When you talk with your attorney, that communication is privileged, which means that your attorney cannot tell others what you discussed. Even if you confess some wrongdoing or mention your company’s violation of some law, the privilege protects the communication. With some exceptions not pertinent here, the privilege is near absolute.
The idea behind this secrecy screen has been challenged by scholars, but it remains this: A lawyer cannot give good advice to his client if the client is not fully forthcoming about what he knows and thinks.
There are number of recognized evidentiary privileges besides attorney/client, including priest/penitent, doctor/patient, journalist/source, the marital privilege and the privilege against self-incrimination. The term “privilege” in recent days has taken on broader and sometimes negative meanings. This article concentrates on the established use of the legal right to keep certain information secret.
When you are negotiating a claim, you may take positions or use arguments for the purposes of reaching a settlement that you later rethink and change. The courts recognize the benefits of negotiated settlements and normally do not allow these negotiation postures into evidence at trial. For this reason, your attorney will likely print at the top of the documents sent to the other side: “For Settlement Purposes Only.”
There is also the somewhat ill-defined secrecy concept known as the “work product privilege.” This privilege is very important for every contractor involved in a claim, and you should have at least a working knowledge of what it means and how you can use it.
The work product privilege
When a contractor knows that litigation has begun or is in the offing, they may want to interview witnesses and record those conversations and to preserve facts and recollections with or without an attorney present. They may also go through the project’s documents and create files to represent elements of the claims or defenses. They may take photos to capture the state of construction and the problems encountered. The contractor or its attorney may hire a consultant, not always to act as an expert at trial, but to assist in preparing the claim or defense and to advise the attorney.
These documents and collections, prepared “in anticipation of litigation,” are work product, and they have some protection from forced disclosure in court. During discovery, the facts of a case and normal business records are subject to discovery. Opinions, summaries and investigative materials that analyze, comment on or preserve the facts have some protection.
In my practice, I like to plot things. With the client’s help, plots are made of crew size/day, man-hours/day, man-hours/percent complete, interferences noted on daily reports, etc. Some plots do not clarify why there is a claim and they are discarded. Other times, a theory of the case arises from these plots. In one case, we plotted by date every drawing revision and, using a clear plastic overlay, compared that plot with another plot of man-hours/week. The plots showed a direct correlation.
These plots are not part of the contracting company’s normal business records. They are prepared with the thought that they may be used at trial. My client or I might also interview people with knowledge of the job, including ex-employees from the opposing party. This information can be very helpful in structuring how the case will be presented. All of this documentation is work product.
Courts often struggle to define whether certain documents are work product or protected by the attorney/client privilege. To give the contractor the benefit of the doubt, many commentators suggest that the contractor send its own internal investigations and analyses to its attorney and label the documents as privileged. A cover note or a label on the document can say, for example, “Prepared at the request of/for the benefit of Counsel.”
Losing the work product privilege
Whether the information is attorney/client or work product, the most common way for the privilege to be lost is to allow the documents you have assembled or created to be distributed to others outside of your company. Labeling a document privileged and stating “Not to be copied” may help to prevent disclosure. So will keeping these documents in separate, labeled folders. Be careful. Massive disclosure of documents during litigation can sometimes result in “inadvertent disclosure.”
Courts may require disclosure of work product information if that data cannot be discovered any other way. For example, a written statement from a witness who is now unavailable or deceased or a photo of a building that has since been demolished may still be obtained by the other party.
There is also a question of whether documents should not be considered privileged because—although prepared in anticipation of litigation—they are normally kept by the business. This argument has led to litigation with insurance and bonding companies that do not want to disclose their investigative reports or claims analyses. These reports and analyses, arguably, are a regular part of their business and should be disclosed.