Commercial Litigation and Arbitration

Joint Defense / Common Interest — When the Common Interest Must Exist — Elements of Advice of Counsel Defense— Waiver of Attorney-Client Privilege vs. Waiver of Work Product Protection

SEC v. Reserve Mgmt. Co., 2012 U.S. Dist. LEXIS 147723 (S.D.N.Y. Sept. 12, 2012):

● “The common interest rule is concerned with the relationship between the transferor and the transferee at the time that the confidential information is disclosed. The fact that the parties’ interests have diverged over the course of the litigation does not necessarily negate the applicability of the common interest rule”

“In order to establish the affirmative defense of advice of counsel, a defendant must show (1) that he made a complete disclosure to counsel; (2) sought advice from counsel as to the legality of his actions; (3) received advice that his conduct was legal; and (4) relied on such advice in good faith”

Counsel must be “disinterested and independent”

● “A party who intends to rely at trial on the advice of counsel must make a full disclosure during discovery; failure to do so constitutes a waiver of the advice-of-counsel defense”

● Fact that party has sued counsel for malpractice doesn’t preclude reliance on advice of counsel defense. [It certainly can’t help.]

● Unlike privilege, work product protection “is not automatically waived by disclosure to third parties”

● Waiver occurs “only if the disclosure substantially increases the opportunity for potential adversaries to obtain the information”

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