Perhaps the most important work product waiver issue facing public companies is whether sharing work product (such as litigation risk analyses) with the company’s outside auditor waives the work product protection. It is not difficult to imagine how eager private plaintiffs are to see such work product.
Traditionally, such disclosure did not cause a waiver, because courts did not consider outside auditors to be the company’s adversary. However, in 2002 a Southern District of New York case found that a recent wave of corporate scandals changed the analysis, so that such disclosure did waive the work product protection. Since then, two other Southern District of New York decisions went the other way. The latest decision (written by District Judge P. Kevin Castel) continues this string of decisions rejecting a finding of waiver. Int’l Design Concepts, Inc. v. Saks Inc., No. 05 Civ. 4754 (PKC), 2006 U.S. Dist. LEXIS 36695 (S.D.N.Y., June 5, 2006).
Companies undoubtedly waive the attorney‑client privilege protection if they share privileged communications with their outside auditors, but they should be heartened by this string of decisions finding that disclosing work product to their outside auditors does not waive that separate protection.