In my column from earlier this month, I discussed lawyers’ obligations to ensure confidential information is not disclosed when e-discovery procedures are taking place.
Now let’s turn to the question both of how the attorney-client privilege might be inadvertently violated when information is shared electronically and how this unfortunate outcome can be prevented.
The attorney-client privilege can be waived when a holder of privileged documents “voluntarily discloses or consents to disclosure.”[i] The issue of waiver takes on special importance in cases involving electronically stored information.
Given the amount of information that can be processed and produced in cases, it is almost inevitable that privileged material will be inadvertently turned over to opposing counsel in discovery. When this happened in the past, litigants had often argued that the disclosures gave rise to a waiver of the attorney-client privilege with respect to the disclosed document and all related privileged materials. In other words, the information was admissible for the purpose of litigation.[ii]
Over time, though, both the courts and various rule makers have acknowledged that a waiver finding is not appropriate in this context, especially when a disclosing party took reasonable steps to safeguard the disclosed information.[iii] This principle has a special application in cases that require an extensive review of large volumes of electronically stored information. These are the very sorts of cases in which the risk of inadvertent disclosure is often highest.
Both the state and federal Rules of Evidence acknowledge that a waiver of privilege follows when a document is intentionally disclosed.[iv] In this analysis, the rules concern the parties’ intent to waive the privilege rather than an intent to produce a particular document.
Yet, if a party intentionally waives the privilege attached to a document, the rules generally do not allow for a broader “subject matter” waiver of all other information on the same subject. The one exception here arises in cases in which the non-disclosed, privileged documents “ought in fairness to be considered” with the disclosed document.
For example, if a corporate party wants to disclose the results of an internal investigation, the production of that report will constitute a waiver of the entire document, but not necessarily previous drafts or other documents associated with the report. This is a change from past law, which often required the production of documents associated with the originally produced, privileged material. Today, this information does not come in unless it “ought in fairness” to be subject to a waiver.
That said, waivers are obviously not always intentional. This is especially true in cases involving voluminous amounts of electronic data. When a privileged document is produced inadvertently, the question is often whether a waiver is now appropriate since “reasonable steps to prevent” the disclosure were not taken.
Both Wisconsin and federal laws allow a party who inadvertently discloses privileged material to apply the privilege and “claw back” the document, provided the party acted reasonably in preventing disclosure and in rectifying the misstep after the disclosure was discovered.
The purpose of this “claw back” protection is to reduce the costs associated with electronic discovery by infusing some flexibility into a waiver analysis when a disclosure is inadvertent. In deciding whether a waiver exists, courts consider the reasonableness of the precautions taken, the time taken to rectify an error, the number of documents reviewed in the period of time allowed for the production, the extent of the disclosure and the “overriding issue of fairness.” [v]
Courts have applied common approaches in assessing the reasonableness surrounding the inadvertent disclosure of privileged documents. The analysis is often driven by facts, but most courts have also weighed heavily on the “fairness” factor set forth in the Advisory Notes to Rule 502 of the Rules of Evidence.[vi]
Courts also tend to concentrate on whether the producing party promptly sought the return of an inadvertently disclosed document, as well as the amount of discovery produced. If a party takes reasonable steps to prevent disclosure and seeks to promptly rectify an error, it is in a much stronger position to argue that a waiver had not occurred as a result of disclosure.[vii]
Courts today rarely find a subject-matter waiver is appropriate in cases involving inadvertent disclosures of privileged information.[viii]
Given the amount of electronically stored information that is often reviewed before production, counsel must still pay attention to possible, inadvertent waivers of privileged or confidential material. To avoid a waiver determination, counsel should draft agreements that regulate the effect of an intentional waiver or an inadvertent disclosure and seek a court order incorporating their terms. These provisions can be included in a protective order or a separate order that tracks the language of Rule 502(d) of the Federal Rules of Evidence.
In these documents, the parties can agree that no production will ever create a subject-matter waiver or also agree that an inadvertently produced, privileged document, may be “clawed back” under any circumstances. These protections can drastically reduce the costs associated with the disclosure and production of electronically stored information while protecting clients against the repercussions of a waiver. The Order should provide as follows:
- The production of privileged or work-product protected documents, electronically stored information or confidential information, whether inadvertent or otherwise, is not a waiver of the privilege or protection from discovery in this case or in any other federal or state proceedings. This Order should be interpreted to provide the maximum protection allowed by Federal Rule of Evidence 502(d). (Or Wisconsin counterpart).
- Nothing contained in this order is intended or shall serve to limit a parties’ right to conduct a review of documents, electronically stored information or information (including metadata) for relevance, responsiveness, and/or segregation of privileged and/or protected information before production.
Although this approach may not work in every case, it does provide a foolproof, no questions asked, claw-back arrangement that should protect against a waiver. If a document should not have been produced because of a privilege or work-product protection, it comes back, plain and simple.
The Protective Order, which should be signed by the client after full disclosure, further ensures that non-privileged confidential information is also returned without the consequence of waiver, both in the present case and in any other state or federal proceeding. This protects a client against the risk of waiver in any related proceeding and provides maximum protection to the documents.
Electronic discovery poses special challenges for the protection of privileged and confidential client information, including work products.
As with most issues involving electronic discovery, the starting point is cooperation between counsel. Through this process, the parties should devise a suitable protective order that guards against inadvertent privilege waivers and separately protects non-privileged, confidential information.
Here an ounce of protection provides a ton of cure at a later date. Above all, it lets the parties in a particular case and the overseeing court attend to the merits of a dispute and ignore the distracting side shows that inevitably arise from poor planning.