Page 8 - CCCA 259155 Magazine_Winter 2016

{ PRACTICE MANAGEMENT }

LIMITED WAIVER OF PRIVILEGE

AS A BACKSTOP TO COMMON

INTEREST PRIVILEGE

By Alexander Gay

In-house counsel are often asked to share privileged materials has been shared, and it turns out there is
with third parties that have a common interest in a piece of no common interest, the parties are left
vulnerable in litigation. A common inter-
litigation. Common interest privilege is a category of privilege est privilege may not be claimed by a third
that permits parties to disclose privileged evidence between party in these circumstances.
Companies can be assured that one of
themselves without losing privilege. the frst things capable litigation counsel do
is question the basis of the alleged shared
common interest. As such, when delivering
he determination of common in- However, what often gets left out is that privileged documents to a third party, best
terest is a factual one, which may in the event the privilege claim is chal- practices require that a company deliver
Tconsider whether the parties share a lenged, the facts surrounding the creation documents on a confdential basis, with a
common goal, seek a common outcome of the document may have to be exam- cover letter confrming the confdence. The
or have a self-same interest on either or ined—in which case the third party may law of confdence, which has its foundation
both the general claims (e.g., both sued not be in a position to speak to the creation in the law of equity, can act as a backstop
for exactly the same alleged misconduct) of the document and may have diffculty in the event the common interest privilege
or certain specifc allegations (e.g., an asserting the privilege claim. claim cannot be asserted by the third party.
expert report on one specifc matter in In addition, the channels used to deliv- Where a privileged document is delivered
issue). Common interest privilege is as- er the privileged documents to the third in confdence, the privilege continues to
serted and the documents are shared— party, such as an email or letter, are not exist and there is some measure of protec-
often with little to no understanding privileged unless they describe the ap- tion afforded to the documents.
about the nature of the privilege claim pended document. Only the documents The concept of “limited waiver of
being asserted or how to best share docu- that are appended and that have an un- privilege” is seen within the accounting
ments with the third party in a way that derlying privilege claim beneft from the profession when an accounting frm is
protects its subsequent dissemination. common interest privilege. Too often, this given access to privileged documents for
A common interest privilege is not a point is overlooked by litigation counsel the purposes of completing an accounting
stand-alone privilege that can be claimed when preparing their schedule B to their exercise. In completing the accounting ex-
on all documents shared with third parties affdavit of documents. For litigators, it ercise, the accountant often gains access
in the face of actual or impeding litigation. leaves the door open to a line of question- to legal advice that is subject to solicitor-
In order to claim the beneft of a common ing that often exposes information on the client privilege. One of the foundational
interest privilege, the documents must timing of when the parties made the deci- cases that deals with the doctrine of lim-
beneft from either solicitor-client privilege sion to share information. ited waiver is British Coal Corporation
or litigation privilege. Where the privileged Privileged information is also often v. Dennis Rye [1988] 1 WLR 1113 (CA),
document is shared, both the originat- exchanged with a third party on the as- where it was held that a party can provide
ing party and the third party receiving the sumption that there is a common interest privileged documents to a party for lim-
document can claim a common interest between the company and the third party. ited purposes, without waiving the privi-
privilege, independent of one another. However, where privileged information lege as against the world at large.

8 CCCA MAGAZINE | WINTER 2016 HIVER