileged persons, 3) in confidentiality, 4) for the purpose of legal assistance. Once asserted, the burden is upon the proponent of the privilege to establish the existence of facts that would form a proper foundation.

Among the practical guidelines for professional conduct of trial lawyers published and disseminated by the Trial Lawyers Section of The Florida Bar, are many that are aimed at preventing discovery abuse and promoting relations among lawyers which are respectful and civil. Guideline Ten in the section on depositions states clearly that “counsel should not direct a deponent to refuse to answer questions unless they seek privileged information.” Ordering a witness not to speak is an objection whose impact during the deposition is far greater than simply disturbing the development of testimony. The assertion of the attorney-client privilege is, by design, calculated to prevent the disclosure of certain information. In other words, when an attorney orders a witness not to answer a question, the effect is to obstruct certain questions and to shut down the deposition until non-privileged information is elicited.

Recently, I was taking a deposition and wanted to explore the corporate relationship between the deponent’s British company and an American company that is located in Connecticut. In response to requests for admission that were answered prior to the deposition, the deponent’s company denied that there was any parent/subsidiary or any other corporate relationship between it and the American company. When asked if the deponent had ever discussed the pending litigation with anyone from the legal department of the American company, the deponent answered “yes.” All follow-up questions in this area of inquiry were disallowed when deponent’s attorney asserted the attorney-client privilege. Although the questions posed are still pending certification, it is hard to imagine that communication between corporate counsel and an employee of a completely different company would fall within the purview of the privilege.

The attorney-client privilege is a powerful device that, when used improperly, can obstruct and impede the discovery process. An attorney who orders a witness not to answer a question during a deposition claiming attorney-client privilege has the burden of showing or demonstrating that all of the foundational prerequisites for invoking the privilege are satisfied. If a proper foundational showing cannot be made, the wrongful assertion of the privilege subjects the opposing party to abuse of discovery procedures for which court-ordered sanctions may be appropriate. In addition to attorney fees and costs related to re-deposing the witness, courts may also undertake findings of fact with respect to the motives and good or bad faith of the attorney who has asserted the privilege, and impose a monetary penalty against both the attorney and the party.

— Van Kirk McCombs is a

partner with Burge, Wettermark,

Holland & Barber.