Illinois State Court Applies the “At Issue” Waiver Doctrine

March 28, 2012

An “express waiver” of the attorney-client privilege or the work product doctrine can occur upon disclosure of protected communications or documents. An “implied waiver” can occur if the protection’s owner explicitly relies on protected communications or documents, such as pleading “advice of counsel” as a defense, suing a lawyer for malpractice, etc.

An extreme form of implied waiver can occur if a litigant seeks some advantage by affirmatively taking a position that necessarily involves protected communications or documents – but without specifically referring to them. Many courts call this an “at issue” waiver. In Stewart Title Guaranty Co. v. CVOF 71, LLC, 2012 IL App (1st) 112526-U, ¶29, the plaintiff claimed that a bank had “conceal[ed] material facts relevant to . . . mechanics lien claims,” which caused the plaintiff to “waive its reservation of rights” under an insurance policy. The bank sought to depose the plaintiff’s lawyer, who had investigated coverage issues and provided coverage advice to the plaintiff during the time that the plaintiff claimed ignorance. The court found an “at issue” waiver, concluding that “by alleging in its complaint for declaratory judgment that [the bank] concealed material facts resulting in [plaintiff’s] waiver of its reservation of rights, [plaintiff] placed its communications with [its attorney] and his advice at issue.” Id. ¶31. The court vitiated both the attorney-client privilege and the work product doctrine otherwise covering the lawyer’s communications and documents.

Litigants’ lawyers generally will know the waiver dangers of disclosing protected communications or documents, or referring to them in some pleading or testimony. However, an “at issue” waiver can occur without taking these steps, and therefore represents the most dangerous type of waiver.