Attorney-Client Privilege and the Model Contract, Part 1: Common Legal Interest

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As discussed earlier, we believe New York courts may reject the idea that funders and plaintiffs share a common interest, and any other effort to protect privilege by styling the funder as a co-client or co-counsel is impractical. As a result, the plaintiff may waive the attorney-client privilege when disclosing such information to a funder, but it may not. The contract reflects this uncertain landscape in its provisions.

Before a judge will analyze the nature of the common interest to determine if it prevents waiver, she will look for two predicates: Did the parties agree they shared a common legal interest? If so, did they share the information solely in furtherance of it? While the agreement need not be in writing, reducing it to writing is prudent. Thus the contract contains a provision in which the parties agree the common interest exists and that the information is shared to further it:

4.1 Common Interest: Plaintiff and Funder agree they share a discovery privilege-protecting common legal interest and, to the degree necessary to further their common legal interest, agree to share Common Interest Material in accordance with the provisions of sections 2.5.2 and 3.1.3. Plaintiff and Funder agree the material would not be shared if the common legal interest did not exist.

Given the uncertain status of a common interest between plaintiffs and funders in New York, the contract requires the plaintiff to get current legal advice on the issue by having the plaintiff represent that it has received such advice. (Our case law analysis is current through April 3, 2013.)

2.1.2. Common Interest: The Plaintiff has received [Independent/Litigation] Counsel’s advice regarding the common interest doctrine in New York.

The final provision for today is the definition of Common Interest Material:

Common Interest Material: Any discussion, evaluation, negotiation, and any other communication and exchanges of information relating to the Claim in any way, whether written or oral, between or among the Plaintiff, Litigation Counsel, the Funder, and/or the Funder’s Representatives; provided that such communication would be protected by attorney-client privilege, work product doctrine or other discovery protection if not disclosed to a third party lacking a common legal interest.

The first part of the definition is very broad to capture as much information as possible, and then sharply narrowed by the language after provided that. The narrowing language is phrased as it is to enable the definition to survive an adverse common interest holding. That is, even if a judge ultimately decides the parties lack a common interest, information will still be identifiable as being (or not being) “Common Interest Material,” a defined term with potential consequences elsewhere in the contract.

 

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