Owners of the attorney-client privilege can (1) expressly waive their privilege by disclosing protected communications to third parties, or (2) impliedly waive their privilege by pointing to some privileged communications in an effort to gain an advantage (such as asserting an “advice of counsel” defense). In many courts, they can also waive the privilege by taking some position in litigation that places their privileged communications “at issue.”
“At issue” waivers represent the most frightening type of waiver, because litigants and their lawyers might not recognize that taking a certain position will trigger the waiver. Some courts take an extreme view of the doctrine. In Hege v. Aegon USA, LLC, C/A Nos. 8:10-cv-1578-, 7:10-cv-1630- & -1631-, & 1:10-cv-1635-GRA, 2011 U.S. Dist. LEXIS 50113, at *15 (D.S.C. May 10, 2011), the court found that an insurance company had triggered an “at issue” waiver by asserting affirmative defenses “that it acted in good faith,” that its change in a payment methodology was “reasonable,” and that “it engaged in no unlawful conduct and that it did not breach any common law or contractual duty owed to Plaintiffs.” The court held that these affirmative defenses had “put at issue the evidence [the insurance company’s] decisionmakers had before them and the basis for their subjective evaluation.” Id. at *15-16.
Many courts would not go this far. But litigants considering defenses that claim an innocent state of mind or reasonable conduct should always consider the possibility that a court might conclude that those defenses require an examination of otherwise privileged material contributing to the client’s mental state.