NY COURT EXPANDS ATTORNEY CLIENT PRIVILEGE

Confidential attorney-client communications are privileged-that is, protected from disclosure. In general, when communications are made in the presence of a third party, or disclosed to a third party, the privilege is lost.

What happens when two friendly parties speak to an attorney? Under limited circumstances, if the parties share a common interest, their communications may be held confidential and protected. Up to recently, many jurisdictions, including New York, have held that the common-interest doctrine applies only with respect to legal advice in pending or reasonably anticipated litigation.

In Ambac Assurance v. Countrywide, Ambac sought documents from the merger of Countrywide and Bank of America. The trial court held that the documents shared between Countrywide, Bank of America, and their counsel during the merger was not protected by the common-interest doctrine because no litigation was ongoing or anticipated.

New York's Appellate Division (First Department) reversed:

We hold that, in today's business environment, pending or reasonably anticipated litigation is not a necessary element of the common-interest privilege.

Read the decision at:

http://www.nycourts.gov/reporter/3dseries/2014/2014_08510.htm

12611 N Ambac Assurance Corporation v. Countrywide Home Loans, Inc., Bank of America Corp. (Supreme Court, Appellate Division, First Judicial Department) (Index 651612/10)