Confidentiality and Privilege: What Does it Mean?
Confidentiality and attorney-client privilege are two of the most misunderstood terms in my business. The two are related, yet very different, and most people don’t know the differences or how they apply. For instance, everything that falls under the attorney-client privilege is confidential; however, everything that is subject to the attorney’s duty of confidentiality is not always privileged. How’s that for confusing?
In fact, even many attorneys do not understand the difference and do a disservice to their clients by not educating themselves. Ignorance about confidentiality and attorney-client privilege often prove disastrous to a client’s cause of action. A wise business owner will take the time to understand the difference between the two and avoid some of the dangers associated with each.
Let’s start by defining the difference between confidentiality and attorney-client privilege. As a general rule, a lawyer must not reveal any information relating to the representation of a client. This is the attorney’s duty of confidentiality to the client, and covers almost anything the client says or gives the attorney during the course of the representation.
Attorney-client privilege arises to prevent an opposing party, court or other governmental tribunal from compelling the revelation of confidential communications between an attorney and a client. This privilege is very specific. It only arises if the client is actually seeking the legal services of the attorney, the client has conveyed confidential information to that attorney and an opposing party, court or other government tribunal is seeking disclosure of that information.
Now that you know the basic difference, I’d like to point out five exceptions and danger areas related to the duty of confidentiality and attorney-client privilege that may affect the business owner.
1) Client is the Holder of the Privilege. The attorney-client privilege exists for the benefit of the client; therefore, the client may waive the privilege at any time. The client waives the privilege simply by failing to assert the privilege when there is an opportunity to do so. The client can also waive the privilege by intentionally revealing privileged information to a third party. If this happens, the information is no longer privileged, and the client can be forced to produce the information at trial.
2) Presence of a Third Party. The presence of a third party when a client conveys information to an attorney will not necessarily destroy the attorney’s duty of confidentiality to the client. An attorney is not allowed to breach the duty of confidentiality just because others may know some information. The attorney can only discuss confidential information with others if that information becomes generally known.
Beware—this rule is different when the client intends to claim the attorney-client privilege. The presence of a third party can destroy the attorney-client privilege. If a third party is present when the client conveys information to the attorney, and the third party was not present to help further the attorney-client relationship, then the client cannot later claim that the information was a privileged communication between him or her and the attorney.
3) Corporate Counsel. When the client is a corporation or other business entity, communications between the attorney and high-ranking corporate officials are generally both confidential and privileged. Communications between the attorney and employees of the company are confidential; however, those same communications may not be privileged. Remember, the attorney’s client is the entity, not the individuals who work for the entity, and privilege only applies to a specific type of communication between attorney and client.
4) Client Intent to Commit a Crime. If the client conveys an intention to commit a crime to the attorney, and that intention is not abandoned after the attorney discourages the idea, then the attorney is required to reveal the client’s intention. The client may not claim that the communication of the intention to commit a crime is subject to the duty of confidentiality or the attorney-client privilege. This same rule applies to any situation where the attorney knows that the client intends to perpetrate a fraud upon the court or commit perjury.
5) Attorney’s Protection. An attorney may reveal confidential information, and the client cannot claim attorney-client privilege, to the extent necessary to protect the attorney’s interests in a dispute with the client regarding the attorney’s conduct or representation. This usually arises when a client refuses to pay the attorney for work performed and the attorney is forced to sue the client for the fee. It also arises when a client makes an ethics complaint against the attorney or sues the attorney for malpractice. In either case, the attorney can use information that would otherwise be confidential to defend himself or herself or to establish his or her claim.
There are many more rules and exceptions to this topic, but the information above should give you a good start at recognizing the difference between the attorney’s duty of confidentiality and the client’s right to assert the attorney-client privilege. Both topics can be both complicated and confusing, but the prudent business owner should know the difference between the two and some of the pitfalls associated with each.